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                        March 26, 2010
Big "I" Government Affairs "Special" Health Care Update

Big "I" Client Health Care Powerpoint

Due to ongoing developments regarding Health Care Reform legislation the upcoming regular Monday "weekly update" will be replaced this week by this "special" Thursday update.

This afternoon, the Senate passed the Health Care Reform Reconciliation Bill by a vote of 56-43 and sent it back to the House after Republicans identified two minor violations of reconciliation rules that forced changes to a provision on student loans.  In addition to all Republicans present, three Democrats voted against the bill: Sens. Blanche Lincoln and Mark Pryor, both of Arkansas, and Sen. Ben Nelson of Nebraska.  Sen. Johnny Isakson (R-GA) missed the vote due to illness.  All three Democrats opposing the reconciliation bill supported the legislation that was signed into law on Tuesday but objected to particular provisions in this reconciliation bill.  The bill now heads to the House, where the final vote on the package could come this evening or early tomorrow morning.  As previously reported, the reconciliation package passed the House late Sunday night by a vote of 220-211 and it should easily clear the House again this time.  We expect the President to sign the reconciliation package into law within the next few days.

The reconciliation bill makes a number of changes to the House and Senate passed Health Care Reform legislation that are meant to bring the final package in line with a compromise worked out between the President and House/Senate Democratic leaders. Federal subsidies would be expanded slightly for people who need assistance buying insurance, and the coverage gap known as the doughnut hole in the Medicare prescription drug program would be closed by 2020. Seniors who fall into the doughnut hole this year would be eligible for a $250 rebate. The measure would also change the annual penalty on individuals who do not purchase insurance to at least $695 a year or as much as 2.5 percent of annual income.
The reconciliation package would also increase the penalty facing employers who do not offer affordable coverage, to as much as $2,000 per worker. The most significant change, however, would be the method of financing the overhaul. The "Cadillac" tax on high-cost insurance policies would be delayed until 2018 and its thresholds would be raised.  Additionally, individuals and some small businesses making more than $200,000 ($250,000 family) a year would for the first time have to pay a 3.8 percent Medicare payroll tax on capital gains, dividends and other investment income. Finally, these same taxpayers would also see a 0.9 percentage point increase in Medicare payroll tax for regular wages.  All of the above changes have already been included in the Big "I" Summary sent late Sunday.
The provisions that were struck from the reconciliation bill due to the "points of order" were from the part of the bill dealing with Pell Grants for college students and would have no affect on the overall health-care bill. Hence, at this time the policy of health care reform is complete-there will be no more changes-and our Big I Summary previously sent is still accurate.  Big "I" staff have also prepared two other documents you may find useful and that are attached.  The first is a Timeline and Perspective for Big "I" Members that provides a timeline of implementation and some information on potential challenges and opportunities for the future.  The second is a Timeline and Perspective  for Big "I" Clients that also provides a timeline and details some changes that small businesses and individuals may experience in the health care marketplace.

*Read "Insurance News & Views" every Thursday for more information.
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