Health Care Reform Basics

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Health Care Reform Basics

• By Gary Sobotta

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Obama Health Care Reserve Fund FY 2010 - 2019

• Major Financing Components of the Proposed
  Fund

Competitive bidding for Medicare Advantage
Other healthcare spending reductions
Lowering tax deductions in the highest income-tax
bracket and other tax changes
Total 635 billion over 10 years
132 billion
177 billion
326 billion
Medicare Medicaid Savings 309 billion
Tax Increases 326 billion
The Budget describes the 635 billion fund as a
down payment on health care reform. Most
experts believe that 1 trillion or more may be
required over 10 years to fully finance coverage
expansions for the uninsured.
Additional Resources to be Identified with
Congress
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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Plan Overview
• Maintains the ability for people to keep what
  they have and minimizes disruption
• Invests in health care workforce to improve
  access to primary care
• Invests in prevention and public health programs
• Creates a new national health Exchange that
  permits States the option of developing a State
  or regional exchange in lieu of the national
  Exchange
• Establishes shared responsibility among
  individuals, employers, and government
• Offers sliding scale credits to ensure
  affordability for low and middle-income
  individuals and families
• Jump starts health care delivery system reforms
  to reduce costs, maintain fiscal sustainability,
  and improve quality and Expands authority to
  prevent waste, fraud and abuse

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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Workforce Investments
• Expands the National Health Service Corps
• Boosts training of primary care doctors and
  expands pipeline of individuals going into health
  professions, including primary care, nursing and
  public health
• Supports workforce diversity efforts and Expands
  scholarships and loans for individuals in needed
  professions and shortage areas

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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Prevention and Wellness
• Expands Community Health Centers
• Waives cost-sharing for preventive services in
  benefit packages
• Creates community-based programs to deliver
  prevention and wellness services
• Targets community-based programs and new data
  collection efforts to better identify and address
  racial, ethnic and other health disparities and
• Strengthens state, local, tribal and territorial
  public health departments and programs.

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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Insurance Market Reforms
• Ensures availability of coverage by prohibiting
  insurers from excluding pre-existing
• conditions or engaging in other discriminatory
  practices
• Prohibits rating based on gender, health status,
  or occupation and strictly limits premium
  variation based on age
• Establishes a new Health Insurance Exchange to
  create a transparent marketplace for
• individuals and small employers to comparison
  shop among private insurers and a new
• public health insurance option
• Introduces administrative simplification and
  standardization to reduce administrative
• costs across all plans and providers

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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Ensuring Affordability and Access
• Includes sliding scale affordability credits in
  the Exchange to support individuals
• and families with incomes between Medicaid
  eligibility levels and 400 of the
• federal poverty level (FPL) (NOTE The average
  cost of family coverage today is
• 14 of a familys income at 400 of poverty.)
• Expands Medicaid for the most vulnerable,
  low-income populations an payment
• rates to enhance access to primary care under
  Medicaid
• Improves payment rates to enhance access to
  primary care under Medicaid and
• Caps total out-of-pocket spending in all new
  policies to prevent bankruptcies from medical
  expenses.

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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Public Health Insurance Option
• Enhances transparency and accountability by
  creating a new public
• health insurance option within the Exchange to
  offer choice and
• ensure competition
• The public health insurance option is
  self-sustaining and competes
• on level field with private insurers in the
  Exchange and When
• individuals enter the Exchange, whether on
  their own or as
• employees of a business that is purchasing in
  the Exchange, they are
• free to choose among available public and
  private options

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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Benefits
• Independent public/private advisory committee
  recommends benefit packages based on standards
  set in statute
• Guarantees choice and fair, transparent
  competition by creating various levels of
  standardized benefits and cost-sharing
  arrangements, with additional benefits available
  in higher-cost plans and Phases-in requirements
  relating to
• benefit and quality standards for employer plans

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Key Features of the Tri-Committee Health Reform
Draft Proposal in the U.S. House of
Representatives

• Shared Responsibility
• Once market reforms and affordability credits are
  in effect to ensure access and
• affordability, individuals are responsible for
  having health insurance with an
• exception in cases of hardship
• Employers choose between providing coverage for
  their workers or contributing funds
• on behalf of their uncovered workers
• Government is responsible for ensuring
  affordability of insurance through new
• affordability credits, insurance market and
  delivery system reforms and oversight of
• insurance companies and Protects small
  businesses by exempting small low-wage firms
• and providing a new small business tax credit for
  firms providing health coverage

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America's Affordable Health Choices Act of 2009

• Sets forth provisions governing health insurance
  plans and issuers, including
• exempting grandfathered health insurance coverage
  from requirements of this Act
• prohibiting preexisting condition exclusions
• providing for guaranteed coverage to all
  individuals and employers and automatic renewal
  of coverage
• prohibiting premium variances, except for reasons
  of age, area, or family enrollment
• prohibiting rescission of health insurance
  coverage without clear and convincing evidence of
  fraud.

