CHN: Health Reform Back on Center Stage

President Obama jump-started a new push for health reform when he released his own health care proposal on February 22 and convened Congressional leaders from both sides of the aisle days later for a health care summit. Up until this point the President had only released principles for reform but nothing as specific as his new plan. Health care reform had been pushed to the back burner after Republican Scott Brown won the special election in Massachusetts for the vacant U.S. Senate seat and stripped Democrats of the supermajority they once possessed in that chamber.
The President’s proposal is a modified version of H.R. 3590, the bill the Senate passed in December. It is estimated to cost $950 billion over 10 years and would extend coverage to over 30 million people currently uninsured. Like the Senate bill it would create state health Exchanges where individuals lacking affordable employer coverage and small businesses could shop for health insurance. It would extend Medicaid to non-elderly individuals with incomes up to 133 percent of the federal poverty level (FPL) and provide subsidies to individuals with incomes up to 400 percent of FPL so that they may purchase coverage in the Exchange. Insurance market reforms are included, such as eliminating the practice of denying people coverage because of pre-existing conditions and charging different premiums for people based on their health status. There are also individual and employer responsibility provisions.

The President’s proposal also reflects policies that were in the House-passed bill as well as some new provisions. Among the more significant changes:

  • Higher subsidies and better benefits for low- and moderate-income people.
  • Continued funding for the Children’s Health Insurance Program (CHIP) through 2015, two years after its current expiration date. States would also be required to continue the program through 2019.
  • Phasing out the Medicare prescription drug coverage gap, known as the “doughnut hole”.
  • The establishment of a new individual mandate. People with incomes above the tax-filing threshold, as opposed to the poverty threshold as called for in the Senate bill, would have to obtain insurance or face a penalty.
  • Enhanced and uniform federal funding across all states to cover the cost of the newly-eligible pool in the Medicaid program. This would eliminate the special treatment provided to Nebraska in the Senate bill. Between 2014 and 2017 all states would receive an enhanced matching rate of 100 percent, which would go down to 95 percent between 2018 and 2019, and to 90 percent in subsequent years.
  • Greater investments in Community Health Centers.
  • Delayed implementation and an increased threshold (from $23,000 for a family plan to $27,500) for the excise tax on high-cost health plans.
  • Strengthened oversight of insurance premium increases. A new Health Insurance Rate Authority would be created to provide oversight at the federal level of insurers proposed premium increases. If rate increases are unreasonable and unjustified health insurers would have to take measures to make premiums more affordable.
  • Additional proposals to fight fraud, waste and abuse in programs.

View the President’s 11 page proposal here.  The Center for Children and Families has a brief summary of the key Medicaid, CHIP and low-income provisions.

The President’s proposal helped inform the conversation at the February 25 health care summit, which was intended to provide an opportunity for Congressional leaders from both parties to have an open discussion about how to fix our current health care system. The seven-hour summit focused on four major areas: how to control costs, reduce deficits, expand coverage, and reform insurance markets.  Although there were some points of agreement, major disagreements still persist. Throughout the course of the summit Republicans called on Democrats to start afresh with an entirely new bill. This is not an approach Democrats are willing to consider. Instead, they are gauging whether they have the votes in both chambers to pass the Senate bill with modifications by a simple majority vote (i.e. through the reconciliation process). Congressional leaders have indicated that they would like to have a bill for the President by the Easter recess.

Meanwhile, advocates are redoubling their efforts to demonstrate broad support among the base for health care reform.  The day before the President’s health care summit, advocates who had been marching for days from Philadelphia arrived in Washington, DC and held a rally to call on Congress to get the job done. The march was in honor of Melanie Shouse, a longtime health care activist who died of breast cancer because she missed out on critical treatment due to her inability to find affordable health insurance.

Budget Report 2012 - Self-Inflicted Wounds