National Health Reform Current Status

1
National Health Reform Current Status

• Massachusetts Special Committee
• on National Health Reform
• July 7th, 2009

2
National Health Reform

• Overall Goal- Affordable health insurance
  coverage for 45M uninsured and reduce the rate of
  growth of all (public and private) heath care
  costs and improve quality
• Four major plans being considered- White House,
  Senate Finance, Senate (HELP), House Tri-
  Committee ( 11 plans in total)
• The framework for all four plans is modeled on
  the Massachusetts Health Reform legislation and
  all plans are similar to each other

3
National Health Reform

• Understanding the debate three main areas
• Coverage Expansion
• Insurance Market reform
• Financing the plan program savings and new
  revenue
• Three Big Issues
• How to pay for coverage of the uninsured
• Whether to create a public insurance plan option
  and what type
• Whether to impose new obligations on employers

4
Coverage

• Senate Finance Committee policy (Baucus)
  proposal- bipartisan and most likely to prevail
• Effective date of Plan January 1, 2013
• Coverage
• Individual mandate with tax penalties
• Refundable (advancable) Tax credits for 100-400
  of FPL
• Employer mandate (payroll gt500K, must pay 50 of
  premium) pay or play or soft ( free rider )
  employer mandate
• Small business tax credits
• Medicaid Eligibility Coverage Expansion up to
  115 FPL for all groups except childless adults
  and mainstreaming non- disabled Medicaid through
  exchange
• CHIP eligibility increased to 275 FPL

5
Coverage

• Public Health Insurance Option under 65 non-
  disabled individuals or Private non-profit
  consumer-owned cooperatives (Conrad)
• Three types of public plans trigger plan, weak
  plan (no special advantages), strong plan
  (Medicare)
• Temporary Medicare Buy In- ages 55-64
• Reduce or eliminate Medicare disability two year
  waiting period
• Excluded Groups - Undocumented Aliens and
  Individuals for whom insurance is unaffordable

6
Insurance Reform

• Health insurance market reform
• Creation of Insurance Exchange (s) National,
  Regional or State Level
• All insurers must participate
• Private Health Insurance Reform non and small
  group
• Adjusted Community Rating premiums can vary
  based on age, geography, family composition and
  tobacco use- plus rate bands
• Guaranteed issue and renewability,
• No exclusion for pre - existing conditions
• Dependants up to age 26
• Minimal coverage standards - out of pocket
  maximums, elimination of annual and lifetime
  coverage maximums

7
Financing- Medicare/Medicaid Savings and new
Revenue

• Medicare
• Hospital Pay for Performance 20 withhold
• Increased payments for primary care bonus
  payments
• Reduced payments for preventable readmissions by
  20
• Reduce payments based on geographic variation
• Voluntary ACO program share in savings
• SGR Physician payment reform
• Cut special Medicare payments to teaching
  hospitals

8
Financing- Medicare/Medicaid Savings and new
Revenue

• Medicare Advantage cuts
• Market basket update cuts
• Imaging cuts
• Home health rate cuts
• Permanently authorizes Medicare demonstration
  authority for all-payer reform projects

9
Financing- Medicare/Medicaid Savings and new
Revenue

• Medicaid
• Medicaid provider payments required to meet
  national standard (e.g., 80 of Medicare)
• Feds finance 100 of cost for newly-covered
  Medicaid populations for the first 5 years
• Next 5 years, state shares increases by 20 of
  cost per year
• Counter-cyclical stabilizer (enhanced FMAP in
  downturns)

10
Financing- Medicare/Medicaid Savings and new
Revenue

• Medicaid FMAP
• Current range (pre-ARRA) is 50-83 federal match
• Current FMAP based on state per capita income
  relative to national average
• New formula takes into account state poverty rate
• Takes out floor? big problem for Massachusetts
  and other States
• Revenue neutral or not?

11
Financing- Medicare/Medicaid Savings and new
Revenue

• New Revenue
• Options to Modify the Exclusion for Employer
  Provided Health Coverage
• A number of options are being considered that
  would limit the value of employer-provided health
  coverage that is excludable from gross income.
• Impose a limit based on the value of the plan (
  6,200/ individual, 15,700 family)
• Impose a limit based on income thresholds
• Impose a limit based on a combination of the
  value of the plan and income thresholds.
• Also considering a wide variety of other new
  taxes or tax changes