Summary of House Health Care Reform Bill
America’s Affordable Health Choices Act
The bill, or at least the summary, looks pretty good, and the AMA has endorsed it, something it did not do for the so-called “Hillary Care” fifteen years ago. It’s not as good as single-payer, in my opinion, but it’s a lot better than what we have now.
Last week, I wrote a piece here, criticising a health care reform plan that, I thought, was a “wasteful hybrid system.” I’m thinking about taking that post down. This week, the house released its draft bill, and I like a lot of what’s in it. For example, it covers an additional 40 million people, it increases the number of primary care physicians and nurses, expands wellness programs, and creates a public insurance option. Contrary to what a lot of pundits are saying, it does give a basic explanation of how it would be paid for. Did anyone figure out how to pay for the Bush Tax Cuts of 2001 and 2003? Those cuts cost the nation $5 trillion.
The summary follows, with a link to the U.S. House website.
SUMMARY
America’s Affordable Health Choices Act provides quality affordable health care for all Americans and controls health care cost growth. Key provisions of the bill released today include:
COVERAGE AND CHOICE
AFFORDABILITY
SHARED RESPONSIBILITY
CONTROLLING COSTS
PREVENTION AND WELLNESS
WORKFORCE INVESTMENTS
I. COVERAGE AND CHOICE
The bill builds on what works in today’s health care system and fixes the parts that are broken. It protects current coverage – allowing individuals to keep the insurance they have if they like it – and preserves choice of doctors, hospitals, and health plans. It achieves these reforms through:
A Health Insurance Exchange. The new Health Insurance Exchange creates a transparent and functional marketplace for individuals and small employers to comparison shop among private and public insurers. It works with state insurance departments to set and enforce insurance reforms and consumer protections, facilitates enrollment, and administers affordability credits to help low- and middle-income individuals and families purchase insurance. Over time, the Exchange will be opened to additional employers as another choice for covering their employees. States may opt to operate the Exchange in lieu of the national Exchange provided they follow the federal rules.
A public health insurance option. One of the many choices of health insurance within the health insurance Exchange is a public health insurance option. It will be a new choice in many areas of our country dominated by just one or two private insurers today. The public option will operate on a level playing field. It will be subject to the same market reforms and consumer protections as other private plans in the Exchange and it will be self-sustaining – financed only by its premiums.
Guaranteed coverage and insurance market reforms. Insurance companies will no longer be able to engage in discriminatory practices that enable them to refuse to sell or renew policies today due to an individual’s health status. In addition, they can no longer exclude coverage of treatments for pre-existing health conditions. The bill also protects consumers by prohibiting lifetime and annual limits on benefits. It also limits the ability of insurance companies to charge higher rates due to health status, gender, or other factors. Under the proposal, premiums can vary based only on age (no more than 2:1), geography and family size.
Essential benefits. A new independent Advisory Committee with practicing providers and other health care experts, chaired by the Surgeon General, will recommend a benefit package based on standards set in the law. This new essential benefit package will serve as the basic benefit package for coverage in the Exchange and over time will become the minimum quality standard for
employer plans. The basic package will include preventive services with no cost-sharing, mental health services, oral health and vision for children, and caps the amount of money a person or family spends on covered services in a year.
II. AFFORDABILITY
To ensure that all Americans have affordable health coverage the bill:
Provides sliding scale affordability credits. The affordability credits will be available to low- and moderate- income individuals and families. The credits are most generous for those who are just above the proposed new Medicaid eligibility levels; the credits decline with income (and so premium and cost-sharing support is more limited as your income increases) and are completely phased out when income reaches 400 percent of the federal poverty level ($43,000 for an individual or $88,000 for a family of four). The affordability credits will not only make insurance premiums affordable, they will also reduce cost-sharing to levels that ensure access to care. The Exchange administers the affordability credits with other federal and state entities, such as local Social Security offices and state Medicaid agencies.
Caps annual out-of-pocket spending. All new policies will cap annual out-of-pocket spending to prevent bankruptcies from medical expenses.
Increased competition: The creation of the Health Insurance Exchange and the inclusion of a public health insurance option will make health insurance more affordable by opening many market areas in our country to new competition, spurring efficiency and transparency.
