WASHINGTON -- Citing financial concerns, the Obama administration has begun quietly winding down one of the earliest programs created by the president's health care overhaul, a plan that helps people with existing medical problems who can't get private insurance.

In an afternoon teleconference with state counterparts, administration officials said Friday the Pre-Existing Condition Insurance Plan, or PCIP, will stop taking new applications. People already in the plan will not lose coverage.

Designed as a stopgap solution until the law's full consumer protections are in effect next year, PCIP has served more than 135,000 people, a lifeline for patients with serious medical problems such as cancer and heart failure. But Congress allocated a limited amount of money, and the administration's technical experts want to make sure it doesn't run out.

Health and Human Services Department spokeswoman Erin Shields Britt said PCIP has "provided needed security to some of our nation's sickest people."

The plan covers people who have had problems getting private insurance because of a medical condition and have been uninsured for at least six months. Premiums are keyed to average rates charged in each state, which means they're not necessarily cheap, often amounting to several hundred dollars a month for middle-aged individuals.

"We're glad this program was here and able to help," said Amie Goldman, who oversees the program in Wisconsin. "I'm certainly disappointed we won't be able to serve everyone who has a need for this coverage."

Starting next January 1, insurance companies will no longer be able to turn anyone away because of poor health. At the same time, the federal government will begin subsidizing coverage for millions of individuals who have no access to employer plans. That means many of the people currently in the PCIP program may end up with lower premiums once the government's financial help is factored in.

The enrollment suspension will take effect immediately in 23 states where the federal government administers the program, Goldman said. Residents of states that run their own programs may have longer. Wisconsin residents, for example, have until March 2 to apply.

Enrollment around the country has been lower than expected, partly because some people could not afford the premiums. But individual cases have turned out to be costlier than originally projected.

In documents provided to the states, the administration said the program has spent about $2.4 billion in taxpayer money on medical claims and nearly $180 million on administrative costs, as of Dec. 31. Congress allocated $5 billion to the plan.

"From the beginning (the administration) has been committed to monitoring PCIP enrollment and spending closely and making necessary adjustments in the program to ensure responsible management of the $5 billion provided by Congress," PCIP director Richard Popper wrote in a memo. "To this end, we are implementing a nationwide suspension of enrollment."

The sole exception: program beneficiaries who move to another state will still be able to get coverage in their new home.

Associated Press writer Ann Sanner in Ohio contributed to this report. 

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People worried about having to pay a fine for not carrying health insurance coverage got a little more guidance this week with some new federal regulations. The bottom line: Hardly anyone will end up paying the tax when the health reform law takes full effect in 2014.

The Urban Institute has projected that only about 2 percent of Americans would likely have to pay what the government calls the “shared responsibility payment.” The new regulations from the Internal Revenue Service and the Health and Human Services Department explain all the ways people can get out of paying it.

“What we are talking about is a relatively small slice of the population,” says Linda Blumberg, senior fellow at the Urban Institute’s health policy center.

The Congressional Budget Office has said that 80 percent of the non-elderly population would have some sort of health insurance even without the health reform law.

The so-called individual mandate, one of the least popular provisions of the 2010 health reform law, is meant to make sure that people don’t wait until they are sick to buy health insurance—especially as the law makes health insurance available more easily to more people, including those who are already sick.

The idea is that people will have many more chances to get health insurance because of the exchanges, the marketplaces where private insurance plans will offer policies for people to buy if they are not covered by an employer or by government-sponsored insurance such as Medicare, Medicaid and Tricare.

And the federal government is subsidizing all but the wealthiest buyers. The Supreme Court ruled it constitutional and says the payment is actually a tax.

It’s a nominal tax at first -- $95 in 2014, $325 in 2015 and $695 or 2.5 percent of household income in 2016. The IRS will make sure people pay it. Starting next year, you’ll have to declare where you get your health insurance on your income tax form.

“If you don’t pay on your tax returns if you own an assessment, what they are going to do is take it out of possible future tax refunds,” Blumberg said in a telephone interview.

One way the law aimed to get more people covered by health insurance was by making Medicaid more widely available. But the Supreme Court ruled last summer that states, which administer Medicaid and pay for part of it, could opt out.

The regulations make it clear there are plenty of exemptions. For instance, people who live in a state that has decided against expanding Medicaid won’t have to pay the tax if they would have been eligible for Medicaid.

So, if people live in a state that isn’t expanding Medicaid, they might not be on the hook to buy health insurance for themselves, although the government recommends they do.

“That’s an important clarification,” Blumberg says.

Also, people get one three-month slide. You can go for as long as three months, one time, without health insurance before the payment kicks in. After that, the IRS rules say people will be assessed 1/12^th of the annual payment for each month they or their legal dependents lack coverage.

“For each month during the taxable year, a nonexempt individual must have minimum essential coverage or pay the shared responsibility payment,” the regulation reads.

People are exempt if they are in jail or prison, if they make too little money to file an income tax return ($9,500 a year for an individual), if their health insurance premium would cost them more than 8 percent of annual income, members of Indian tribes, those whose religion forbids buying health insurance, illegal immigrants, Americans living abroad, and members of a health care sharing ministry.

The IRS has a public hearing scheduled for May 29 on the new regulations.

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Don’t miss the latest health news on NBCNews.com

Americans are far more unhealthy than people in 16 other developed countries, and it’s probably our own fault, experts reported on Wednesday. We die younger from diseases such as obesity and heart disease, and we are far more likely to be murdered and die in car accidents, the researchers at the National Academy of Sciences found.

U.S. culture has a lot to do with it and policymakers need to take action right away to reverse the trend, the experts who wrote the report advised.

"It's a tragedy. Our report found that an equally large, if not larger, disadvantage exists among younger Americans," said Dr. Steven Woolf, chair of the department of family medicine at Virginia Commonwealth University, who chaired the panel.

