Obama's Health Care Solution: What is it saying?

“Health Care Reform” has been the new buzz phrase as the Obama administration attempts to tackle America’s most pressing health care issue: wellness. However to the average employee, the health care reform plan has appeared vague at best. It is unclear as to exactly what the Obama administration will implement.

The current health care reform bill which was proposed by Chair of the Senate Finance Committee, Senator Max Baucus – (D-MT) (Nytimes -1) appears to be the most promising thing that has been seen and the Democratic party hopes to have it pass through the senate by the end of the year.

Obama's new health care reform plan moves toward the idea of health care “cooperatives” that have been mentioned several times by the administration. These “cooperatives” are intended to create more health care competition within insurance markets in order to create more affordable health care coverage, however some of this cost will be put on the consumer and the company.

The Obama administration states that there will be health care mandates that will be put into effect in 2013, and those that do not follow the health care mandates will be penalized. According to this new reform, by the year 2013, all Americans would be required to obtain health insurance.

The penalty for failing to follow the reform would be the following: “For those Americans that exist below 100 percent of the poverty line, there would be no penalty. Within 100 to 300 percent of the poverty line, the penalty would range from $750 dollars per individual to $1500 dollars per family. Above 300 percent of the poverty line the penalty would range from $950 per individual to $1500 per family.” According to Obama’s plan, with this reform no penalties would be put on individuals that are qualified for health care under Medicaid.

Due to the reform mandate requiring people to purchase health care coverage, there is a “sliding scale” set that will aid people in paying their insurance premiums. There would be tax subsidies for those people that exist within 300 percent of the federal poverty line, however subsidies for those above 300 percent would not come into existence until insurance premiums exceeded 12 percent of their annual income.

In an attempt to make costs manageable, the reform bill states that there will be a maximum out of pocket expense implemented for individual employees and families to pay. For individuals that are within 200 percent and 300 percent of the federal poverty line, effective in 2010, the limits would equal $3,987 for individual and $7,973 per family. However there is no reform limit in place for those who live above 300 percent of the poverty line.

In addition to falling on the shoulders of employees, some of the taxation burden will fall on large businesses. The Obama reform states that companies will not be required to offer insurance benefits to employees. However, for those companies that have at least 50 full- time employees that are receiving federally subsidized health care, the Obama administration states that the company will have to pay fees for each employee.

The new health care reform system is an attempt by the Obama administration to ensure that every employee and individual is able to maintain their health and wellness. Whether or not the burden will be too large on the individual or the company remains yet to be seen.

* information retrieved from Reuters . com and barackobama . com