Momentous moment for President Obama

Health reform passed

In what was a momentous moment for President Obama, US Congress has passed his historic $940 billion healthcare reform bill. Obama managed to convince enough Democrats in Congress to pass the bill which will give nearly every American the right to health coverage, and allow him to make his firm mark on his time in office.

Obama's victory came by a narrow margin of 219 to 212, with all Republicans and 34 Democrats opposing. But it secured the most sweeping domestic reform since the 1960s that only a few weeks ago seemed dead and buried when the Democrats lost a crucial Senate by-election in Massachusetts.

"We proved we are still a people capable of doing big things and tackling big challenges," said Obama. Reprising his campaign mantra he added: "This is what change looks like, tonight we answered the call of history."

Obama did go on to state though, "This legislation will not fix everything that ails our healthcare system, but it moves us decisively in the right direction," the BBC report.

32 million more Americans

The legislation aims to cover 32 million more Americans - covering 95 percent of the country - by establishing a new health insurance market or "exchange," plus coverage expansions to the Medicaid program. It significantly revamps the way insurance companies do business; prohibiting insurers from placing lifetime caps on coverage and denying care and coverage for people with pre-existing conditions.

Most Americans will now be required to have health insurance or pay a fine.

The bill would open the nation's 45-year-old Medicaid insurance program for the poor to all Americans earning less than 133 percent of the federal poverty line - $14,404 for an individual or $29,327 for a family of four.

At the same time it imposes insurance mandates for individuals and employers. The bill includes limits on physician ownership of hospitals.

Most Americans - those who already have employer-based insurance - will not see much change for a while and certainly not in the seven months before the elections. However they will get one important benefit quickly: for an additional fee, parents will be able to keep adult dependent children on their policy until the age of 26. That is good news when so many young people are struggling to find jobs during the recession, The New York Times reports.

It won't be until 2014 that many changes to will come into force. Also in 2014, tax credits would be provided to families to help offset the costs of healthcare premiums - the amount of tax credits would be based on annual household incomes.

In a last-minute move designed to win the support of a bloc of anti-abortion lawmakers, Obama earlier on Sunday announced plans to issue an executive order assuring that healthcare reform will not change the restrictions barring federal money for abortion. Exceptions will be made in cases of rape, incest, or danger to the life of the woman.

The vote provided the climax to a year of debate in which the bill at times seemed on the verge of passage and at others about to be scrapped. The issue has divided the country more than any other since the Vietnam war, and led to the rise of the anti-establishment movement the Tea Party.

Winners and losers

Like anything, there is winners and losers when it comes to this bill. The winners include brand-name drugmakers, as the pharmaceutical industry largely keeps its $80 billion agreement to provide savings and rebates. Its fees, to be parceled out among companies such as Pfizer Inc and Merck & Co Inc, would be delayed from 2010 to 2011, increasing from the initial $2.3 billion a year to $2.7 billion.

Device makers have also done well as fees for medical device makers such as Boston Scientific and Medtronic Inc would be delayed until 2013 after initial bills called for 2010. The sector earlier won a reduction in an industry tax to $20 billion, down from $40 billion, Reuters reports.

Although health insurers are going to face tighter regulations, there was some good news for some, as insurers such as Aetna Inc, Cigna Corp, UnitedHealth Group Inc and WellPoint Inc saw their $67 billion, 10-year tax delayed until 2014. Also, private Medicare plans called Medicare Advantage would see their payments frozen in 2011, then lowered in 2012. The plans, which can offer more benefits than traditional Medicare coverage, would also have to spend at least 85 cents out of every dollar on medical costs - leaving 15 cents toward overhead and salaries, among other things.

The bill changes penalties for individuals who do not buy health insurance as mandated. The fine is lowered from $495 to $325 in 2015 and from $750 to $695 in 2016, but the alternative method of fining people using a percentage of income increased slightly to 2.5 percent by 2016.

Funding the bill

To pay for their legislation, Democrats approved a new 3.8 percent tax on investment income for individuals earning more than $200,000 and couples earning more than $250,000. In 2018, people with high-end "Cadillac" health plans would be subject to a new tax on their benefits.

Also, medical device makers, pharmaceutical companies and insures would be subject to new excise taxes.

The bill would also cut more than $400 billion over the next decade in what Medicare pays to hospitals, nursing homes and insurance companies that provide Medicare Advantage plans, a provision that proponents hope would ultimately help make the system more efficient.

That package - agreed to in negotiations among House and Senate Democrats and the White House - now goes to the Senate for action as soon as this week.

Opposition to the bill

However, the passing of the bill has angered many. The Republicans say that the measures are unaffordable and represent a government takeover of the health industry.

"We have failed to listen to America," said Republican party leader John Boehner.

Thousands of protesters gathered outside Congress at the weekend, shouting "kill the bill". Some directed racist and other derogatory remarks at African-American members of Congress, including John Lewis, one of the veterans of the 1960s civil rights movement. One congressman was even spat on.

Many Republicans say the overhaul will drive the nation deeper into debt at a time when it is still struggling to recover from recession, The LA Times reports.

The president is expected to sign the House-passed Senate bill as early as Tuesday, after which it will be officially enacted into law. However, it will contain some very unpopular measures that Democratic senators have agreed to amend.

The Senate will be able to make the required changes in a separate bill using a procedure known as reconciliation, which allows budget provisions to be approved with 51 votes - rather than the 60 needed to overcome blocking tactics.

The Republicans say they will seek to repeal the measure, challenge its constitutionality and co-ordinate efforts in state legislatures to block its implementation.

Does the healthcare reform just look good on paper, or will it actually achieve what Obama believes it will?

Jodie Humphries

Jodie Humphries graduated from Bath Spa University with a BA Hons in Creative Writing in 2008. She has worked for GDS Publishing for the digital group since July 2009. She has previous experience with writing for the web, running her own website since April 2007.

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