“I, personally, was stunned by how pervasive the disadvantage was across so many topic areas.”

Experts have complained for years that Americans spend far more on healthcare than people in other rich countries, yet have poorer health. The latest report from the federal government shows Americans spent more than $8,600 a year per person on healthcare – more than twice what countries such as Britain, France and Sweden spend, even with their universal healthcare systems.

Yet we don’t live any longer and we are not even healthier, the report by the National Research Council and Institute of Medicine finds. The NRC and IoM, both parts of the National Academies of Science, provide advice to U.S. policymakers. The National Institutes of Health asked them to compare  the health of Americans to people in Canada, Australia, Japan and 13 European countries including Britain, France, Portugal, Italy and Germany.

“The size of the health disadvantage was pretty stunning,” Woolf told reporters in a telephone briefing.

Americans did worse in nine areas: infant mortality; injury and homicide rates; teen pregnancy and sexually transmitted diseases; the AIDS virus; drug abuse; obesity and diabetes; heart disease; lung disease; and disabilities.

And many of these affect young people, not the elderly. Americans are seven times more likely to be murdered than people in the other countries, and 20 times more likely to be killed by a gun.

"I don't think most parents know that, on average, infants, children, and adolescents in the U.S. die younger and have greater rates of illness and injury than youth in other countries,” Woolf said.

“For many years, Americans have been dying at younger ages than people in almost all other high-income countries,” the expert panel wrote.

There were a few bright spots. Americans have lower death rates from cancer, the No. 2 cause of death, and do better at controlling blood pressure and cholesterol. “Americans who reach age 75 can expect to live longer than people in the peer countries,” the report reads.

No one reason accounts for the differences, the experts said. It’s likely a combination of factors, from a U.S. reliance on cars that keeps us from exercising enough, to a love of fast foods, to rejection of being told what to do.

“We have a culture in our country … that cherishes personal autonomy and wants to limit intrusion of government and other entities upon our personal lives,” Woolf said. “Some of those forces may act against the ability to achieve optimal health outcomes.”

It’s clearly not pollution or some other outside factor, said Ana Diez Roux, an epidemiologist at the University of Michigan, who served on the panel. “It seems to be a whole bunch of things acting together,” she said.

“Something fundamentally is going wrong to cause our country to lose ground against other high-income countries,” Woolf added.

Some of the report’s findings: The United States has a higher infant mortality rate than the other countries, with 32.7 deaths per 100,000. Other countries have infant mortality rates between 15 and 25 deaths per 100,000.

U.S. men live the shortest lives, 75.6 years compared to 79 for Swiss men, who topped the charts. Most of the difference comes in men who die before they reach age 50. U.S. women, who can expect to live on average to just under 81 years, ranked second-last. Japanese women can expect to live to be 86.  

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Injecting a rare shot of bipartisanship in the nation's contentious health care overhaul, the Obama administration cleared four Republican-led states to build their own consumer-friendly insurance markets on Thursday.

With open enrollment for millions of uninsured Americans just nine months away — Oct. 1, 2013 — the four GOP-led states joined 17 states plus Washington, D.C., that have gotten an initial go-ahead to build and run insurance exchanges. Seven were approved Thursday.

Significantly, the list also included California, which has nearly 7.5 million uninsured residents. Democratic-led California was an early supporter of President Barack Obama's health care law and had been working diligently on its plan.

Insurance exchanges are not something consumers are familiar with.

"Most people don't really know what those words mean, but that's OK," said Rachel Klein, executive director of Enroll America, a nonprofit trying to educate the public about new benefits under the federal health care law. "What they really need to know is that there's going to be a new way to buy health insurance."

The new marketplaces are supposed to take the confusion and anxiety out of buying private health insurance for individuals and families who buy their coverage directly. Exchanges are meant to have the feel of an online travel sitean Expedia or Orbitz.

Exchanges will also offer some relief from sticker shock. Under the new law, about eight in 10 customers in the new marketplaces will be eligible for income-based federal aid to help pay their premiums.

Small businesses will have separate access to their own exchanges.

The approvals announced Thursday are provisional; administration officials said more work remains to be done before they'll issue final sign-offs.

The GOP-led states conditionally approved are Idaho, Nevada, New Mexico, and Utah. Idaho and Utah have Republican governors and legislatures. Nevada and New Mexico have GOP governors, but Democrats control their legislatures.

"We're on track for Idaho having a say over how this process works, instead of having the federal government dictate all of it," said Jon Hanian, spokesman for Republican Gov. C.L. "Butch" Otter. The legislature still has to weigh in.

A fifth Republican-led state, Mississippi, may yet win approval. However, the administration's decision is complicated by a legal dispute between Republican state officials. The governor does not want to participate, while the insurance commissioner does.

The federal government will set up and run the new marketplaces in states that opt out of playing any role, and 19 Republican-led states have taken that route. The rest of the states are either pursuing partnerships with Washington or still mulling their options.

Two states, Arkansas and Delaware, have been approved for partnerships. That means a state will handle consumer issues and oversee health plans while Washington takes on the back-office tasks of enrolling consumers and determining subsidies.

Right now, exchanges exist in only a couple of states, although some large private employers are also experimenting with them.

Originally a Republican idea, exchanges won bipartisan support, only to be abandoned by many in the GOP once they were incorporated into Obama's health care law.

The basic concept is that setting up a marketplace with clear-cut rules would benefit consumers and encourage insurance companies to compete, helping keep costs in check. Former Massachusetts Gov. Mitt Romney set up an exchange in that state under his 2006 health care overhaul law. And Utah has already launched one that caters to small businesses.

Under Obama's law, plans in the new marketplaces will have to cover a set of "essential" benefits, including hospitalization, doctor visits, prescriptions, prevention and care for pregnant women and young children. Cost to the consumer will be the main difference among plans, with four levels of coverage: bronze, silver, gold, and platinum. A consumer with a bronze plan will pay lower monthly premiums, but would face higher cost sharing for medical care.

