From NAHU -
Speaker of the House Nancy Pelosi (D-CA) released a revised version of health care reform legislation on Thursday. The 1,990-page measure, now known as H.R. 3962, includes a government-run public plan option to be offered through a national health insurance exchange that would negotiate rates with providers. However, the plan would initially be financed with public money and would not have to pay taxes and maintain solvency standards like private insurers. The Congressional Budget Office has provided a preliminary estimate that the bill will cost $894 billion over a 10-year period. The Joint Committee on Taxation has also prepared a fiscal analysis.
One of the few points of the bill NAHU views as positive is the retention of language that NAHU worked tirelessly with Blue Dog Democrats to advance during the committee process that specifically ensures the role of licensed health insurance agents and brokers in the national exchange. The simple language states “Nothing in this division shall be construed to affect the role of enrollment agents and brokers under state law, including with regard to the enrollment of individuals and employers in qualified health benefits plans including the public health insurance option.”
Unfortunately, the new bill also includes a provision that we are extremely concerned about, granting authority to the exchange’s commissioner, in consultation with the Small Business Administration, to include within the exchange the following services: “Educational activities to increase awareness of the Health Insurance Exchange and available small-employer health plan options; distribution of information to small employers with respect to the enrollment and selection process for health plans available under the Health Insurance Exchange, including standardized comparative information on the health plans available under the Health Insurance Exchange; distribution of information to small employers with respect to available affordability credits or other financial assistance; referrals to appropriate entities of complaints and questions relating to the Health Insurance Exchange; enrollment and plan selection assistance for employers with respect to the Health Insurance Exchange; and responses to questions relating to the Health Insurance Exchange.”
Other troubling aspects of the new bill include:
- Market reforms that include modified community rating for all groups that do not self-fund limited to age bands of 2:1, geography and family composition. In addition, all such plans will be guaranteed issue, no preexisting condition limitations, out-of-pocket caps at $5,000/$10,000 and no lifetime or annual limits. Individuals that keep their exact same policy with no changes at all can be grandfathered indefinitely, but group coverage must convert to the new standards within five years.
- A mandate requiring employers to pay 72.5% of the cost of acceptable coverage for individuals and 65% for family coverage, and part-time employees must be covered on a prorated basis based on average hours worked. In lieu of paying for coverage, the measure creates a “pay or play” option allowing the employer to pay eight percent of wages, but that fine goes to the federal treasury and would not benefit the non-covered employees. Small employers with annual payroll up to $500,000 will be exempt from the requirement and the fines would phase in for employers with payrolls between $500,000 and $750,000.
- The creation of a new national purchasing pool-based exchange where people can purchase private coverage and the public option. The exchange starts by allowing small employers and individuals without employer-sponsored coverage to purchase in the pool, but eventually any size employer may be allowed to buy coverage through the exchange, meaning that the bill does not adhere to the promise that the public plan is limited to a small population.
- The inclusion of a very rich essential benefit package with 70% the minimum actuarial value allowed for purchase.
- An individual mandate enforced solely through an income tax penalty of the lesser of 2.5% of income or an average premium in the exchange. Individuals with incomes below the tax filing standard are exempt and may also apply for hardship waivers.
- Sliding-scale subsidies available in the exchange for people with family incomes of up to 400% of the Federal Poverty Level (over $80K annually for a family of four) and very limited business tax credits for the smallest of companies with low-income wage earners.
- A dramatic expansion of Medicaid to all legal residents with incomes up to 150% FPL. CHIP beneficiaries will either be folded into Medicaid or be eligible for subsidized coverage through the exchange based on family income.
- Pay-fors that include a 5.4% income tax surcharge on Americans with adjusted gross incomes in excess of $500,000, a limitation that over-the-counter prescription drugs may not be reimbursed through FSAs, an increase on the tax on distributions from a Health Savings Account that are not used for qualified medical expenses to 20% (from 10%), the elimination of the deduction for employer-sponsored retiree prescription drug plans, a tax on medical devices and significant cuts to the Medicare Advantage program.
Other interesting provisions include grants for the creation of cooperatives (co-ops), a temporary national high-risk pool and interstate compacts to sell coverage across state lines. Relative to medical malpractice, there is language that provides for early offers and certificate of merit demonstration projects and language to clarify that practice guidelines are not considered to be evidence of the standard of care owed by a health care provider. NAHU is still is in the process of conducting a detailed analysis, and will release more information about the measure over the next week.
It is expected that the vote on this measure on the House floor will come extremely quickly, as soon as next Thursday or Friday. The release on October 29 gives the Democratic leadership three days to post the legislation online and another three days to post a final manager’s amendment by the Democratic leadership on the Rules Committee’s website. That amendment is expected to address concerns about the bill that arise as members wade through it over the weekend. Majority Leader Steny Hoyer has stated that the manager’s amendment could be made publicly available as soon as Monday.
More resources available on the bill include the following:
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