Health Reform: Major Congressional Proposals

1
Health ReformMajor Congressional Proposals

• Joshua Goldberg
• State Coverage Initiatives National Meeting
• Albuquerque, NM
• July 30, 2009

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Congressional Action Timeline
Floor Passage by August Recess -
Committee Adoption by July 4 Recess -
- HELP Markup June 17 July 15, 2009
- House Tri-Committee Draft June 2009
- HELP Committee Draft June 2009
- Hearings and Roundtables
- Finance White Paper Nov. 2008
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Building Blocks of Reform
Insurance Market Reforms Individual Mandate /
Employer Mandate Guaranteed Issue / No
preexisting conditions Federal rating rules No
annual or lifetime limits Minimum benefits package
Medicaid Expansion 133 FPL
Health Insurance Exchange Facilitate plan
comparisons and purchase Low income
subsidies Defined benefit packages Risk adjustment
Public Plan Competing against private plans
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HELP CommitteeInsurance Market Reforms

• Individual mandate
• Federal tax penalty defined by Secretary
• Exemptions defined by Secretary
• Employer mandate
• Employers with more than 25 employers must
  provide adequate coverage and contribute 60 of
  premium
• 750/employee annual penalty
• Guaranteed issue
• No preexisting condition exclusions
• Adjusted community rating
• Age (21 maximum)
• Geography
• No annual or lifetime limits

5
HELP CommitteeHealth Insurance Exchange

• States may establish Gateways
• Federal government operates if states do not
  establish
• Functions
• Certify participating plans
• Administrative simplification
• Risk adjustment
• Enroll individuals in plans
• Administer subsidies
• Sliding scale subsidy up to 400 FPL
• Navigators to assist with plan selection
• Benefit mandates maintained, states must pay
  additional cost for subsidies
• Secretary to establish essential health benefits

6
HELP CommitteePublic Plan

• Community Health Insurance Option
• Offered through Gateways
• Administered by HHS
• Provider reimbursements negotiated
• Subject to solvency standards
• Follows same benefit and consumer protection
  rules as other Gateway plans
• State advisory council

7
HELP CommitteeTransition

• Planning grants to states
• Grandfathering
• Group and individual coverage in effect before
  enactment
• No new enrollments

8
House Tri-CommitteeHealth Choices Commissioner

• Heads Health Choices Administration
• Develop new federal standards for
• Marketing
• Grievances and appeals
• Network adequacy
• Prompt pay
• Coordination of benefits subrogation
• Medical loss ratios
• No guidance in statute for federal standards

9
House Tri-CommitteeInsurance Market Reforms

• Individual mandate
• 2 federal tax penalty on income after standard
  deduction and exemption
• Secretary to provide exemptions
• Employer mandate
• 8 payroll tax
• Must provide 72.5 actuarial value coverage of
  basic benefit package
• Guaranteed issue
• No preexisting condition exclusions
• Adjusted community rating
• Age (21 maximum)
• Geography
• No annual or lifetime limits
• New federal consumer protection standards

10
House Tri-CommitteeHealth Insurance Exchange

• National Exchange w/ state option
• State must apply and fulfill functions of
  exchange
• Commissioner may approve
• Facilitate comparison and enrollment in plans
• All plans are individual plans
• Participating employers are list-billed
• No individual plans may be sold outside exchange
• Carriers submit annual bids to participate
• Commissioner specifies benefits each year
• Health Benefits Advisory Committee makes
  recommendations
• Exchange administers subsidies
• Sliding scale subsidies up to 400 FPL
• Apply to premiums and cost sharing

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House Tri-CommitteePublic Plan

• Offered through Gateways
• Administered by HHS
• Providers initially reimbursed at Medicare levels
• 5 bonus if provider participates in both
  programs
• Flexibility added over time
• Follows same benefit and consumer protection
  rules as other Exchange plans

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House Tri-CommitteeTransition

• Grandfathering
• Individual
• No new enrollment
• Dependents may be added
• Group
• Transitioned to new rules within 5 years

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Senate Finance

• Still awaiting a final document for consideration
• Bipartisan discussions are continuing

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Senate FinanceMarket Reforms

• Individual Mandate
• Guaranteed issue
• No preexisting condition exclusions
• Adjusted community rating-7.51 max
• Age
• Geography
• Tobacco
• No lifetime or annual limits
• 4 tiers of plans

15
Senate FinanceHealth Insurance Exchanges

• State-based exchanges
• Individual and small group
• Facilitate comparison and enrollment

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Senate FinanceOutstanding Issues

• Financing
• Employer mandate
• Public plan