Admittedly, this is a fast-changing story, but here, from the Health Affairs Blog, are the highlights of the new House Bill. The writer is an attorney who has written a book on health law, so it's a trustworthy summary.
- First, the bill would dramatically reform the insurance market, prohibiting pre-existing condition exclusions; eliminating underwriting based on health status, gender or occupation; limiting out-of-pocket expenses; removing lifetime or annual coverage caps; and mandating medical loss ratios. It would also define “essential” benefits that must be covered by insurance plans, improve insurance disclosure and transparency, define marketing standards, and require fair grievance and appeal procedures. This part of the bill closely resembles the Senate bills and is likely to be part of the final legislation.
- Second, the legislation would create a national health insurance exchange through which all new nongroup policies would be sold and through which insurance would also be available for employees of small and perhaps eventually large employers. The exchange is supposed to increase the accountability of health insurers and the transparency of their products as well as reducing costs through increasing competition and limiting administrative costs. The Senate bills also create exchanges, but at the state level. The final legislation is likely to include exchanges, but as will be discussed in my next post, the House version of exchanges is the most ambitious approach.
- Third, the legislation would require employers with payrolls exceeding $500,000 per year to provide health insurance to their insurers or pay a penalty (which does not fully phase in until payroll reaches $750,000). According to House leadership, 86% of American businesses would be exempt from this requirement, though most employees would be covered. The legislation would provide tax credits to small businesses who offer their employees health insurance. The Senate Finance bill has a much weaker mandate, but the final bill is likely to include a mandate of some sort.
- Fourth, individuals would be required to purchase health insurance or pay a tax of 2.5% of their adjusted gross income above the income tax filing threshold up to the cost of an average insurance policy. If insurers are not allowed to underwrite based on health status, healthy as well as unhealthy individuals must be in the market, and this mandate would help drive them into it. For this reason, all of the bills contain an individual mandate and one is likely to be in the final bill, although this is one of the provisions of the bill that evokes the most visceral opposition.
- Fifth, affordability subsidies are available to help lower income individuals and families purchase insurance and to lower their cost sharing obligations. This should lessen the burden of the individual mandate. The subsidies are set at the levels established by the Blue Dog amendments in the Energy and Commerce Committee. On the whole, the premium subsidies are much more generous than those found in the Senate Finance Committee but less generous than those in the HELP bill, while the cost-sharing subsidies are generally more generous than those found in either of the Senate bills.
- Sixth, the bill would expand Medicaid eligibility to 150% of poverty level and eliminate current categorical eligibility requirements. The Federal Medicaid match for those to whom coverage is extended would be 100% in 2013 and 2014 and 91% after 2015. The Senate Finance bill sets eligibility at 133% of poverty, as did HR 3200. Because Medicaid coverage costs the federal government less than would the premium subsidies needed to cover those between 133% and 150% of poverty through private health insurance, however, HR 3962 lifted the coverage ceiling. Significantly, the legislation would increase payments to primary care practitioners who participate in Medicaid to 100% of the Medicare level by 2012 and transfers most of the cost of the increased payments to the federal government. The legislation goes a good distance toward reducing the burden of Medicaid expansions on the states, which are currently reeling from the recession. The states are likely to continue to be wary of the future costs the legislation threatens, however.
- Finally, there is the public plan. HR 3200 had a “robust” public plan, while the Senate HELP bill provides for weaker, state-based plans and the Finance bill has no public plan at all. HR 3962, as has been widely reported, continues to have a public plan available to individuals who purchase insurance through the exchange. The public plan, however, would have to negotiate rates with providers, which, as will be discussed in a subsequent post, will in all likelihood doom it from the start.
