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Health Care and Education Reconciliation Act of 2010

Signed into law on March 30, 2010, the Health Care and Education Reconciliation Act of 2010 made several changes to the Patient Protection and Affordable Care Act that was signed into law a week earlier.  These changes have been incorporated into the provisions list of the Patient Protection and Affordable Care Act for purpose of clarification.  The list of changes is as follows:

  • Increasing credits to buy insurance
  • Eliminates several of the special deals given to senators, such as Ben Nelson’s “Cornhusker Kickback”
  • Lowers the penalty for not buying insurance from $750 to $695
  • Closes the Medicare Part D “donut hole” by 2020 and gives senior citizens a rebate of $250
  • Delays the implementation on taxing “Cadillac” health-care plans until 2018
  • Requires doctors who treat Medicare patients be reimbursed at the full rate
  • Sets up a Medicare tax on the unearned incomes of families that earn more than $250,000 annually
  • Offers more generous subsidies to lower income groups.  Households below 150% of the federal poverty level would pay 2% to 4% of their income on premiums.  Health plans would cover 94% of the cost of benefits.  Households with incomes from 150% to 400% of the federal poverty level ($88,200 for a family of four in 2010) would pay on a sliding scale from 4% to 9.8% of their income on premiums, rest will be covered by government advanceable, refundable tax credit.  health plans would cover 70% of the cost of the benefits.
  • Would increase the penalty to $2,000 for each full time worker in the company,  but would exempt the first 30 employees while calculating the penalty.  for example, and employer with 53 workers would pay the penalty for 23 workers, or $46,000.
  • Increase Medicaid payment rates to primary care doctors to match Medicare payment rates, which are higher, in 2013 and 2014
  • The federal government will pay all of the costs of expanding Medicaid under the reform until 2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% thereafter.  Some state that already insure childless adults under Medicaid would receive more federal money for covering that group through 2018.
  • Medicare patients will receive a 50% discount on brand-name drugs beginning in 2011.  By 2020, the government would pay to provide up to 75% discount on brand-name and generic drugs, eventually closing the coverage gap.
  • Extends the ban on lifetime limits and rescission of coverage to all existing health plans within six months after signing into law

Student Loan Reform

Title II of this Reconciliation bill deals with studen loan reform.  The language is very similar to the Student Aid and Fiscal Responsibility Act that passed the House in 2009, but with some slight variation.  The reform package includes:

  • Ending the process of the federal government giving subsidies to private banks to give out federally insured loans.  Instead, loans will be administered directly by the Department of Education.
  • Increases the Pell Grant scholarship award
  • For new borrowers of loans starting in 2014, those who qualify will be able to cap the amount they must spend on loan repayment each month to 10% of their discretionary income (current cap is 15%).
  • For new borrowers after 2014, loans will be eligible to be forgiven to those who make timely payments for 20 years (current timeframe is 25 years)
  • will make it easier for parents to take out federal PLUS loans for students
  • Several billion will be used to fund historically poor and minority schools, as well as increasing community college funding
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