Expands Medicaid. Individuals and families with incomes at or below 133 percent of the federal poverty level will be eligible for an expanded and improved Medicaid program. Recognizing the budget challenges in many states, this expansion will be fully federally financed. To improve provider participation in this vital safety net – particularly for low-income children, individuals with disabilities and people with mental illnesses – reimbursement rates for primary care services will be increased with new federal funding.
Improves Medicare. Senior citizens and people with disabilities will benefit from provisions that fill the donut hole over time in the Part D drug program, eliminate cost-sharing for preventive services, improve the low-income subsidy programs in Medicare, fix physician payments, and make other program improvements. The bill will also address future fiscal challenges by improving payment accuracy, encouraging delivery system reforms and extending solvency of the Medicare Trust Fund.
III. SHARED RESPONSIBILITY
The bill creates shared responsibility among individuals, employers and government to ensure that all Americans have affordable coverage of essential health benefits.
Individual responsibility. Except in cases of hardship, once market reforms and affordability credits are in effect, individuals will be responsible for obtaining and maintaining health insurance coverage. Those who choose to not obtain coverage will pay a penalty of 2.5 percent of modified adjusted gross income above a specified level.
Employer responsibility. The proposal builds on the employer-sponsored coverage that exists today. Employers will have the option of providing health insurance coverage for their workers or contributing funds on their behalf. Employers that choose to contribute will pay an amount based on eight percent of their payroll. Employers that choose to offer coverage must meet minimum benefit and contribution requirements specified in the proposal.
Assistance for small employers. Recognizing the special needs of small businesses, the smallest businesses (payroll that does not exceed $250,000) are exempt from the employer responsibility
requirement. The payroll penalty would then phase in starting at 2% for firms with annual payrolls over $250,000 rising to the full 8 percent penalty for firms with annual payrolls above $400,000. In addition, a new small business tax credit will be available for those firms who want to provide health coverage to their workers. In addition to the targeted assistance, the Exchange and market reforms provide a long-sought opportunity for small businesses to benefit from a more organized, efficient marketplace in which to purchase coverage.
Government responsibility. The government is responsible for ensuring that every American can afford quality health insurance, through the new affordability credits, insurance reforms, consumer protections, and improvements to Medicare and Medicaid.
IV. PREVENTION AND WELLNESS
Prevention and wellness measures of the bill include:
Expansion of Community Health Centers;
Prohibition of cost-sharing for preventive services;
Creation of community-based programs to deliver prevention and wellness services;
A focus on community-based programs and new data collection efforts to better identify and address racial, ethnic, regional and other health disparities;
Funds to strengthen state, local, tribal and territorial public health departments and programs.
V. WORKFORCE INVESTMENTS
The bill expands the health care workforce through:
Increased funding for the National Health Service Corp;
More training of primary care doctors and an expansion of the pipeline of individuals going into health professions, including primary care, nursing and public health;
Greater support for workforce diversity;
Expansion of scholarships and loans for individuals in needed professions and shortage areas; Encouragement of training of primary care physicians by taking steps to increase physician training outside the hospital, where most primary care is delivered, and redistributes unfilled graduate medical education residency slots for purposes of training more primary care physicians. The proposal also improves accountability for graduate medical education funding to ensure that physicians are trained with the skills needed to practice health care in the 21st century.
VI. CONTROLLING COSTS
The bill will reduce the growth in health care spending in a numerous ways. Investing in health care through stronger prevention and wellness measures, increasing access to primary care, health care delivery system reform, the Health Insurance Exchange and the public health insurance option, improvements in payment accuracy and reforms to Medicare and Medicaid will all help slow the growth of health care costs over time. These savings will accrue to families, employers, and taxpayers.
Modernization and improvement of Medicare. The bill implements major delivery system reform in Medicare to reward efficient provision of health care, rolling out innovative concepts such as accountable care organizations, medical homes, and bundling of acute and post-acute provider payments. New payment incentives aim to decrease preventable hospital readmissions, expanding this policy over time to recognize that physicians and post-acute providers also play an important role in avoiding readmissions. The bill improves the Medicare Part D program by creating new consumer protections for Medicare Advantage Plans, eliminating the “donut hole” and improving
low-income subsidy programs, so that Medicare is affordable for all seniors and other eligible individuals. A centerpiece of the proposal is a complete reform of the flawed physician payment mechanism in Medicare (the so-called sustainable growth rate or “SGR” formula), with an update that wipes away accumulated deficits, provides for a fresh start, and rewards primary care services, care coordination and efficiency.