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America's Affordable Health Choices Act of 2009

• Requires qualified health benefits plans to
  provide essential benefits. Prohibits an
  essential benefits package from imposing any
  annual or lifetime coverage limits. Lists
  required covered services, including
  hospitalization, prescription drugs, mental
  health services, preventive services, maternity
  care, and children's dental, vision, and hearing
  services and equipment. Limits annual
  out-of-pocket expenses to 5,000 for an
  individual and 10,000 for a family
• Provides for an affordability premium credit and
  an affordability cost-sharing credit for
  low-income
• Requires employers to offer health benefits
  coverage to employees and make specified
  contributions towards such coverage or make
  contributions to the Exchange for employees
  obtaining coverage through the Exchange. Exempts
  businesses with payrolls below 250,000 from such
  requirement

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America's Affordable Health Choices Act of 2009

• Establishes the Health Choices Administration as
  an independent agency to be headed by a Health
  Choices Commissioner. Establishes the Health
  Insurance Exchange within the Health Choices
  Administration in order to provide individuals
  and employers access to health insurance coverage
  choices, including a public health insurance
  option. Requires the Commissioner to
• (1) contract with entities to offer health
  benefit plans through the Exchange to eligible
  individuals
• 2) establish a risk-pooling mechanism for
  Exchange-participating health plans.. e
  individuals and families participating in the
  Exchange.

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America's Affordable Health Choices Act of 2009

• Amends the Internal Revenue Code to impose a tax
  on (1) an individual without coverage under a
  health benefits plan and (2) an employer that
  fails to satisfy health coverage participation
  requirements for an employee.
• Imposes a surtax on individual modified adjusted
  gross income exceeding 350,000.
• Amends title XVIII (Medicare) of the Social
  Security Act to revise provisions relating to
  payment, coverage, and access, including to (1)
  reduce payments to hospitals to account for
  excess readmissions (2) limit cost-sharing for
  Medicare Advantage beneficiaries (3) reduce the
  coverage gap under Medicare Part D (Voluntary
  Prescription Drug Benefit Program) (4) provide
  for increased payment for primary health care
  services and (5) prohibit cost-sharing for
  covered preventive services

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America's Affordable Health Choices Act of 2009

• Sets forth provisions to reduce health care fraud
• Establishes a Center for Comparative
  Effectiveness Research within the Agency for
  Healthcare Research and Quality, financed by a
  tax on accident and health insurance policies, to
  conduct and support health care services
  effectiveness research.
• Amends title XIX (Medicaid) of the Social
  Security Act to
• (1) expand Medicaid eligibility for low-income
  individuals and families
• (2) require coverage of additional preventive
  services
• (3) increase payments for primary care
  services.

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America's Affordable Health Choices Act of 2009

• Sets forth provisions relating to the health
  workforce, including
• (1) addressing health care workforce needs
  through loan repayment and training
• (2) establishing the Public Health Workforce
  Corps
• (3) addressing health care workforce diversity
  and
• (4) establishing the Advisory Committee on
  Health Workforce Evaluation and Assessment.
• Requires the Secretary of Health and Human
  Services to provide for the development of
  quality measures for the delivery of health care
  services in the United States.

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America's Affordable Health Choices Act of 2009

• Sets forth provisions to
• (1) provide for prevention and wellness
  activities
• (2) establish the Center for Quality Improvement
  
• (3) establish the position of the Assistant
  Secretary for Health Information
• 4) revise the 340B drug discount program (a
  program limiting the cost of covered outpatient
  drugs to certain federal grantees)
• (5) establish a school-based health care program
  and
• (6) establish a national medical device registry.

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Mayo Clinics reaction !

• Although there are some positive provisions in
  the current House Tri-Committee
• bill including insurance for all and payment
  reform demonstration projects
• the proposed legislation misses the opportunity
  to help create higher-quality, more
• affordable health care for patients. In fact, it
  will do the opposite.