Summary of the Health Care and Education Reconciliation Act of 2010
The HealthCare and Education Reconciliation Act of 2010 was signed into law along with the Patient Protection and Affordable Care Act, below is a summary. The health care related sections of both of these laws is what we usually think of as “ObamaCare”.
The Student Aid and Fiscal Responsibility Act was attached as a rider to the HealthCare and Education Reconciliation Act of 2010. Small technical parts of the bill relating to Pell Grants were removed during the reconciliation process. The end result is that some important reforms, some we attribute to ObamaCare and others we don’t, are actually contained within the HealthCare and Education Reconciliation Act of 2010 and not within the core of the PPACA itself.
- See Summary of Provisions in the Patient Protection and Affordable Care Act for a summary of each PPACA provision.
- Read the full compilation of the PPACA and HealthCare and Education Reconciliation Act.
Below is a quick summary of what this part of the legislation does. Most of the information on this page is from Wikipedia articles on the Student Aid and Fiscal Responsibility Act and the HealthCare and Education Reconciliation Act of 2010. We will include annotations when appropriate, please be aware that some of the exact dollar amounts have changed.
Amending the Senate’s Healthcare Bill
The Reconciliation bill made several changes to the Patient Protection and Affordable Care Act that was signed into law 7 days earlier on March 23, 2010. These changes include the following
- Increasing tax credits to buy insurance
- Eliminating several of the special deals given to senators, such as Ben Nelson‘s “Cornhusker Kickback“
- Lowering the penalty for not buying insurance from $750 to $695
- Closing the Medicare Part D “donut hole” by 2020 and gives seniors a rebate of $250.
- Delaying the implementation on taxing “Cadillac health-care plans” until 2018
- Requiring doctors who treat Medicare patients be reimbursed at the full rate
- Setting up a medicare tax on the unearned incomes of families that earn more than $250,000 annually.
- Offering 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) 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.
- penalty for a company with more than 50 workers not offering health care coverage after 2014, of $2,000 for each full-time worker above 30 employees. For example, an employer with 53 workers will pay the penalty for 23 workers, or $46,000.
- increasing Medicaid payment rates to primary care doctors to match Medicare payment rates, which are higher, in 2013 and 2014.
- the federal government paying all costs of expanding Medicaid under the reform until 2016, 95% in 2017, 94% in 2018, 93% in 2019, and 90% thereafter. Some states that already insure childless adults under Medicaid would receive more federal money for covering that group through 2018.
- a 50% discount on brand-name drugs for Medicare patients 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.
- extending 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 the reconciliation bill deals with student 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 included
- 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.
- Increasing the Pell Grant scholarship award.
- For new borrowers of loans starting in 2014, those who qualify would be able to cap the amount they must spend on loan repayment each month to 10% of their discretionary income, down from 15%.
- For new borrowers after 2014, loans would be eligible to be forgiven to those who make timely payments after 20 years, down from 25 years previously.
- making it easier for parents to take out federal loans for students.
- using several billion dollars to fund schools that predominantly serve poor and minority students, as well as increasing community college funding.