Exchanges will also steer low-income people to state Medicaid programs. The law gives states the option to expand Medicaid to cover more of their low-income residents, with the federal government picking up about 90 cents of every dollar in added costs.

Coverage through exchange plans will begin on Jan. 1, 2014.

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After two years of political battles and a Supreme Court case, many, if not most, states are expected to tell the federal government Friday if they're willing carry out a key part of President Barack Obama's health care overhaul -- even after a last-minute deadline extension.

At issue is the creation of new health insurance markets, where millions of middle-class households and small businesses will shop for private coverage. The so-called exchanges will open for business Jan. 1, 2014, and most of their customers will be eligible for government subsidies to help pay premiums. The exchanges will also steer low-income people into expanded Medicaid programs, if states choose to broaden their safety net coverage.

Thursday evening, the Obama administration responded to a request for more time from Republican governors by granting states a month's extension, until Dec. 14.

Ahead of the original deadline, a check by The Associated Press found that 21 states plus the District of Columbia, have already indicated they want to become involved, either by building and running their own exchanges or partnering with Washington. The 16 that want to build their own exchanges, plus the District of Columbia, have a Jan. 1 deadline for the federal government to approve their plans.

This group of 16 includes mainly Democratic-led states such as California and New York, but also some Republican-led ones such as Mississippi and New Mexico.

Five other states have signaled they want to partner with the federal government. Those states would handle consumer issues and oversight of health plans in the exchanges, while the feds do the heavy lifting by enrolling individuals for coverage and determining who's eligible for government assistance. Among these states are Arkansas and North Carolina.

The number of partnership states could grow significantly, since the Obama administration has given states until next February to decide on that option. As of Thursday, 16 states indicated that they were weighing their options and have not made a final decision.

Among those, Ohio and Tennessee were considering the partnership route. And in Florida, Republican Gov. Rick Scott is now saying he wants to find a way to work with the federal government after years of steadfastly opposing Obama's overhaul.

Finally, 13 states have indicated they will default to the federal government, allowing Washington to set up and run their exchanges. The health care law provided that the feds would run exchanges in states that were not ready or willing to do so. In this group are states whose Republican governors have staunchly opposed the law, including Texas, Louisiana and South Carolina.

Obama's election victory guaranteed the survival of his health care law, which is eventually expected to provide coverage to more than 30 million people through the exchanges and expanded Medicaid programs. It was the final hurdle, after the Supreme Court upheld a legal challenge from 26 states. In the aftermath of the election, some Republican state leaders say it's time to accept the law.

"I don't like it; I would not vote for it; I think it needs to be repealed. But it is the law," said Mississippi Insurance Commissioner Mike Chaney, after announcing that his state wants to set up its own exchange. "If you default to the federal government, you forever give the keys to the state's health insurance market to the federal government."

Traditionally, states have regulated the private health insurance market.

But other Republican-led states say they don't have enough information to make a decision at this point and are clamoring for the Obama administration to release major regulations that have been bottled up for months.

"States are struggling with many unanswered questions and are not able to make comprehensive far-reaching decisions prudently," Govs. Bob McDonnell of Virginia and Bobby Jindal of Louisiana wrote Obama earlier this week. They asked for a meeting with the president, as well as a postponement of the original Nov. 16 deadline.

Some of their main concerns are hidden costs of operating the exchanges and the sheer bureaucratic complexity of the new system. The Obama administration has steadfastly maintained it will not postpone the Jan. 1, 2014, launch date for the law's coverage expansion. Open enrollment for exchange plans will begin even sooner, Oct. 1, 2013.

Policy experts in Washington are noticing the shift.

"I think it's a very practical decision for states now," said Alan Weil, executive director of the nonpartisan National Academy for State Health Policy. "We are going to have a significant number of states running their own exchanges, a significant number where the federal government is running the exchange and a significant number of partnerships. The bottom line is, we are going to have to figure out how to make all three models work."

Although the public remains divided about the health care law, the idea of states running the new insurance markets is popular, especially with Republicans and political independents. A recent AP poll found that 63 percent of Americans would prefer states to run the exchanges, with 32 percent favoring federal control.

The breakdown among Republicans was 81 percent to 17 percent in favor of state control, while independents lined up 65-28 for states taking the lead. Democrats were almost evenly divided, with a slim majority favoring state control.

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Wal-Mart Stores Inc's U.S. employees will pay between 8 and 36 percent more in premiums for medical coverage in 2013, and now some of the 1.4 million workers at the nation's largest private employer say they will forgo coverage altogether.

In mailings sent to employees for its recently completed open-enrollment period, Wal-Mart noted that its rates would increase because healthcare costs continue to rise.

For its most popular plan, which covers individuals, the payment per bi-weekly paycheck is going up by $2, or 13 percent. Other plans will see larger increases as the world's largest retailer, known for low prices, tries to control its own costs.

Still, Wal-Mart said average costs its employees will bear should only rise about 4.4 percent in 2013, due to the elimination of some high premium plans, its move to offer free heart and spine surgery to most employees at six health care centers, and provision of other services, such as access to a healthcare adviser. That is less than the 9 percent average increase expected for all American workers next year, according to a study by human resources firm Aon Hewitt, though it isn't clear whether the figures are comparable.

Wal-Mart's example could be a blueprint for other employers trying to manage their costs while also preparing to meet the requirements of President Barack Obama's 2010 Affordable Care Act.

The law, the biggest reform to America's healthcare in decades, is intended to make healthcare less expensive but critics question whether it will succeed. It will also take years to fully implement. In the meantime, Wal-Mart and other large companies are trying to control their healthcare costs, which have been rising an average of more than 6 percent per year.

