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Senate health care, take two

OK, I'm not going to post every time there's a proposed change to health care reform legislation. I could spend 24/7 doing that, driving both me and y'all crazy(ier).

But since I've given the Senate version, originally announced last week and now being debated in the Senate Finance Committee, a lot of attention, I did want to share some key changes (so far) in the chairman's health care reform proposal.

Individual costs: In his second "mark," or working document, Sen. Max Baucus (D-Mont.), has dramatically reduced the proposed excise tax that would be assessed folks who didn't purchase insurance.

The maximum penalty for those making more than 300 percent of the federal poverty line would be $1,900 instead of the original $3,800.

He's tweaked the percentage of medical deductions that would be needed to itemize these costs. Right now, you have to have allowable medical costs that exceed 7.5 percent of your adjusted gross income before you can claim them on Schedule A. That would become 10 percent (the same level as required if you fall under the alternative minimum tax, or AMT), effective with the 2013 tax year.

As for flexible spending accounts (FSAs), Baucus now wants to increase his $2,000 cap on contributions to $2,500. That limit would begin with the 2011 tax year.

The Senator would leave his 20 percent penalty (up from 10 percent) on distributions from health savings accounts (HSAs) that aren't used for qualified medical purposes. However, instead of the higher penalty kicking in next year, it wouldn't start until 2011.

A long way to go: The Senate Finance Committee is still slogging through more than 500 amendments (links to which are included in Senate health bill to get major surgery), so there could be more changes. Then it would go to the Senate floor where additional modifications could occur.

And finally, any Senate bill will have to be reconciled with House legislation in a conference committee, meaning yet more changes.

As I said, 24/7 and at the current pace (debate on one amendment this morning took two hours), it could take 365 days, too.

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Health insurance companies pay an average of 80-90% of what they collect in premiums. After paying all of their administrative costs, that leaves some insurance companies with less than a percent profit. I really wish an independent researcher could step into the media with a bit of insight.

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