There’s still a long way to go, but odds are good that President Obama will sign a bill before Christmas. By Martha Lynn Craver, Associate Editor October 19, 2009 As Congress moves closer to a health bill -- one that will affect the lives of almost all Americans and businesses -- key questions come to the fore. 1. Will there be a bill this year? Probably. There are still huge differences to resolve, such as whether to offer a public option and how to pay the cost -- about $900 billion over 10 years. But Democrats are determined to secure passage, and President Barack Obama will twist as many arms as he has to. 2. What happens next? The painful process of melding five very different bills approved by five separate House and Senate committees into a single measure. Senate Majority Leader Harry Reid (NV) is leading the Senate discussions, trying to appease both the liberal and conservative wings of his party. He needs virtually every vote in his caucus to overcome Republican efforts to filibuster. In the House, Speaker Nancy Pelosi (CA) is readying a bill for floor action. 3. What about Republicans? The final result won’t be bipartisan. One or two Republicans may vote for the legislation, and it includes some ideas offered by Republicans, but by and large, it will be a Democratic health bill. Advertisement 4. What are the key elements? A mandate forcing individuals to buy coverage or pay a penalty, an expansion of Medicaid, subsidies to help those who make too much to qualify for Medicaid plans but not enough to buy insurance, and rules requiring insurers to sell to all applicants, regardless of preexisting conditions. Also in the bill: A new exchange or marketplace intended to make it easier for buyers to shop for coverage, thus fostering competition. That would mean 25 million uninsured in 10 years, down from a projected 60 million. 5. Will it cost more for employers that offer coverage now? It’s not designed to. If fewer people are uninsured, premiums will decline for others because the cost of treating the uninsured won’t be as burdensome. And employers will greatly benefit if the overhaul reins in long term costs. The bill also may help pay for retiree coverage. Critics warn, however, that it won’t work if penalties for not buying coverage aren’t high enough to force young, healthy folks into plans. That’ll raise premiums, making a bad situation worse for companies and individuals. 6. What about small companies? Firms with fewer than 25 workers will get a tax credit if they offer plans, and they could use the exchanges to get more competitive rates. The exchanges would force insurers to compete with each other. They’d add options for individuals and firms, many of whom now have only limited and expensive choices. 7. Will firms face penalties for not offering coverage? There’s no mandate requiring coverage, but employers that don’t offer it will face some costs. They’ll have to reimburse Uncle Sam for any subsidies provided to their company’s workers when they buy health coverage. Advertisement 8. Will there be a public option? The odds are improving, but there is still a lot of opposition. If the provision survives, it will be limited in scope and availability. Most likely is a low-cost, barebones government option to compete with similar private insurance plans, but it will only be available to those who don't have coverage through their employers. And individual states will probably be allowed to opt out. 9. Will the health bill raise the deficit? In theory, no, but we’re skeptical. Congress won’t pass a bill unless it’s officially certified as revenue neutral by the Congressional Budget Office. But the CBO can make only an educated guess based on a slew of assumptions that may or may not be right. There’s no guarantee. 10. How will the enhanced coverage be paid for? Tax hikes and Medicare cuts. 11. What kinds of taxes? We don’t know yet. The House wants a 5.4% surcharge on singles making over $500,000 a year and on couples earning over $1 million. The Senate prefers fees on the health care industry and a tax on high priced health care plans. Critics say fees would backfire, leading to higher medical costs and higher premiums, basically undercutting the bill’s goals. Because of the opposition to all these ideas, some lawmakers are going back to the drawing board to come up with new ones. Advertisement 12. What will be the impact on Medicare? Spending will rise more slowly -- at about 5.9% annually instead of 6.6% -- with up to $500 billion sliced from projected costs. Providers will take the hit initially, but they’ll likely make it up by raising fees for other patients. More doctors may just decide to drop out of Medicare altogether. Beneficiaries in the private Medicare Advantage plans will likely see benefits cut and premiums increase. In other ways, though, Medicare benefits will be expanded. For example, seniors would see enhanced prescription benefits and free access to many prevention services 13. When will it take effect? It’ll likely be phased in beginning in 2013. 14. What are the political implications for President Obama? Huge. That’s why he’ll play a much greater role in the health care endgame. Failure to pass a bill this year could cripple his influence on Capitol Hill, making it even harder to achieve other goals, such as climate change legislation. 15. What about the congressional elections next year? Health care will be a critical issue -- second only to jobs -- in the 2010 elections. The bill will not have taken effect yet, but everyone will have strong opinions about it. Republican candidates will attack Democrats for favoring big government takeovers and adding to the deficit. Democrats can claim they finally took comprehensive action on health care, after several decades of trying unsuccessfully to reform the system. For weekly updates on topics to improve your business decisionmaking, click here.