Wal-Mart pays for preventive care such as routine checkups. However, workers must pay deductibles of at least $1,750 before Wal-Mart covers 80 percent of the cost of other care such as doctor visits and diagnostic tests.

The retailer will also defray some costs with a separate contribution of $250 or $500 for individuals, and double that range for families.

Some workers say the price hikes for next year have pushed them to drop coverage.

"I really can't even afford it now so for it to go up even a dollar for me is a stretch," said Colby Harris, who said he makes $8.90 per hour and takes home less than $20,000 per year working in Wal-Mart's produce department in Lancaster, Texas.

Harris, a 22-year-old smoker, was set to see his cost per paycheck rise to $29.60 from $25.40. He says he has decided not to sign up for coverage.

More than half of Wal-Mart's U.S. employees sign up for its healthcare plans, which cover 1.1 million people, including dependents. Store workers across the country are offered the same plans as executives back at Wal-Mart's headquarters in Bentonville, Arkansas.

"Over the past few years we've all seen the cost of health care continue to rise nationwide, and 2013 is no different," Wal-Mart said in a statement. "As a result, we are adjusting rates for some of our health care plan choices. We are doing our best to keep health care costs as low as possible for our associates."

Barbara Andridge, who works at the Wal-Mart in Placerville, California, decided to drop out of a Wal-Mart plan provided for the retailer by a health management organization when she found out that the cost was set to nearly double to $60 a month.

"Sixty dollars isn't a lot to some people but when I have to think about buying winter clothes for my kids or sending my daughter to college I have to think of what is best for my children," she said. "Hopefully I'm making the right decision."

Andridge, who makes $12.05 an hour and said her husband was laid off this year, knows that she would have had to pay the same $60 monthly premium no matter how many hours she worked.

"Living paycheck to paycheck, I made the decision to swallow my pride and go and get county health," she said in reference to Medi-Cal, California's Medicaid health care program.

Wal-Mart has been touting its efforts to improve healthcare for its employees, including its October announcement that it would cover all costs, including travel, for costly, complicated heart and spine surgery at the six centers.

Nearly two-thirds of Wal-Mart employees sign up to cover only themselves. Rates covering individuals will rise $2 to $11 per paycheck, or 13 percent to 23 percent, according to documents viewed by Reuters. When plans covering families are included, rates rise anywhere from 8 to 36 percent.

Wal-Mart does offer some plans with premiums that are well below the national average.

Wal-Mart's lowest-cost and most popular associate-only medical plan will cost $17.40 per two-week pay period in 2013, up $2 from 2012. Costs for a single non-tobacco-using employee range from that to $59.30 per paycheck for 2013 (or $34.80 to $118.60 every four weeks).

According to the Kaiser Family Foundation's 2012 survey, the average monthly U.S. worker contribution this year was $79 per month for single coverage.

U.S. premiums are expected to rise 6.3 percent on average in 2013, human resources firm Aon Hewitt said in October, but premiums are just part of the costs story.

Newly hired part-time employees at Wal-Mart will have to work a minimum of 30 hours a week, up from 24 hours previously, before they qualify for coverage. The Affordable Care Act only requires larger employers to provide coverage for their staff who work at least 30 hours per week.

Other changes to Wal-Mart's 2013 plans, such as raising premiums, would have happened regardless of health reform, as it tries to control rising healthcare costs, the company said.

Harris and Andridge, who are dropping their coverage, are part of a group called OUR Walmart. Higher healthcare costs are one of the issues the group wants Wal-Mart to address, along with concerns such as wages and scheduling.

"Even if the plan only went up, let's say 50 cents, when you're barely making it every literal cent counts," said Harris.

OUR Walmart, which is not a labor union, is backed by the United Food and Commercial Workers International union, which represents workers at major grocery chains that compete with Wal-Mart. Members of OUR Walmart pay the organization dues of $5 per month.

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By Mary Agnes Carey and Jenny Gold, Kaiser Health News

Now that President Barack Obama has won a second term, the Affordable Care Act is back on a fast track.

Some analysts argue that there could be modifications to reduce federal spending as part of a broader deficit deal; for now, this is just speculation. What is clear is that the law will have sweeping ramifications for consumers, state officials, employers and health care providers, including hospitals and doctors.

While some of the key features don't kick in until 2014, the law has already altered the health care industry and established a number of consumer benefits.

Here's a primer on parts of the law already up and running, what's to come and ways that provisions could still be altered.

I don't have health insurance. Under the law, will I have to buy it and what happens if I don’t?

Today, you are not required to have health insurance. But beginning in 2014, most people will have to have it or pay a fine. For individuals, the penalty would start at $95 a year, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016.

For families the penalty would be $2,085 or 2.5 percent of household income, whichever is greater. The requirement to have coverage can be waived for several reasons, including financial hardship or religious beliefs.

Millions of additional people will qualify for Medicaid or federal subsidies to buy insurance under the law.

While some states, including most recently Alabama, Wyoming and Montana, have passed laws to block the requirement to carry health insurance, those provisions do not override federal law.

I get my health coverage at work and want to keep my current plan. Will I be able to do that? How will my plan be affected by the health law?

If you get insurance through your job, it is likely to stay that way. But, just as before the law was passed, your employer is not obligated to keep the current plan and may change premiums, deductibles, co-pays and network coverage.

You may have seen some law-related changes already. For example, most plans now ban lifetime coverage limits and include a guarantee that an adult child up to age 26 who can't get health insurance at a job can stay on her parents' health plan.

What other parts of the law are now in place?

You are likely to be eligible for preventive services with no out-of-pocket costs, such as breast cancer screenings and cholesterol tests.

Health plans can't cancel your coverage once you get sick – a practice known as "rescission" – unless you committed fraud when you applied for coverage.

Children with pre-existing conditions cannot be denied coverage. This will apply to adults in 2014.

Insurers will have to provide rebates to consumers if they spend less than 80 to 85 percent of premium dollars on medical care.