Innovation and delivery reform through the public health insurance option. The public health insurance option will be empowered to implement innovative delivery reform initiatives so that it is a nimble purchaser of health care and gets more value for each health care dollar. It will expand upon the experiments put forth in Medicare and be provided the flexibility to implement value-based purchasing, accountable care organizations, medical homes, and bundled payments. These features will ensure the public option is a leader in efficient delivery of quality care, spurring competition with private plans.
Improving payment accuracy and eliminating overpayments. The bill eliminates overpayments to Medicare Advantage plans and improves payment accuracy for numerous other providers, following recommendations by the Medicare Payment Advisory Commission and the President. These steps will extend Medicare Trust Fund solvency, and put Medicare on stronger financial footing for the future.
Preventing waste, fraud and abuse. New tools will be provided to combat waste, fraud and abuse within the entire health care system. Within Medicare, new authorities allow for pre-enrollment screening of providers and suppliers, permit designation of certain areas as being at elevated risk of fraud to implement enhanced oversight, and require compliance programs of providers and suppliers. The new public health insurance option and Health Insurance Exchange will build upon the safeguards and best practices gleaned from experience in other areas.
Administrative simplification. The bill will simplify the paperwork burden that adds tremendous costs and hassles for patients, providers, and businesses today.
PREPARED BY THE HOUSE COMMITTEES ON WAYS AND MEANS, ENERGY AND COMMERCE, AND EDUCATION AND LABOR JULY 14, 2009
I’ve very glad to see someone who initially preferred single-payer taking a close look at the House bill and realizing how good it is.
The public option will follow Medicare reforms recommended by MedPac–and this is key. By following those reforms Medicare will be lifting quality and containing costs, making high quality, sustainable insurance affordable for everyone.
This will set a benchmark for for-profit insurers to compete against. I think most for-profits will fail in that competitoin though very good non-profit private sector plans should do well–and provide variety..
Utltimately, I thin more and more Americans will choose the publci sector opton, but they won’t be forced into it, It wouldhave been very, very difficutl to mandate single payer, and most single payer plans haven’t thought as carefully about have to contain costs as MedPac has.
It’s good to see such a fair summary of the House plan.
Wish we had more of this level of analysis the mainstream press.
Maggiemahar
19 Jul 09 at 2:20 pm
Thank you Maggie. I’m honored to post your comment here. The more I look at the House Bill, the better I like it. We need to get the Senate to come up with a close match.
John Freeland
19 Jul 09 at 4:17 pm
I like your summary of the bill and agree with you that it’s certainly better than what we’ve got! It may not be perfect, but it will move the US in the right direction. It’s got some great opportunities for those without health insurance – and better outcomes for everyone (ie.. coordination of care and redundant records).
Currently, we have a system that is based on ILLNESS, and we need a system that is based on WELLNESS! I think this plan does a lot to get us there. Low income people who have no insurance can’t get cancer screenings or preventative care which is why they end up in the ER for colds, or at a late stage of cancer before being treated. Even for those with insurance, it seems to be about the treatment of symptoms (illness) rather than prevention or root cause resolution. My brother in law went through a 10 year battle of chronic illness (fortunately with insurance) but the problems in the health care system were obvious. Needless to say we were very frustrated with the medical community and the lack of ‘whole person approach’ to handle a chronic patient with mulitple complications.
I’m amazed at all the pundit rhetoric and rumors that are circulating in all the media about rationed care, limited care for elderly, and socialized medicine. This doesn’t sound like those things at all. I needed a place to read about it myself and get a true summary of the data. Thanks for putting this out…
Barbara S.
28 Jul 09 at 5:40 pm
Thanks, Barbara. What I really find annoying is the way the GOP tries to scare people by telling them that the government will be between them and their doctor, when their’s already and insurance company between them.
