Massachusetts Health Plan Model

Here are the main points of the Massachusetts Health Plan. Senator Obamas plan is thought to mirror the approach described below.

Legislators say by that by providing every Massachusetts resident with health insurance, the costs of health care are actually lowered. For instance, the way the system works now, employers who offer insurance also have to pick up part of the tab for the cost of care for the uninsured at hospitals. By having more employers provide insurance, and having fewer uninsured people, these costs to employers go down. Analysts also say that adding more healthy people -- who use less care -- into the insurance system keeps deductibles and premiums down for all.

A look at how the bill would affect employers and individuals:

All individuals must have coverage.
-- Those below 300 percent of the federal poverty level (about $38,500 for a family of three), but not eligible for Medicaid, will have their private insurance plans subsidized at a sliding-scale rate. -- Children whose families earn below 300 percent of the federal poverty level (FPL) will be given free coverage through Medicaid.
-- Individuals with incomes below the FPL ($9,600) will have premiums waived on private insurance. (Currently most childless adults are not eligible for coverage under the state's Medicaid plan.) -- Those who can afford insurance will be increasingly penalized for not buying coverage. In the first year, they'll lose their state personal income tax exemption.
-- Family coverage will be extended to cover young adults up to the age of 25.
-- Allows the use of "health savings accounts" with cheaper high-deductible "catastrophic" coverage plans. HSAs allow consumers to invest money and withdraw it "tax free" to cover health-care costs. BusinessesAll employers who have more than 10 employees must contribute to employee health-care costs.
-- Employers who don't provide insurance will pay an annual fee of $295 per full-time employee.
-- Encourages private insurers to offer more low-cost options.
-- Creates a "health insurance connector" to help individuals and businesses find affordable private coverage.