Some existing plans, if they haven't changed significantly since passage of the law, do not have to abide by certain parts of the law. For example, these "grandfathered" plans can still charge beneficiaries part of the cost of preventive services.

If you're currently in one of these plans, and your employer makes significant changes, such as raising your out-of-pocket costs, the plan would then have to abide by all aspects of the health law.

I want health insurance but I can’t afford it. What will I do?

Depending on your income, you might be eligible for Medicaid. Currently, in most states nonelderly adults without minor children don't qualify for Medicaid. But beginning in 2014, the federal government is offering to pay the cost of an expansion in the programs so that anyone with an income at or lower than 133 percent of the federal poverty level, (which based on current guidelines would be $14,856 for an individual or $30,656 for a family of four) will be eligible for Medicaid.

The Supreme Court, however, ruled in June that states cannot be forced to make that change. Republican governors in several states have said that they will refuse the expansion, though that may change now that Obama has been re-elected.

What if I make too much money for Medicaid but still can't afford to buy insurance?

You might be eligible for government subsidies to help you pay for private insurance sold in the state-based insurance marketplaces, called exchanges, slated to begin operation in 2014. Exchanges will sell insurance plans to individuals and small businesses.

These premium subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, or $14,856 to $44,680 for individuals and $30,656 to $92,200 for a family of four (based on current guidelines).

Will it be easier for me to get coverage even if I have health problems?

Insurers will be barred from rejecting applicants based on health status once the exchanges are operating in 2014.

I own a small business. Will I have to buy health insurance for my workers?

No employer is required to provide insurance. But starting in 2014, businesses with 50 or more employees that don't provide health care coverage and have at least one full-time worker who receives subsidized coverage in the health insurance exchange will have to pay a fee of $2,000 per full-time employee. The firm's first 30 workers would be excluded from the fee.

However, firms with 50 or fewer people won't face any penalties.

In addition, if you own a small business, the health law offers a tax credit to help cover the cost. Employers with 25 or fewer full-time workers who earn an average yearly salary of $50,000 or less today can get tax credits of up 35 percent of the cost of premiums. The credit increases to 50 percent in 2014.

I'm over 65. How does the legislation affect seniors?

The law is narrowing a gap in the Medicare Part D prescription drug plan known as the "doughnut hole." That's when seniors who have paid a certain initial amount in prescription costs have to pay for all of their drug costs until they spend a total of $4,700 for the year. Then the plan coverage begins again.

That coverage gap will be closed entirely by 2020. Seniors will still be responsible for 25 percent of their prescription drug costs. So far, 5.6 million seniors have saved $4.8 billion on prescription drugs, according to the Department of Health and Human Services.

The law also expanded Medicare's coverage of preventive services, such as screenings for colon, prostate and breast cancer, which are now free to beneficiaries. Medicare will also pay for an annual wellness visit to the doctor. HHS reports that during the first nine months of 2012, more than 20.7 million Medicare beneficiaries have received preventive services at no cost.

The health law reduced the federal government's payments to Medicare Advantage plans, run by private insurers as an alternative to the traditional Medicare. Medicare Advantage costs more per beneficiary than traditional Medicare. Critics of those payment cuts say that could mean the private plans may not offer many extra benefits, such as free eyeglasses, hearing aids and gym memberships, that they now provide.

Will I have to pay more for my health care because of the law?

No one knows for sure. Even supporters of the law acknowledge its steps to control health costs, such as incentives to coordinate care better, may take a while to show significant savings. Opponents say the law’s additional coverage requirements will make health insurance more expensive for individuals and for the government.

That said, there are some new taxes and fees. For example, starting in 2013, individuals with earnings above $200,000 and married couples making more than $250,000 will pay a Medicare payroll tax of 2.35 percent, up from the current 1.45 percent, on income over those thresholds. In addition, higher-income people will be taxed 3.8 percent on unearned income, such as dividends and interest.

Starting in 2018, the law also will impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year and $27,500 for families. The tax has been dubbed a "Cadillac" tax because it hits the most generous plans.

In addition, the law also imposes taxes and fees on several major health industries. Beginning in 2013, medical device manufacturers and importers must pay a 2.3 percent tax on the sale of any taxable medical device to raise $29 billion over 10 years. An annual fee for health insurers is expected to raise more than $100 billion over 10 years, while a fee for brand name drugs will bring in another $34 billion.

Those fees will likely be passed onto consumers in the form of higher premiums.

Hasn't the law hit some bumps in the road?

Yes. For example, the law created high-risk insurance pools to help people buy health insurance. But enrollment in the pools has been less than expected. As of Aug. 31, 86,072 people had signed up for the high-risk pools, but the program, which began in June 2010, was initially expected to enroll between 200,000 and  400,000 people. The cost and the requirements have been difficult for some to meet.

Applicants must be uninsured for six months because of a pre-existing medical condition before they can join a pool. And because participants are sicker than the general population, the premiums are higher.

Enrollment has increased since the summer, after the premiums were lowered in some states by as much as 40 percent and some states stepped up advertising.

A long-term care provision of the law is dead for now. The Community Living Assistance Services and Supports program (CLASS Act) was designed for people to buy federally guaranteed insurance that would have helped consumers eventually cover some long-term-care costs. But last fall, federal officials effectively suspended the program even before it was to begin, saying they could not find a way to make it work financially.

Are there more changes ahead for the law?

Some observers think there could be pressure in Congress to make some changes to the law as a larger package to reduce the deficit. Among those options is scaling back the subsidies that help low-income Americans buy health insurance coverage. The amount of the subsidies, and possibly the Medicaid expansion as well, could be reduced. 

It’s also possible that some of the taxes on the health care industry, which help pay for the new benefits in the health law, could be rolled back. For example, legislation to repeal the tax on medical device manufacturers passed the House with support from 37 Democrats (it is not expected to receive Senate consideration this year). Nine House Democrats are co-sponsoring legislation to repeal the law’s annual fee on health insurers.