John Freeland
28 Jul 09 at 9:31 pm
There are many misleading statements in this summary. If you read through the bill there are so many requirements that many policies will not be allowed. The government plan will eventualy force the private market out and give control to the government. Obama himself even said this is the idea. The committees will be determining which care is appropriate. Have you seen government run anything well? Have you seen the tranparency?
The section on providing grants and support for futher education in nursing was really another discriminitive affirmitive action program bringing race in the mix again.
Also did you notice who prepared this summary?
Bryan Smith
5 Aug 09 at 12:59 am
Bryan:
1. I don’t see how the government plan would force the private insurers out any more than public schools have forced private schools out of the maket. There are many who, like you, think the private option is always superior. The contempt for government is an article of faith among thost who believe in business first, regardless of cost.
2. I think the Marine Corps, and the res of the military works pretty well, much better than Blackwater, for example. Despite the partial privatization reforms brought by the Medicare Modernization Act of 2003, the Medicare Part D, and Medicare Advantage, that brought for-profit companies to the public trough, Medicar has worked very well. Social Security works pretty well. Nothing’s perfect, but I’d take Social Security over an Enron retirement plan any day.
I don’t believe your comments about Obama and “The committees will be determining…” are accurate. What committees. Under the status quo it’s the insurance companies who decide.
John Freeland
5 Aug 09 at 7:04 am
Medicare can be expanded to the broadest public while becoming a model of transparency, democracy and affordability, when the public is free to create local/regional member-owned genuinely nonprofit health plans and clinics.
These plans can be regulated as follows: http://www.healthdemocracy.org/legislation.html
Eighty years ago most health insurance was provided on such a basis. Fraternal benefit societies built medical centers, orphanages, clinics, old folks’ homes, sanataria, paid sickness benefits and funeral costs.
The Ithaca Health Alliance is a minor medical plan whose members pay $100/YEAR to be covered for 12 categories of everyday emergency anywhere in the world, and to own their own free clinic. Pretty good for a plan with just 800 members (anyone in NYS can join). Imagine what larger groups can do.
Paul Glover
13 Aug 09 at 11:57 am
Paul:
Thanks for the note and the link. It’s an interesting approach. Can the co-op “cherry-pick” the healthiest clients?
John Freeland
13 Aug 09 at 2:14 pm
I am sure that this plan makes sense to those who wish to see greater government interference into yet another area better served by private enterprise and the market. The new track that the administration is taking is designed to make the insurance companies the “bad guys”, since the general public seems to feel very strongly about their own doctors.
To that goal, the “Public Option” is included and appears to be rather benign. Laws can be changed at any time, and Congress can always repeal the section that mandates such public option to abide by the same fiscal laws as private insurance plans. Once that occurs, the government plan is able to compete against private plans with the support of taxpayers dollars. Furhter, the government writes the rules, and they can be written in such a way as to make competition with the govenment plan difficult to impossible.
Americans have a historic distrust of government. After all, our revolution came about for this reason. I suppose that I am a “victim” of this tradition. I served as an elected official at the state level and I well understand the ideas of those who favor such government intervention in our economy. It is well intentiioned, as I am sure is ObamaCare, but usually turns out to be far less efficient than even the status quo.
James Hill
14 Aug 09 at 10:18 am
James:
To your comment, “Americans have a historic distrust of government.”
Some do, some not so much. A lot of Americans believe the purpose of government is serve the interests of its citizens, while corporations serve their stockholders, or even just a few top executives. I’ll take Social Security over an Enron retirement plan any day. I’ll take Medicare over UnitedHealth any day.
It’s not too difficult to find fault with insurance companies. For example, the following Bloomberg article about UnitedHealth:
http://www.bloomberg.com/apps/news?pid=20601087&sid=agH.cI_6Ve5I&refer=home
Obama is not against the insuance companies. He wants them to work harder to find efficiencies. He wants them to play it straight. He wants them to behave in ways that would make their mothers proud, not like a bunch of sheisters.
John Freeland
14 Aug 09 at 12:13 pm
Obama has changed the thrust of his PR campaign from “health care reform” to “health insurance reform” because he believes insurance companies are easier targets than people’s relationship with their own doctors and other health care providers. He is steadily backing away from the so called public option because a substantial majority of the people are opposed to it.
