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Obama signs health care 'fixes' bill

By the CNN Wire Staff
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Final piece of health reform
  • NEW: Obama emphasizes student loan provisions while signing "fixes" bill
  • The bill received final legislative approval Thursday in a 220-207 vote
  • "Fixes" bill expands health insurance subsidies for lower- and middle-income families
  • Republicans vow to use "repeal and replace" slogan in congressional campaigns

Washington (CNN) -- President Obama sealed a final victory on his signature domestic priority Tuesday, signing a sweeping package of changes to the newly enacted health care reform law.

The so-called "fixes" bill -- approved over unanimous Republican opposition in both chambers of Congress -- significantly expands health insurance subsidies for lower- and middle-income families while watering down a tax on expensive health policies.

The measure also overhauls the national college student loan system by shifting government funding for loans away from commercial banks to new education initiatives. Until now, commercial banks have received federal subsidies to provide student loans.

The bill increases the overall cost of the health care reform legislation to $940 billion over the next 10 years, $65 billion more than the original health care bill Obama signed into law last week.

What will health reform mean for you?

The president emphasized the student loan reforms at a signing ceremony at Northern Virginia Community College in Alexandria, Virginia.

The passage of the bill represents the end of a battle "pitting the interests of the banks [and] the financial institutions against the interests of students," Obama said.

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It fixed an old "sweetheart deal" by cutting out "unnecessary middlemen" in the administration of college loans, he asserted. "We stood with America's students."

Changing the law, Obama said, will free up nearly $68 billion for both college loans and deficit reduction. As a result, the White House claimed, another $40 billion will be funneled into Pell Grants over the next decade. New borrowers taking out loans starting in July 2014 will be able to cap their student loan repayments at 10 percent of their discretionary income.

The balance of their loans will be forgiven after 20 years if they keep up with their payments over time.

Congressional Republicans bitterly criticized the Democrats' decision to attach the student loan overhaul to the health care bill, arguing in part that each measure deserved a separate debate. They have also argued the larger health care reform plan will lead to a government takeover of the private health insurance system, and charge that it will result in deep cuts in critical Medicare services while doing little to control skyrocketing medical costs.

Democrats contend that the plan, which is estimated to extend health coverage to 32 million Americans, will reduce future federal budget deficits while giving consumers greater leverage with private insurers. Obama repeatedly slammed large insurance companies in the waning days of the health care debate, framing the politically polarized dispute as a face-off between the powerful corporations and ordinary Americans.

The congressional wrangling over the plan, which included months of late-night votes and caustic floor debate, reflected the country's deep political divide over health care reform. Polls show the American public remains sharply divided over the issue. Forty-seven percent of Americans believe Congress should repeal the current reform law and replace it with new proposals, according to a March 25-28 CNN/Opinion Research Corporation poll. Fifty percent are opposed to doing so.

Conservative activists -- including Tea Party protesters -- have continued to hold rallies against the legislation.

Senate Minority Leader Mitch McConnell, R-Kentucky, has promised that Republicans will use the slogan "repeal and replace" with regard to the health care law in the upcoming midterm elections.

Texas GOP Sen. John Cornyn, who is in charge of the 2010 Republican Senate campaign effort, outlined key GOP health care talking points Tuesday in a new memo, "Moving Forward," that was sent to several media outlets, including CNN.

"It's critical that we remind people of the fact that it was Republicans who fought to force insurance companies to compete with one another over state lines for Americans' business," Cornyn wrote in the memo.

"It was Republicans who fought to reform the junk lawsuits that raise medical costs and lower quality by forcing doctors to practice [defensive] 'medicine.' ... It was Republicans who proposed health care reforms that didn't cut Medicare by $500 billion and raise Americans' taxes by $400 million."

Given Democratic control of the White House and Congress, outright repeal of the legislation is considered unlikely. House Speaker Nancy Pelosi, D-California, questioned the Republicans' political strategy at a rally in San Francisco on Monday, noting it would require GOP candidates to favor ending popular benefits in the legislation -- such as preventing insurance companies from denying coverage due to pre-existing medical conditions.

"They want to reverse and repeal a prohibition on denying care on the basis of a pre-existing condition," Pelosi said Monday. "Can you imagine making that case?"

Congress initially appeared poised to pass a compromise reform bill in January or February, shortly after both the House and Senate approved their own versions of the measure. However, the political landscape shifted in January when Republican Scott Brown won a special election in Massachusetts to fill the Senate seat formerly held by Democrat Ted Kennedy, the longtime champion of health care reform, who died last year.

Brown's victory cost Senate Democrats the 60-seat majority they needed to overcome a Republican filibuster against a compromise health care bill. In response, Democrats devised a two-bill process in which the House passed the Senate version unchanged, making it law when signed last week by Obama, and also passed the accompanying "fixes" bill to change provisions in the Senate legislation that some House members opposed.

The "fixes" bill was then proposed under reconciliation rules in the Senate that apply to bills involving the budget. Such bills need only a simple majority of 51 votes to pass.

Specific provisions in the "fixes" bill include:

• Closing the Medicare prescription drug "doughnut hole" by 2020. Under current law, Medicare stops covering drug costs after a plan and beneficiary have spent more than $2,830 on prescription drugs. It starts paying again after an individual's out-of-pocket expenses exceed $4,550. Senior citizens stuck in the doughnut hole this year will receive $250 rebates.

• Raising the threshold for imposing the "Cadillac" tax on expensive health insurance plans to coverage valued at more than $10,200 for individuals and $27,500 for families. The tax won't kick in until 2018.

• Imposing an additional 3.8 percent Medicare payroll tax on investment income for individuals making more than $200,000 a year and couples making more than $250,000 a year.

• Eliminating the "Cornhusker Kickback," which gave Nebraska a special exemption from all new Medicaid expenses. The federal government will instead assist every state by picking up 100 percent of the costs of expanded Medicaid coverage between 2014 and 2016, and 90 percent starting in 2020.

• Reducing the fine for individuals who fail to purchase coverage from $750 to $695.

• Increasing the fine on large companies failing to provide health coverage for workers from $750 to $2,000 per employee.

CNN's Alan Silverleib and Tom Cohen contributed to this story.