Meanwhile, the Independent Payment Advisory Board (IPAB), one of the most contentious provisions of the health law, is also under continued attack by lawmakers. IPAB is a 15-member panel charged with making recommendations to reduce Medicare spending if the amount the government spends grows beyond a target rate. If Congress chooses not to accept the recommendations, lawmakers must pass alternative cuts of the same size.

Some Republicans argue that the board amounts to health care rationing and some Democrats have said that they think the panel would transfer power that belongs on Capitol Hill to the executive branch. In March, the House voted to repeal IPAB but that bill did not get past the Senate.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.

One of the biggest winners Tuesday night was health reform. Now that President Barack Obama has won a second term and kept a Democratic majority in the Senate to back him up, Republicans have lost any chance at repealing his biggest domestic initiative.

“Health reform goes ahead,” Timothy Jost, an expert on health law at Washington and Lee University, told NBC news. “It has survived two near-death experiences, with the Supreme Court decision (in June) and now with the election. Now it is time to move forward.”

For most Americans who get their health insurance through their employers, that could mean some significant changes as they are asked to make more and more of their own decisions about how coverage they want.

Republican analysts agree. “What it means is implementation of the law,” said Christopher Condeluci, a former Tax and Benefits Counsel to the Senate Finance Committee who is now at Washington law firm Venable LLP.

It doesn’t mean smooth sailing, however. Many rules have yet to be rolled out – and there is little time to do that before the law begins to take full effect in 2014.

Much of the law’s implementation is up to the states. And Republicans still control the House, which means they hold the initiative on setting the budget. As they’ve done over the past four years, they can hold the budget hostage. And this year the administration and Congress will have to negotiate on an especially tricky budget issue – the fiscal cliff.

Now that he's won, the six splitting headaches waiting for Obama

Unless Congress makes a budget deal fast, $600 billion in tax increases and spending cuts - known as the fiscal cliff – go into effect in January. Some of the money used to fund the health care law will undoubtedly be on the table for the last-minute bargaining. The Congressional Budget Office has projected the law will cost about $1.2 billion over 10 years.

“I would expect that Republicans are going to push pretty hard to get some money out of the Affordable Care Act,” Jost said. “There is a lot of money there,” Condeluci agreed.

Some parts supposedly cannot be touched – the money to be used to subsidize health insurance for people who want to buy it on the new marker provided by health insurance exchanges, for instance. People who earn up to 400 percent of the federal poverty level, or about $92,000 for a family of four, would be able to get a subsidy and conservatives may want to bargain against some of this money to try and cut the federal deficit.

And the federal government has promised to pay the full cost of expanding Medicaid in the states for the first few years. It’s not clear how much this will cost until states choose what to do. The Supreme Court ruling that upheld the health care law in June made it clear that states get to decide whether they’ll offer Medicaid to more people. Congress may want to try to negotiate against that money, also.

But Harry Conaway, who heads the Washington office of consulting group Mercer, notes that budget projections show the Affordable Care Act will save money over 10 years, so it may be risky to play with it too much.

Victorious Obama 'more determined' in face of challenges

States that have refused to set up their own health insurance exchanges can expect the federal government to do it for them. But it now has just under a year to get that done.

“The administration has a mountain to climb,” Condeluci said. “There are a lot of rules that it appears that they slow-walked until after the election. I understand why they did slow-walk those rules. Those rules are related to some very, very important parts of this law.”

One rule everyone is waiting for is the so-called essential benefits package -- the list of minimum requirements for plans to cover.

Condeluci worries that the process will be rushed now, which may not allow for proper consideration of public comments on administration proposals.

“We haven’t seen the rules on the federally facilitated (health insurance) exchange. We don’t even know if will be up and running by open enrollment, which is October 2013,” Condeluci said.

Conaway thinks the administration may have to delay some of the deadlines. "The Obama administration will have to make an assessment later this year or early next year about whether a 2014 implementation will go smoothly or be chaotic and disruptive," he said.

Slideshow: Election 2012

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Campaigning with Mitt Romney and Barack Obama, voting and election results.

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What it means for you

Mercer's Tracy Watts says employers are already beginning to make changes to what they offer workers. "Over the next several years everybody will continue to see changes to their benefits," she said. More people may see bare-bones plans, because of changes in the rules about how much employers have to cover.

The 2010 health care law actually lowers the average actuarial value for a plan -- the percentage of the total bill that an employer has to cover. On average, a health insurance plan now pays for about 85 percent of the costs, with the patient making up 15 percent. The health reform law says plans only have to pay 60 percent -- meaning some people may end up being on the hook for 40 percent of their costs with a new, slimmed-down plan.

"Let's say  you have an outpatient procedure that costs $3,000," Watts said. A new-style plan might require a $2,000 deductible and 50 percent co-insurance, meaning the patient has to pay $2,500 for the procedure and the employer picks up $500. But, she adds, employees will have the option to add better coverage a la carte. The difference is the employers will no longer simply offer a single package -- people will have to work out what particular pieces of coverage they want, and pay a little more each month for the extras.

Watts says Mercer's surveys show that 90 percent of employers who currently offer health insurance to their workers will continue to do so.

Another Supreme Court challenge?
Rules that insurers are waiting to see include the community rating requirements — these are the different premiums that insurers may charge people based on their sex, age and health status. For instance, the law aims to stop the common practice of insurers charging women more than they charge men of similar age and health status. But they will be able to charge people higher premiums as they get older, and just how much more needs to be laid out.

There’s also the guaranteed issue rule – this will require insurers to cover people even if they have existing health conditions. Again, this isn’t detailed yet.

And then there are the states. Many Republican governors are already resisting some of the most important aspects of healthcare reform, such as expanding Medicaid to cover people who can’t easily get health insurance any other way.

