I was unable to slog through the 2,074-page Senate bill last night – were you – but a picture is gradually emerging of the Senate health care bill, which borrows most of its elements from the bills that passed the Senate Finance Committee and the Senate HELP Committee. I think “mixed bag” is definitely the best way to describe it. I’ll take it in sections.

Coverage
The plan is scheduled to cover 31 million uninsured Americans who don’t currently have coverage, and that’s not a little thing. It does this first through an expansion of Medicaid to 133% of the poverty level, adding millions to the Medicaid rolls (I think the House expands up to 150%. For the first three years, the government pays 100% of the expansion in the states, and then average around 90% thereafter. So any additional burden on the states wouldn’t hit until three years after implementation.

The Chidren’s Health Insurance Program is preserved in this bill, unlike the House and along the lines of what Jay Rockfeller did in the SFC. It would also get expanded funding to cover children. Dependents can stay on their parent’s plans until age 26 and that kicks off immediately. Some small businesses get tax credits to purchase insurance.

Finally, there’s the exchange, and the affordability credits. This would subsidize the purchase of insurance between 133-400%. Those credits are designed to ensure that nobody pays more than 2% of their income in premiums at the lowest end, and 9.8% of premiums at the high end. That’s a better deal for the middle class, but would be more expensive at the low end than the spread in the HELP Committee (which was 1%-12.5%).

There is an individual mandate to purchase insurance, with a small penalty of $95 in the first year that goes up thereafter, ending at around $750. In general the mandate is a bit stronger and the hardship exemptions to that mandate less extensive than the SFC bill. There’s no premium surcharge for late enrollees. There is still no employer mandate. Here’s how CBO describes the employer provision:

Firms with more than 50 workers that did not offer coverage would have to pay a penalty of $750 for each full-time worker if any of their workers obtained subsidized coverage through the insurance exchanges; that dollar amount would be indexed. As a rule, full-time workers who were offered coverage from their employer would not be eligible to obtain subsidies via the exchanges. However, an exception to that “firewall” would be allowed for workers who had to pay more than a specified percentage of their income for their employer’s insurance—9.8 percent in 2014, indexed over time—in which case the employer would be penalized.

I think the hope is that it would not be worth it for large employers to opt out of coverage, but this policy is rife with potential for companies to game it, and it could lead to hiring discrimination against low-income individuals versus spouses with income in the family, or teens getting a weekend job, etc.

The Cantwell plan for states to use their bargaining power for low-income individuals up to 200% of poverty to buy group insurance is still in the bill.

This also incorporates the CLASS Act, a voluntary long-term care insurance program run by the federal government, something first proposed by Ted Kennedy.

Public Option
In that exchange is a national public option paying negotiated rates, which everyone eligible for the exchange can purchase (that’s the self-employed, those uninsured by an employer, and certain small businesses, though if employer coverage doesn’t meet an affordability standard, those individuals can go on the exchange as well). However, there is a state opt-out provision. The state would have to pass a law through their legislature and then have it signed by their Governor to opt out. However, it just says “pass a law,” so states with a ballot referendum process could possibly use that as well. They could pass a law repealing that to opt back in. This appears to be available to states at any time; they could start opting out well before the public option is available.

CBO estimates that states with 1/3 of the nation’s population would opt out, but that’s a dicey prediction to make, so I don’t entirely trust it.

The co-ops from the Senate Finance Committee, harmless and ineffectual though they are, remain in the bill.

A new provision would close the donut hole by $500 in 2010.

Cost
The Majority Leader is giddy about the overall cost of the bill, at $848 billion (CBO modified) over ten years. Wanna know how they got there? They delayed implementation another year. The exchanges, Medicaid expansion, individual and employer responsibility statutes, certain regulations on insurers, et al. don’t begin until 2014. There are some things which hit right away – banning rescissions, allowing dependents to stay on the plans until age 26, the bans on annual and lifetime limits, a mandated medical loss ratio, administrative simplicity of insurance forms, and the small business tax credit. Everything else? Wait until 2014. A senior leadership aide told me that the Senate Finance Committee had different dates for their Medicaid expansion and their exchanges, and they just wanted to normalize them. I still say the decision was just a way to make reform cheaper in the near term.

The bill reduces the deficit $127 billion in the first ten years and $650 billion in the second ten, though I find the latter number suspect for a reason I’ll explain later.

The cost, as Ezra Klein says, is a concession, not something to celebrate. Most experts believe that true affordability would come with a price tag of $1.2 trillion over ten years, not $848 billion. I think Reid has left himself some wiggle room, about $50 billion, to add affordability measures and still come in under the self-imposed limit of $900 billion. But it’s not really enough.

Regulations
In addition to those already named – no rescissions, no limits on lifetime spending or annual spending – the bill by 2014 bans denial of coverage for pre-existing condition, and does mandate a medical loss ratio. In fact, it essentially taxes Blue Cross/Blue Shield if they fail to reach an 85% loss ratio, meaning they have to spend 85% of premium revenue on treatment. There are also limits on out-of-pocket spending, and exemptions from co-pays for a variety of preventive services.

Financing
The bill takes a lot of the Senate Finance Committee’s financing and modifies it. The excise tax on high-end insurance plans has been limited, raising the threshold from $8,000 for an individual plan and $21,000 for a family plan to $8,500/$23,000. It indexes to inflation +1% annually. There are changes to Medicare, including cuts to Medicare Advantage subsidies and delivery system reforms, that would save close to $500 billion over ten years. Reid added a Medicare payroll tax of .5 percentage points for individuals making over $200,000 a year or families making over $250,000. So it’s a blend of wealth taxes and excise taxes. There’s also a “nip/tuck” tax of 5% on elective cosmetic surgery. The tax on medical device manufacturers was reduced by half (and that was to get Evan Bayh’s vote).

I’m sure I’ve missed things (I’ll cover the abortion amendment separately) but that’s the gist of it. You can read the bill, and the CBO analysis.