I would rather have the board of directors of almost any insurance company run health care than the government. Medicare is fraught with graft and corruption. Reports of multi-million dollar overbillings and other bogus charges surface rather often, and the great fear is that as long as the government will pay the bill, it is ok. Only problem is, it is poor taxpayers who get stuck with paying the government to pay the bills.
I would agree that some people do not have that healthy fear of government, but many of those are folks who benefit from an array of government programs. Fear and distrust of the tax man drove our founders to consider and then implement revolution. That spirit is still out there. In no way do I condone any revolution except that one that voters can begin in the 2010 election cycle. Many of those newly elected Democrats from swing districts will lose badly unless they stand up to their leadership in Congress and demand to be heard by those leaders.
James Hill
19 Aug 09 at 11:35 am
James: Thanks again for the intereting note.
If I understand your point of view, which, granted, is shared by many of Americans, any government service that requires the “tax man” is bad. Medicare is bad, Social Security is bad, the GI Bill was bad, unemployment insurance is government intrusion into the free market, just like the minimum wage, Medicaid is a rippoff, public schools are a waste, WIC is legalized robbery, etc., etc. As the 2010 election approaches, we’ll be examining the logical conclusions and extensions of the right-wing’s opposistion to universal health care. We’ll be talking a lot about the right-wing’s ultimate goals for America’s future.
A note about the colonial times, since you brought it up. King George’s proclamation of 1766 promised to not settle west of the Allegheny mountains. This is not what the manifest destiny club had in mind. The populist revolt was whipped up over taxes, however, then, as now, the oligarchs have bigger plans. Welcome to Potterville.
John Freeland
19 Aug 09 at 1:02 pm
I find it interesting that those of you on the left are so quick to jump to conclusions about how limited a government those of us on the right want. I am not one of those conspiricacy theorists who believes that those terrible people who have been succesful in business (oligarchs, I believe you call them) are out to get us. To the contrary, those who build successful businesses also build wealth for all of us by providing jobs and the ability for small businesses to grow up to supply and serve them. Capitalism is the only economic system which speaks of the creation of wealth rather than its distribution. Without wealth being built, there would be none to distribute!
To look at some of your assumptions, the GI Bill provided services for those who served our country. Social Security should be privatiized as suggested by the G W Bush administration, though it came about at a time that was uncharted waters in this country. Medicare, as discussed earlier, is rife with corruption and could be better managed by the private sector. Medicaid suffers under many of the same problems as Medicare. You seem to imply that anyone who does not support government involvement in the medical care field would immediately undo established government programs on the basis of philosophy alone. I favor some major changes to many of the programs you cite, but I recognize that upheavel in society would result in doing it very rapidly, and I beleve the outcry against Obamacare proves that.
James Hill
20 Aug 09 at 3:19 pm
I find it interesting that those of you on the left are so quick to jump to conclusions about how limited a government those of us on the right want. I am not one of those conspiricacy theorists who believes that those terrible people who have been succesful in business (oligarchs, I believe you call them) are out to get us. To the contrary, those who build successful businesses also build wealth for all of us by providing jobs and the ability for small businesses to grow up to supply and serve them. Capitalism is the only economic system which speaks of the creation of wealth rather than its distribution. Without wealth being built, there would be none to distribute!
To look at some of your assumptions, the GI Bill provided services for those who served our country. Social Security should be privatiized as suggested by the G W Bush administration, though it came about at a time that was uncharted waters in this country. Medicare, as discussed earlier, is rife with corruption and could be better managed by the private sector. Medicaid suffers under many of the same problems as Medicare. You seem to imply that anyone who does not support government involvement in the medical care field would immediately undo established government programs on the basis of philosophy alone. I favor some major changes to many of the programs you cite, but I recognize that upheavel in society would result in doing it very rapidly, and I beleve the outcry against Obamacare proves that.
The American Revolution would not have happened without support from most levels of society. The Boston Tea Party would not have happened without the tea tax passed by the British Parliament. I am glad that this country did expand to the West, but the Revolution was brought about by tax policy of the Crown.
Oh, before you theorize that I am some weathy oligarch, I am a 62 year old who has a family and has never made more than $40000 a year. I am a Republican who served in my state’s House of Representatives for 10 years. I am simply an average citizen who studies political issues, looks at the philosophical underpinnings of same, and measures them against my own philosophy of government and decides whether or not to support them.
