What Congress' health-care overhaul is likely to mean for you

WASHINGTON — Here's where things stand on changes in the health-care system and how you might be affected.

Q: What are the biggest disputes?

A: There are scores of disagreements, but the biggest battles will come over how the legislation would be funded, whether to include a government-run insurance plan and how much to spend on subsidies to help lower- and middle-income Americans afford insurance.

Abortion remains perhaps the thorniest issue. The Senate bill would allow insurance plans that operate in newly created exchanges, or marketplaces, to offer abortion coverage, but enrollees would have to write separate checks for it. The House bill has tighter language: Insurers in the exchanges that accept federal subsidies — likely to be most, if not all, of them — couldn't provide abortion coverage at all.

Q: Would everyone have to buy insurance, and what happens if they don't?

A: Under both bills, most Americans would be required to have coverage or to pay a penalty. Some would be exempted, because of financial hardship or religious reasons. Under the House bill, you would have to have coverage by 2013 or pay up to 2.5 percent of your income; the penalty couldn't exceed the average cost of a plan sold in the exchanges.

The Senate version would take effect in 2014. The penalty for not having coverage would be $95 in 2014 or 0.5 percent of an individual's income, whichever is higher. The penalty would increase in 2016 to $750, or 2 percent of income, up to the cost of the cheapest health plan.

Q: How would the legislation affect seniors?

A: The Medicare prescription-drug benefit would be improved substantially under both bills, although only the House bill would eliminate the sizable coverage gap called the "doughnut hole" by 2019. Both bills would enable most seniors to get half-price brand-name drugs when they hit the gap. The final bill to emerge from conference might favor the more generous House approach.

Under both bills, government payments to Medicare Advantage, the private-plan part of Medicare, would be cut back. If you're one of the 10 million beneficiaries covered by those private plans, you could lose extra benefits that many offer, such as free eyeglasses, hearing aids and gym memberships.

Both bills would make all Medicare preventive services, such as screenings for colon, prostate and breast cancer, free to beneficiaries.

Q: How would the legislation affect people who can't afford health coverage?

A: Both bills would expand Medicaid, the state-federal program for poor people and those with disabilities, to include millions of people, including childless adults, who generally aren't eligible. Under the House bill, individuals with incomes up to 150 percent of the federal poverty level, or $16,245, would be eligible for Medicaid. Under the Senate bill, eligibility would reach 133 percent of poverty, or $14,404 for individuals.

Otherwise, you could get help buying private insurance in the new marketplaces, called exchanges. Both bills would provide billions for subsidies once premiums exceed a certain percentage of annual income. The House bill is more generous if your income is on the lower end; the Senate is more generous for those on the higher end. The subsidies end at four times the poverty level, $88,200 for a family of four.

Even if you don't qualify for subsidies, you could get financial relief. Both bills would require your insurer to pick up your out-of-pocket costs — such as coinsurance, the portion of the bills that you pay — once they exceed a certain amount. If you work for a company, however, you may not have to buy insurance directly, because both chambers place new responsibilities on employers, and in some cases offer them financial incentives to begin offering insurance.

House subsidies would cost about $93 billion in 2016; the Senate's $55 billion. Although House members want the Senate to cough up more for subsidies, it may be tough.

Q: How much is this going to cost? Will my taxes increases?

A: The House-passed bill is estimated to cost $1 trillion over a decade, the Senate bill $871 billion. The final measure probably will be closer to the Senate bill. President Obama has said he would like the cost kept at less than $900 billion.

Both bills hit up the wealthy, but in different ways. The House would impose a 5.4 percent income-tax surtax on individuals who earn more than $500,000 a year and couples that earn more than $1 million. The Senate would increase the Medicare payroll-tax rate from 1.45 percent to 2.35 percent for people who earn more than $200,000 a year and families that earn more than $250,000.

The Senate also would impose a 40 percent tax on the portion of most employer-sponsored health coverage that exceeds $8,500 a year for individuals and $23,000 for families and would raise the threshold for deducting medical expenses to 10 percent of income, up from 7.5 percent.

Both chambers would place new fees on the medical-device industry and would limit to $2,500 a year the amount you could place in flexible savings accounts.

Q: How would the legislation affect current insurance policies? Would those with health problems have an easier time finding coverage?

A: If you have a medical condition, both bills would make it easier for you to find coverage; insurers would be barred from rejecting applicants based on health status once the exchanges are operating — 2013 in the House bill, 2014 in the Senate version.

In the meantime, both bills would create a temporary high-risk pool for people who have been rejected for coverage or have pre-existing medical conditions. Both bills also would bar insurers from retroactively canceling policies of individuals who fall ill with costly conditions.

Under the bills, the exchanges initially would be open only to individuals who buy insurance and to certain small businesses. New policies sold on an exchange would have to cover a range of benefits, including hospitalization, doctor visits, prescription drugs, maternity care and certain preventive tests. Both bills say insurers couldn't set lifetime coverage limits; the Senate also restricts annual limits. Those who want to keep existing policies generally could do so.

Q: The public option isn't in the Senate bill. Is Congress still likely to approve it? If not, what's the alternative?

A: The Senate is unlikely to accept the government-run "public option" that is in the House bill. Instead, Senate Democrats would create large, privately run, multistate insurance plans and have the federal Office of Personnel Management administer them. Every exchange would offer at least two such plans, one of which must be nonprofit. The final deal is expected to include this Senate provision.

Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health-care-policy research organization that isn't affiliated with Kaiser Permanente.