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Wednesday is the first birthday of the Patient Protection and Affordable Care Act, the law better known as health-care reform. Cake, I imagine, will not be served. As much as Democrats are trying to leverage the milestone to sell the public on the legislation’s many virtues, the reality is that it has been a tough year.

At best, public support for the law is mixed and contradictory. A Kaiser Family Foundation survey released last week was typical: A slight plurality had an unfavorable impression of it, but a slight majority opposed efforts to repeal it or replace it with a Republican-backed alternative. It brings to mind an old Woody Allen joke about a restaurant where the food is terrible and the portions are too small. Americans don’t think they like the Affordable Care Act, but they don’t want to be without it or left with whatever Republicans want to put in its place.

For most Americans, the dominant emotion is confusion. According to the Kaiser poll, “confused” outranks “angry,” “anxious” and “enthusiastic” as a descriptor. At 53 percent, it commands an easy majority — and I’d guess that’s a low estimate.

So this is my birthday present to the legislation, and those who are befuddled by it: some clarity on what it does, and how it does it.

The health-care reform law is, without a doubt, among the most consequential pieces of social policy passed since the Great Society. But it’s also a lot more incremental than many people realize. More modest, by far, than the health-care overhauls proposed by Presidents Clinton, Nixon, Johnson and Truman.

In 2019, once the law has been fully implemented for five years, it is expected to cover about two-thirds of the uninsured, to cost about 4 percent of what the health-care system spends in any given year and to cut the federal deficit by less than 1 percent. If you obtain insurance from your employer, Medicare, Medicaid or the veterans system — and that describes most Americans — you probably won’t notice the legislation at all.

Nevertheless, the Affordable Care Act, once it kicks in fully in 2014, is expected to do four things: provide coverage; remake a small slice of the private insurance market; pay for itself; and try to control costs. Let’s take them in order.

The law has two main mechanisms for covering people: Medicaid — which is a government insurance program that focuses on the poor — and subsidies to help people afford private insurance. The split is expected to be almost even: Of the 32 million people the law is expected to cover by 2019, 16 million will be on Medicaid and the rest covered by private insurance.

The problem with subsidizing insurance is that the sick rush to sign up and the insurers refuse to cover them. The law escapes this conundrum by telling people who can afford insurance that they have to buy it or face a small fine (the dreaded individual mandate) and by telling insurers that they can’t discriminate based on preexisting conditions. That is to say, healthy people can no longer say no until they get sick and insurers can no longer say yes only when applicants are healthy.

These transactions will happen on the new “exchanges” — a place that will, in effect, be a Web site where people can compare plans and choose the one that will serve them best. But behind the pleasing exterior (you can see it at HealthCare.gov), the exchanges offer another layer of consumer protection: Just as Amazon.com would stop carrying a toaster that routinely exploded when customers plugged it in, if an insurer repeatedly misbehaves, regulators can kick it out of the exchange.

All this will cost money — and in a system that’s already overpriced. Which brings us to offsets and cost controls. It’s important to know the difference: Offsets are the policies that cover the law’s costs. They’re concrete, simple reforms — cutting this much, taxing that much — and as long as we are willing to implement them, they are likely to work. Controls are the policies that try to rein in health-care spending. They’re ambitious attempts to change the way doctors are paid, insurance is bought and Medicare is reformed. If they work, they will, in the long run, save an enormous amount of money — much more than the offsets.

The big offsets in the health-care law slow payment increases to doctors who participate in Medicare ($240 billion), cut payments to private insurers that participate in Medicare but cost more than the basic Medicare program does ($140 billion), add a new tax on high-income beneficiaries of Medicare ($210 billion) and on very expensive health-care plans ($20 billion, although much more than that between 2020 and 2029), and so on. All in all, the legislation is expected to save or raise about $100 billion more than it spends in the first 10 years.

The cost controls will occur over a longer period and are more speculative. Medicare, for instance, is going to experiment with paying hospitals a flat sum for all successful care associated with a particular condition. This will mean that doctors make more money when they do less and are successful at it, rather than making more for doing more, as is the case now. The tax on expensive health insurance plans is meant to drive people — and employers — to seek plans that better control costs.

