Who will get subsidies?
First, if you are unemployed, self-employed, or work where health insurance is not offered, you would purchase insurance through a healthcare exchange. (see below). It is expected that 19 million out of 25 million who would shop in these exchanges would qualify for financial aid. Four times the poverty level ($44,000 for an individual, ~$88,000 for a family of four) would receive assistance on a sliding scale. Through a complex formula, people at these income levels should receive enough assistance that they would pay about 10% of their income out in health insurance. Lower income families would pay less (i.e $14,000 individual or $29,000 family of four would pay only 3% of their income). The Medicaid program will be expanded to cover anyone making less than 133% of the poverty level. The subsidy is paid directly to the insurer.
If you work for a business that offers insurance, you can still get a subsidy if you make less money than the poverty cutoff level. The government makes it so you don’t have to pay more than 9.8% of your income for insurance. If you meet these criteria, you would be directed into a healthcare exchange, but would be given a voucher by your employer equal to the amount they contribute to your policy. You would then purchase through the exchange.

What is a healthcare exchange?
Healthcare exchanges (not yet in existence, but part of the bill) are places where individuals and small businesses can shop for insurance that will be more affordable. Because it allows the individuals and businesses to band together, they would theoretically get prices comparable to those offered to larger businesses and corporations. The designs are to be left up to the states. They could be actual stores, online centers, or call centers. Details are to be worked out later. The federal government will give states start-up money to open these and if a state chooses not to open one, the feds will step in and set it up.
Initially these will be for businesses with less than 100 employees, unemployed, self-employed, retired but not eligible for Medicare.
Benefits would be reviewed by the exchanges to be sure they meet government standards. There are to offer 4 different levels of plans named (no kidding ) platinum, gold, silver, and bronze.

My opinion- Oh my. What guarantee is there that any company will offer plans in these exchanges. With the limits discussed in a previous post (85% of premiums must be spent on healthcare), where is the ability for a company to make money. To me, economics dictates that if you limit income, you have to limit losses, guaranteeing the company stays in business. With an open market economy, why invest in something that has a cap on the return and no guarantee against losses. Sounds risky to me. 
Are any states in a position to take on the overwhelming task of setting up exchanges. With the recent budget crises and cuts we have seen in public services and schools, where should the focus of the state be?  Just my opinion.


Next – What reform means for businesses.

While trying to sort through the new healthcare plan, I thought I would try to summarize what I am reading. I have looked hard for resources that do not contain rhetoric and opinions about the issues, but have had a difficult time sorting through the numerous articles including summaries and quotes from the bill itself. I have found some sites that help me understand it and will try to learn a little more about it each day. Realize that any posts here, though attempting to be non-biased, come from a physician who owns a small business ( a medical practice with ~ 50 employees) and will be filtered through my experiences. I will separate out my opinions to the bottom of the post…that way, if you just want the facts without the rant, you can quit reading at the break in the page.
The first question is what happens now? The earliest changes will not be that noticeable. There will be a $250 rebate for Medicare patients who have hit a gap in their coverage. Insurance companies will not be able to exclude children from coverage due to pre-existing conditions. Also, there will be some tax credits for small businesses to help them obtain insurance for their employees. There will be a ban on insurance company limits for lifetime benefits and the companies ability to cancel policies. Before the end of the year, the government will put together a high-risk pool to help people with pre-existing conditions find coverage.  Also, a 10% tax on tanning beds starts now.
Most of the components of the bill do not start until 2014, giving the government (mostly the Department of Health and Human Services) time to work on the details of implementation.

My opinion- In the past, we have had mandates from CMS (Center for Medicare and Medicaid Services) that had a specific timeline. There were associated penalties for not meeting their requirements. On more than one occasion, these involved significant computer hardware and/or software upgrades, costing quite a bit. When the deadline came, CMS had not upgraded, and extended the time until they could change their software. This puts businesses in a tough position. If you follow their guidelines, they can change their dates at the last minute. If you don’t, they can proceed and you are left behind. Either way, there is a significant amount of time you are not able to send claims and receive payment. Larger institutions may have more flexibility to tolerate payment gaps, but small businesses do not. Our employees still want to be paid. My concern is that DHHS is in no way prepared for the increased responsibility of managing the proposal. They have trouble managing what they have now.

More posts as I continue my research. Next- who is to purchase insurance, where will they get it, and how will it be paid for?