“At this point it really comes down to the states,” Condeluci said. “The biggest bogey out there is what the states are going to do. We could have a situation where states continue to resist implementing the law.’

That, Condeluci predicts, could even create another Supreme Court challenge to the law.

“Dare I say it -- if their resistance continues, we will have a federalism issue where a federal law is essentially telling a state to do something and the state is saying ‘no’ to that federal law. Arguably, that would have to be decided by the Supreme Court.”

Jost is a little more hopeful. “I think we will see states move toward a more cooperative and less confrontational relationship,” he said. “One hopes that at some time, people are going to act practically rather than ideologically.”

There could also still be friction over the law’s requirements that insurers and employers provide birth control coverage free of charge to women. Conservative employers continue to challenge the requirement in court.

Lisa Maatz, policy director for the American Association of University Women, thinks that issue galvanized many women voters – especially when some conservatives framed the issue as one of religious freedom as opposed to women’s health.

“The conversation itself was not only disheartening, but it also shook women down to their toes,” Maatz told NBC News. “It was an eye-opener for younger women who never believed such rights could be taken away, and a galvanizer for older women as well.”

Related links:

• State elections key to health reform
• Free birth control starts under health care law
• Who falls through the cracks when states don't expand Medicaid
• Much left to do on health reform
• Supreme Court upholds health care law

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More Americans got health insurance coverage in 2011 as young adults jumped onto their parent’s health insurance plans, the U.S. government said Wednesday. More people also got public health insurance under the Medicare and Medicaid programs.

The number of people going without health insurance fell, from around 50 million in 2010 to 48.6 million in 2011, the Census Bureau’s David Johnson said. In 2010, 16.3 percent of the population went without health insurance. In 2011, that fell to 15.7 percent of the population, the Census said in its latest report on poverty, employment and health insurance.

One of the main goals of the 2010 health reform was to get more people covered by health insurance, but most of the provisions meant to do that don’t kick in until 2014. One of the most popular requirements did, however –  the requirement that health insurance companies let parents keep their adult children on their plans until they’re 26. Johnson said the numbers show 500,000 young adults took advantage of that.

“You can see a lot of the fall is due to the 19-25 year-old age group,” Johnson told reporters on a conference call. “We also see a large increase in coverage for public coverage. I think those two things are driving the uninsured rate falling.”

About a million more people got coverage under Medicare, Medicaid, the Children’s Health Insurance Program (CHIP) and military health care, the report shows.

The Census report suggests that people stopped losing health insurance because they lost their jobs – the report shows more people were working full-time in 2011, compared to 2010.

“This is the first time in the last 10 years that the rate of pri­vate insurance coverage has not decreased,” Johnson said. As has been the case for years, most Americans are covered by a private plan -- about 55 percent were in 2011.

Liberal groups said the data showed that fears health care reform would cause employers to stop offering health care coverage are unfounded.

"In fact, the law has expanded coverage, even as we are still recovering from an economic downturn," said Neera Tanden, a former adviser to the Obama administration who is now president of the Center for American Progress. "These numbers also underscore just how important it is to move forward with implementation of the rest of the law, especially Medicaid expansion which will cover millions of low-income Americans."

Looking at the numbers another way, 260.2 million people had health insurance in 2011, up from 256.6 million in 2010.

Even critics of the administration said the numbers were good news. Devon Herrick of the National Center for Policy Analysis said 30 million Americans would remain without health insurance even after the Affordable Care Act is fully implemented.

"This is largely because the penalties for forgoing health coverage are less than the cost of coverage," Herrick said in a statement.

"Moreover, maybe up to one-third of businesses will find it to their advantage to drop the employee health plan once their workers have access to subsidized coverage in the state Health Insurance Exchanges. Another unintended consequence of the ACA is that many people will quite rationally wait until they become sick to enroll in health coverage due to new federal regulations that require insurers to accept all applicants regardless of health status.” 

Many studies show that people who go without health insurance have poorer health in general. They go without regular checkups and wait until there’s an emergency, such as a heart attack or a stroke, to get medical care. This ends up costing everybody more, because it’s far more expensive to treat someone for a heart attack, for instance, than to see them early and prescribe cholesterol or blood-pressure drugs.

Physicians for a National Health Program, a group that advocates for universal health insurance, says the Census numbers show 48,000 Americans died needlessly in 2011.

"The estimated death toll is based on a peer-reviewed Harvard study published in the American Journal of Public Health in 2009, widely cited during the health reform debate, which found that for every 1 million persons who were uninsured there were about 1,000 related, preventable deaths," the group said in a statement.

 “We should adopt a zero-tolerance policy toward lack of health coverage,” the group's Dr. Steffie Woolhandler said. “Today’s Census Bureau report underscores the urgency of going beyond the federal health law and swiftly implementing a single-payer, improved-Medicare-for-all program."

Related links:

Supreme Court ruling leaves the poorest at risk of losing health insurance

Workers opt out of company health plans

The health care law's insurance rebate

If banking were like health care, it would take days to get money out of an ATM because the records would be lost. If airlines were like health care, pilots would decide on their own which safety checks to make, if any. If shopping were like health care -- well, you get the picture.

It’s a mess, the Institute of Medicine says in a report released on Thursday. The U.S. health care system wasted $750 billion in 2009, about 30 percent of all health spending, on unnecessary services, excessive administrative costs, fraud, and other problems. As many as 75,000 people who died in 2005 would have lived if they got the kind of care provided in the states with the best medical systems, the Institute found.

The report, issued just as candidates for Congress and for president make health care reform a central part of the national debate, doesn’t pull any punches. The panel of experts assembled by the Institute, an independent body that is supposed to provide a non-partisan last word on important issues, leaves no doubt that U.S. health care now is anything but the best in the world.

