Insight, analysis & opinion from Joe Paduda

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Jul
15

The House Health Reform Bill – just the highlights

That big thud you heard yesterday was the 1,018 pages of the House Health Reform bill hitting the table. America’s Affordable Health Choices Act of 2009 marks the first real, vote-able comprehensive health reform bill in sixteen years. While there is much to complain about, the fact that it made it this far pretty much complete is big news.
There’s still much to do, as the committees with jurisdiction (three at last count) still have to vote on the measure,
Here are the highlights:
– It builds off the current employer-based system, adding an Insurance Exchange to enable those without coverage to gain access to insurance. Subsidies are available u to 400% of the federal poverty limit ($43,000 for individuals, $88k for a four person family)
– Medical underwriting, pre-ex exclusions, lifetime benefit limits, and other risk selection/mitigation tools are banned.
– A modified version of Community rating is mandated, with rates varying only by age (max of 2:1), location, and family size.
– Minimum benefit design standards will be set by an Advisory Committee chaired by the Surgeon General.
Half the funds to pay for the bill would come from a surtax applied to any adjusted gross income exceeding $280,000 a year for an individual and $350,000 for a couple filing a joint return, with tax rates ranging from 1 percent to 5.4 percent. The tax would take effect in 2011, with a family making $1 million paying an additional $9,000, and one making $500k paying $1500 more. 1.2 percent of families would be affected.
– Essentially all employers would be required to provide health insurance for their employees or pay a penalty of eight percent of wages.
– The CBO estimates the bill would cover an additional 37 million people, leaving about 9 million Americans (and an estimated 8 million illegal immigrants) without coverage.
– The bill includes a public option plan that would begin operation in 2013, with physicians paid at Medicare plus 5 percent, and other providers at Medicare rates.
– The Medicare Advantage subsidies are eliminated.
– The Medicare SGR (physician payment calculation process) is ended and reimbursement for primary care increased.
What does it mean?
First, know this bill isn’t going to become the law of the land in its present form.
Second, watch for the reaction of moderate Democrats (the Blue Dogs), especially those in the Senate. Heads-up – talking about the bill, Sen Ben Nelson (D NE) said “Tax is a four-letter word”…
Third, the horse trading is about to ramp up to fever pitch; if stakeholders start believing reform may actually pass, they are going to renew their efforts to be ‘part of the solution’, also known as ‘do it to yourself before Congress does it to you’.
Want to read the entire bill? Have at it… For those less ambitious, try the summary.


Joe Paduda is the principal of Health Strategy Associates

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A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.

 

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