The Independent Payment Advisory Board is a group of stakeholders and experts charged with helping Medicare control costs and empowered to make changes to the system even if Congress is too paralyzed or distracted to act. It will be fed ideas by the new Center for Medicare and Medicaid Innovation, which will test ways to improve care and cut expenses. The exchanges will make it easier to comparison-shop, and the subsidies are linked to the lowest-priced plans in the exchanges to reward cost-efficient insurers. New information about what drugs and treatments work best and for whom will come from trials, and if combined with electronic-medical records, could help doctors make more cost-effective decisions.

Is it a perfect piece of legislation? Not even close. Will everything work as expected? Almost certainly not. But for all its flaws, it’s a good law, which is why Republicans have had so much trouble coming up with state plans that could cover more people at a lower cost. And it’s worth trying.

So happy birthday, Affordable Care Act. Here’s to many more.

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Government-subsidized health insurance – one of many perks of serving in Congress – kicked in on Tuesday for new members.

But a group of more than a dozen freshman Republicans who campaigned vigorously on overturning President Obama’s new health care law will be opting out.

Whether in direct protest of the health care overhaul, which House Republicans voted unanimously to repeal two weeks ago, or in an attempt to retain their Washington-outsider patina, about 15 members declined coverage through the Federal Employees’ Health Benefits Plan, which covers eight million federal employees and their dependents.

Among them were: Representatives Joe Walsh, Republican of Illinois, Richard Nugent of Florida, and Paul Gosar of Arizona, who was a dentist for 25 years and sold his practice to pursue politics.

The federal health care program, established in 1960, gives federal workers a variety of plans to choose from and in this respect, its structure is somewhat similar to that of the health insurance exchanges set to begin in 2014 under the new law.

For months, Democrats have challenged Republican members to forgo their federal insurance to show they are serious about dismantling the legislation. Some Republicans have countered that accepting coverage from the taxpayer-sponsored program makes them just like millions of private citizens who participate in the health insurance offered by their employers.

The symbolism of the decision to opt out of government coverage had drawn Democrats to that choice in the past, for the opposite reason.

Senator Sherrod Brown of Ohio and Representative Joe Courtney of Connecticut, both Democrats, pledged to decline federal health insurance until all Americans have access to health care.

After 18 years on Capitol Hill Mr. Brown, elected in 1992, finally enrolled last year after the new health care law was passed. Mr. Courtney, however, apparently doesn’t think it’s a done deal.

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Congressional Democrats on Wednesday stood with more than 100 jobless workers in an attempt to drum up public outrage after Republicans prevented an extension of federal unemployment benefits for millions of Americans who are out of work. “Has the Republican leadership in Congress lost all sense of justice?” asked Sen. Tom Harkin, D-Iowa. “Where is [...]

The documents released by the Federal Reserve on Wednesday provide new details of how close to the precipice some insurance subsidiaries of the American International Group came in 2008, Mary Williams Walsh reports in The New York Times. They also show just how far Fed officials veered from their usual duties to keep those subsidiaries [...]

The House failed to pass an extension unemployment insurance benefits for another three months Thursday afternoon. The vote was 258 to 154, short of the two-thirds needed for passage.

Republicans have sought to block the extension of benefits before, arguing that the spending should be offset by savings elsewhere.

Representative Steny Hoyer of Maryland, the Democratic majority leader, said his party will continue to push for the extension when lawmakers return on November 29. Without an extension, benefits will expire on November 30.

“Today, Republicans blocked an extension of unemployment insurance for thousands of families who have lost jobs through no fault of their own,’ Mr. Hoyer said. “As a result, they can expect their insurance to begin to run out just after Thanksgiving weekend. Republicans’ opposition to this bill was bad for families across their own districts, and worse for our economy as a whole.”

A spokesman for the incoming House speaker, Representative John Boehner of Ohio, accused Democrats of manipulating an important issue.

“Just two weeks after the election, the Democratic Leadership is playing politics with people’s unemployment benefits,” Michael Steel, Mr. Boehner’s spokesman, told Fox News.

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Brit Insurance Holdings, an insurer based in Amsterdam, said on Tuesday that its board would recommend a cash takeover offer worth up to £888 million made by the private equity firms Apollo Global Management and CVC Capital Partners. The $1.4 billion bid, which values the company at up to £11 a share and includes a [...]