Health reform: The big picture

Health reform is now a reality. Over the coming months and years, America's health system will change in many ways.

Here are the most critical facts about how those changes will affect you and your family.

• Everyone, including sick people, will be able get health insurance
  Starting in 2014, Insurers will have to take you regardless of your health history, and premiums will be allowed to vary only slightly, on the basis of age and tobacco use, not health status. In the interim, people who can't get insurance because of pre-existing conditions will be able to buy into a temporary high-risk pool (but only if they've gone uninsured for at least six months).
• All health insurance will be good insurance
  Insurers won't be allowed to put an annual or lifetime cap on the amount they'll pay out for your medical care. And the plans they sell will have to cover the full range of medical treatments. They won't be allowed to leave out something crucial, like prescription drugs or outpatient doctor visits. Members of Congress and their staffs would have to choose from among the same options available to other Americans buying coverage on their own.
• You'll know what kind of health plan you're buying.
  Starting in 2014, you'll shop for coverage on a centralized exchange that enables you to compare health plans side-by-side in terms of price, features, and various quality and customer satisfaction measures. In the interim, you'll have access to far more information on insurance companies than previously.
• If you get insurance through a job, you can keep it.
  If you work for (or own) a small business, depending on the number of employees and their average wage, you may be eligible for tax credits to make insurance more affordable, starting right away.
• If you're on Medicare, your benefits will improve.
  Your plan will now cover 100 percent of preventive care such as checkups, colonoscopies, and mammograms. And the notorious "doughnut hole" in the Part D drug benefit will start to shrink. In 2010, if you enter the hole, you'll get a $250 rebate. Starting in 2011, you'll also get a 50 percent discount on brand-name drugs, and by 2020 the doughnut hole will completely disappear. Changes in physician payment will, over time, increase the number of primary-care doctors, who are in short supply in some parts of the country right now.
• Everyone will have to have health insurance...
  Starting in 2014, you'll have to obtain it either through your job, from a public plan like Medicare or Medicaid, or on your own. If you don't have it, you'll pay a small fine.
  ...but you'll get help paying for it if your income qualifies you
  If your income is near the poverty line, you'll automatically qualify for Medicaid, even if you don't have dependent children. If your income is somewhat higher but still less than 400 percent of the federal poverty line (or roughly $73,000 a year for a family of three), you'll get a tax credit to offset the cost of coverage. This tax credit that will come to you as a rebate even if you don't owe income taxes. The lower your income, the bigger the credit.
• Some people still might not be able to afford coverage.
  Even with subsidies, premiums may be too high for some people. If you truly can't afford it, you will be allowed to opt out of coverage (and avoid the penalty for non-insurance).
• You won't be taxed to pay for health reform unless you're really affluent.
  The new health-reform law, along with the final modifications that passed the House and are under consideration in the Senate, increases Medicare tax rates for very high-income households. Starting in 2013, you'll be charged an extra 0.9 percent Medicare tax on your income over that amount if your adjusted gross income is more than $200,000 a year for an individual, or $250,000 for a couple. So a couple bringing in $300,000 a year would pay roughly $450 more a year in Medicare taxes on their income than they do now—that's less than two-tenths of 1 percent of their income.
  
  The modified bill would also levy a 3.8 percent Medicare tax on unearned income such as dividends and royalties, but, again, only if you earn $200,000 alone, or more than $250,000 filing jointly. (Right now, you pay Medicare tax only on earned income such as salaries from a job.) The tax doesn't apply to distributions from qualified retirement plans, IRAs, or 401(k) accounts.