As expected, the U.S. Senate passed its own version of health care insurance reform over the holidays. With both houses of Congress now committed to changing the way health insurance policies will be written in the future, the new year is shaping up as the most pivotal year for health insurance since the introduction of Medicare and Medicaid two generations ago.

The two health insurance bills produced by Congress must be reconciled into one, so the final form of the health insurance legislation remains a mystery—a strange situation given that the people paying for the reforms have not been told how much it will cost them. Here is what we know so far:

• Every person not covered by an existing health insurance program—Medicare, Medicaid, or veterans benefits—will be required to have private health insurance of some kind. Those who do not get coverage through their employer will be required to buy it individually.

• Tax credits for purchasing health insurance will be provided for people earning up to 400 percent of the federal poverty level—about $88,000 for a family of four.

• Those who do not obtain private health insurance will face penalties—fines at least and possibly incarceration. Initially the fines may be small—as little as $95 per person for the first year (2014), growing to $750 per person per year.

• Uninsured people, self-employed individuals, and small businesses  may be able to purchase insurance from statewide exchanges that may be operated by private insurance companies on a not-for-profit basis or possibly run by the government (the “public option”).

• Large employers (50+ employees) will be required to provide health insurance for employees or face fines.

• The IRS will be responsible for tracking who has insurance and who does not, and it will have the power to levy fines, just as it has the power to seize bank accounts and other assets for unpaid taxes.

• Insurance companies will not be able to delay or deny coverage for anyone, regardless of their physical condition.

• Insurance companies will not be able to charge higher premiums for preexisting conditions.

• Insurance companies will not be able to charge higher premiums based on gender.

• Insurance companies will be limited in the amounts they can charge based on age.

• Insurance companies will not be able to cap benefits for policyholders.

What all this will mean is open to debate. Supporters of the bills believe that the number of people without health insurance will shrink from the current 17 percent of the population to 11 percent, leaving 24 million people uninsured. This assumes that the $95 penalty for an individual who does not get health insurance in 2014 will cause millions to get insurance—a doubtful proposition at best. It also assumes that large companies that do not offer health insurance will be induced to do so based on a $750 penalty per employee—also questionable.

It also assumes the private health insurers will find a way to stay in business despite the fact that the various government mandates violate the actuarial science that is the foundation of private health insurance. In other words, insurance companies will be forced to pay out massive benefits to the terminally ill, those with chronic diseases, the older population, and pregnant women (including those with complicating health issues), yet will not be able to charge the at-risk groups the proportional amounts needed to pay for these skyrocketing benefits.

None of this takes effect until 2014, so the best thing for everyone to do is to continue buy private health insurance for the next four years at least. In the mean time, there will be two election cycles and four sessions of Congress to address the shortcomings of health insurance reform legislation.