James Hill
20 Aug 09 at 3:26 pm
I appreciate the dialog I also am interested that because I favor limited government you seem to assume that I am a right wing extremist. I am a proud Republican who served ten years as a member of my state’s House of Representatives. I am a conservative and somewhat of a pragmatist. I understand the political process and do not believe it possible to restructure our society by ditching the programs you assume that I disdain. I agree with the G W Bush administration that social security should be privitized, and I am glad that public schools are being challenged by public charter schools, but I am a product of public education. Medicaid and Medicare both have been plagued by inefficiency and corruption, and I would rather the private sector oversee it because I am certain they would do a superior job. The VA has had its problems, and the conditions at Walter Reed Hospital were examples of those problems.
I simply do not believe, as you seem to, that corporations run by “oligarchs” control this country. Indeed, they are the fruits of a capitalist society which has produced more wealth for more people, by far, than any other system. In fact, capitalism is the only economic system that speaks of creating wealth rather than distribution of wealth. Thank God (or whoever you wish) for it!
The American Revolution could not have been fought, much less won, without broad support of all clasees of people. You believe the manifest destiny club, as I believe you call them, manipulated the people into that revolution. To use a phrase one of my best history professors used, poppycock. The imposition of taxes by the British government without representation of the colonies sparked not only the war, but also the declaration of independence.
Before you theorize that I am one of the powerful oligarchs who manipulate the rest of us, I am a 62 year old man, married, the father of four and grandfather of four who has never made more than $40000 in any one year. I keep abreast of political issues, determine the philosophical underpinnings of them, match that to my own admittedly conservative philosophy, and decide whether or not to support it. I welcome the examination of the issues as we go into the 2010 and 2012 election cycles. I believe the “right” shall prevail.
James Hill
20 Aug 09 at 9:09 pm
James:
The Gini Coefficient has been rising for many years. Income inequality is rising. Seventy-five percent of income gais during the Bush Administration went to the top 1% of “earners.” Earnings on investments are taxed at a rate less than earnings from work. Why is that so? Why should human labor be taxed higher than investment earnings? Is that compassionate conservatism?
Employer-offered insurance is steadily declining. The current health insurnce system is particularly hard on small businesses. Large businesses, due to economies of scale, have a huge advantage over the sole proprietor of small business, who, increasingly can’t afford to offer employees insurance.
Do you know what the top tax bracket is now? 36-percent. You know how much Obama wants to raise it? 39-percent. You know what it was during the Eisenhower Aministration? 80-percent.
We do agree on something, however. You said,
“Capitalism is the only economic system which speaks of the creation of wealth rather than its distribution. Without wealth being built, there would be none to distribute!”
No argument there. I’m a big fan of small business. Among the OECD nations, the U.S. ranks next to last in the percentage of workers who work for small businesses. Hello Walmart. Hello Micky Deez.
John Freeland
20 Aug 09 at 9:45 pm
I would say thank goodness the McDonalds and Wal-Marts of the world exist to provide the number of jobs that they do. The true definition of wealth is what standard of living is bought by the wages earned, and I would submit that the “average” worker in the US does not fare too badly.
James Hill
21 Aug 09 at 10:10 am
I would say thank goodness the McDonalds and Wal-Marts of the world exist to provide the number of jobs that they do. The true definition of wealth is what standard of living is bought by the wages earned, and I would submit that the “average” worker in the US does not fare too badly. The fact that some live even better, even a lot better, is, I think, a testimony to the fact that those who take risks sometimes reap rewards consumate to the risk taken. The percentage of income paid by the top brackets has declined, and that allows those with deep pockets to invest more into job providing, wealth providing enterprises.
My wife and I owned a small business for many years, a telephone answering service, so I, too, am supportive of small business. I believe my voting record in the House would back that up. The laws that apply to business, any limitations placed upon them in general, affect both large and small businesses. While I concede that protection from monopoliys must be provided by government, I do not believe business, small or large, should be hamstrung by over regulation by government.
As an aside, I look forward to the comparason of the philosophies of the right and those of the left as we move into the 2010 and 2012 election cycles. I believe that the “right” shall prevail!
James Hill
21 Aug 09 at 10:18 am