CHN: Congress Unveils More Health Reform Proposals

Congress continued to work on health reform and made some progress before adjourning for the July 4 recess. Still, the bulk of the work awaits them in July.
The Senate Health, Education, Labor and Pensions (HELP) Committee, after introducing the Affordable Health Choices Act began the process of marking up the bill. Dozens of amendments have been voted on thus far and many more still await consideration. (For a brief overview of what is included in the HELP bill see Human Needs Report, June 16 .)The Committee will resume debate on the bill when Congress returns the week of July 6. Some of the issues the Committee will have to take up at that time include some of the more contentious ones like inclusion of a new public health plan option and an employer responsibility provision.

On June 19, the Chairmen of the three committees with jurisdiction over health reform in the House released a discussion draft of their joint bill and last week held a series of hearings on the draft. The discussion draft has many components similar to those in the Senate HELP bill. Like the HELP bill it would establish an insurance exchange market where the uninsured could shop for affordable health plans. A new public health plan would be among the plans offered in the exchange. Like the HELP bill there would be a basic benefit package that all health plans would have to provide as a minimum. The essential benefits package would be established based on recommendations from an independent Advisory Committee and would include such things as preventative services with no cost-sharing, mental health services, and dental and vision care for children. People participating in the exchange with incomes between 133 and 400 percent of the federal poverty line (FPL) would receive subsidies or affordability credits on a sliding scale to help pay for  coverage.  Medicaid would be expanded so that all individuals with incomes below 133 percent of FPL would be eligible, effective in 2013. The expansion would be financed fully by federal funds.

Similar to the HELP bill, insurance market reforms are included to diminish discriminatory practices and better protect consumers. For one, there will be caps on out of pocket payments and prohibitions on lifetime and annual limits on benefits. The plan would do away with exclusions of pre-existing conditions and would limit the ability of insurance companies to charge higher rates due to health status, gender, or other factors. Premiums will only be allowed to vary based on age (at a ratio no more than 2:1), geography, and family size.

Shared responsibility provisions are also included. Everyone will be required to have health insurance. Those who opt out will face a modest penalty based on income. The penalties are not to exceed the average cost of a health plan in the exchange. Some exceptions will be made for individuals who encounter certain hardships, (such as affordability), or who have religious objections. Employers also share in the responsibility. They must either provide coverage for their workers, cover part of the cost of premiums, or contribute to the exchange on behalf of their workers. Like individuals who choose not to get basic coverage, employers who do not offer coverage to their employees will be subject to a penalty which will be based on the size of their payroll. Exceptions are made for small businesses with a payroll under a certain limit.

There are also provisions to strengthen Medicare and improve the health benefits for the elderly and people with disabilities participating in the program. Currently there is a coverage gap in prescription drug benefits; this gap is usually called the donut hole. In 2009, individuals in Medicare Part D have to pay the full cost of their prescription drugs after their total drug spending reaches $2,700 and must incur almost $3,454 in out of pocket costs before receiving more benefits.  The House draft bill proposes eliminating the donut hole over 15 years, starting with an additional $500 in coverage in 2011 and further increases over time.   Also included are improvements to Medicare’s low-income subsidy programs. Asset limits for programs that help Medicare beneficiaries pay premiums and cost-sharing would be increased and the Qualified Individuals program, which assists low-income elderly and people with disabilities with premium payments, would be permanently extended. Another helpful provision is the elimination of patient co-payments for preventative procedures.

One area in which the draft bill falls short is in restoring equity in Medicaid coverage for lawfully residing immigrants. Currently, there is a 5-year waiting period that prevents most recent legal immigrants from using Medicaid if they fall on hard times, even though they pay taxes just like citizens. The House draft bill does not remove this unfair and arbitrary waiting period.

The Senate Finance Committee originally planned to release its bill by the week of June 22. However, it received some preliminary estimates from the Congressional Budget Office that set the cost of their reform plan at over $1.5 trillion and sent some Members of Congress into sticker shock. As a result, Chairman Max Baucus (D-MT) and Ranking Chair Charles Grassley (R-IA) have renegotiated a plan that scales back the cost of the package to the $1 trillion range. Senator Baucus has been very intent on developing a bipartisan proposal. Advocates hope the changes will not negatively affect low- and middle-income people. Senator Baucus is expected to release the bill after the July 4 recess.

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