"The threats to Americans' health and economic security are clear and compelling, and it's time to get all hands on deck," says Mark Smith, president and CEO of the California HealthCare Foundation in Oakland and chairman of the panel.

"Our health care system lags in its ability to adapt, affordably meet patients' needs, and consistently achieve better outcomes."

But there's hope. "We have the know-how and technology to make substantial improvement on costs and quality. Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value," Smith says.

“What I am seeing around the country is that people are absolutely committed to reform,” says James Conway of the Harvard School of Public Health and the Institute for Healthcare Improvement in Massachusetts, who served on the panel.

“Whether you look at the Republican platform or the Democratic platform, you find in pretty strong language the importance of developing a high quality health care system.”

One of the biggest problems is that health insurers, hospitals and health systems don’t learn from their mistakes, the report says. Half of all health care professionals still neglect to wash their hands properly before seeing patients, even though it’s one of the main causes of infections that kill tens of thousands of patients every year.

An organized system that finds out what went wrong and where, and then provides for the health system to correct those mistakes right away would save money and lives. It’s possible in a computerized world, but it’s not happening on a systematic basis. Hospitals that report every single infection and ruthlessly track down where it came from have found they can cut infection rates to zero, for instance.

Yet just this week the Centers for Disease Control and Prevention reported that a third of Americans have high blood pressure and only half of them have it under control. There are dozens of drugs to treat it, not to mention diet and exercise methods. It took 13 years for one of those drug types, the beta-blockers, to become the standard of care even after they had been clearly demonstrated to work, the report says.

What’s missing, the report says, is coordination. “What I see is people doing a little bit of this and a little bit of that. Everyone has their little initiative. And back at the ranch, the doctor, the individual provider, is drowning in the sea of initiatives,” Conway says. “What is missing is a much more systemic and collective response.”

The report points to two main problems. “One is the increasingly unmanageable complexity of the science of health care. During the past half-century, there has been an explosion of biomedical and clinical knowledge, with even more dazzling clinical capabilities just over the horizon,” the report says. But the current system doesn’t help providers learn this material and it doesn’t give them any incentive to apply it.

“Second is the ever-escalating cost of care, which is widely acknowledged to be wasteful and unsustainable. Unless ways are found to provide more efficient, lower-cost health care, more and more Americans will lose coverage of and access to care.”

Conway praises the Massachusetts health care system, which he says is organized with the patient in mind. The report also says government initiatives, such as the Patient-Centered Outcomes Research Institute (PCORI) and the Center for Medicare & Medicaid Services Innovation Center are good ways to test and apply proven treatments and methods for paying for health care.

“Until we organize the health care system around the people we are privileged to serve, we aren’t going to figure it out,” Conway said.  “I don’t think we have done that before -- we haven’t organized it around the person with cancer. That would be a remarkable change.”

Some ways to get there? Let people see what various treatments cost up front. Employers, who cover the health care costs of 55 percent of Americans, can help, too, the report says. They can use their buying power to demand high-quality, high-value health care, and get their employees involved in wellness programs.

So what would happen if shopping were like U.S. health care? "Product prices would not be posted, and the price charged would vary widely within the same store, depending on the source of payment,” the report says.

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So you think the Supreme Court upheld a law that requires most people to buy health insurance? That's only part of it. The measure's hundreds of pages touch on a variety of issues and initiatives that have, for the most part, remained under the public's radar. Here's a sampling:  

Postpartum Depression (Sec. 2952)
Urges the National Institute of Mental Health to conduct a multi-year study into the causes and effects of postpartum depression. It authorized $3 million in 2010 and such sums as necessary in 2011 and 2012 to provide services to women at risk of postpartum depression.

Abstinence Education (Sec. 2954)
Reauthorizes funding through 2014 for states to provide abstinence-only sex education programs that teach students abstinence is "the only certain way to avoid out-of-wedlock pregnancy, sexually transmitted diseases, and other associated health problems." Federal funding for these programs expired in 2003.

Power-Driven Wheelchairs (Sec. 3136)
Revises Medicare payment levels for power-driven wheelchairs and makes it so that only "complex" and "rehabilitative" wheelchairs can be purchased; all others must be rented.

Oral Health Care (Sec. 4102)
Instructs the Centers for Disease Control and Prevention to embark on a five-year national public education campaign to promote oral health care measures such as "community water fluoridation and dental sealants."

Privacy Breaks for Nursing Mothers (Sec. 4207)
Requires employers with 50 or more employees to provide a private location at their worksites where nursing mothers "can express breast milk." Employers must also provide employees with "a reasonable break time" to do this, though employers are not required to pay their employees during these nursing breaks.

Transparency on Drug Samples (Sec. 6004)
Requires pharmaceutical manufacturers that provide doctors or hospitals with samples of their drugs to submit to the Department of Health and Human Services the names and addresses of the providers that requested the samples, as well as the amount of drugs they received. 

Face-to-Face Encounters (Sec. 6407)
Changes eligibility for home health services and durable medical equipment, requiring Medicare beneficiaries to have a "face-to-face" encounter with their physician or a similarly qualified individual within six months of when the health professional writes the order for such services or equipment.

Diabetes & Death Certificates (Sec. 10407)
Directs the CDC and the HHS Secretary to encourage states to adopt new standards for issuing death certificates that include information about whether the deceased had diabetes.

Breast Cancer Awareness (Sec. 10413)
Instructs the CDC to conduct an education campaign to raise young women's awareness regarding "the occurrence of breast cancer and the general and specific risk factors in women who may be at high risk for breast cancer based on familial, racial, ethnic, and cultural backgrounds such as Ashkenazi Jewish populations."

Assisted Suicide (Sec. 1553)
Forbids the federal government or anyone receiving federal health funds from discriminating against any health care entity that won't provide an "item or service furnished for the purpose of causing … the death of any individual, such as by assisted suicide, euthanasia, or mercy killing."

Reprinted with permission from Kaiser Health News