HELP passes healthcare bill
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Under the AHCA insurance reforms, no American can be denied health coverage because of a preexisting medical condition or be subject to annual or lifetime limits on their coverage. Moreover, the bill will attempt to reduce healthcare costs through stronger prevention and use of IT. It also aims to root out fraud and abuse, reduce unnecessary procedures and create a system that allows everyone to obtain insurance thereby gaining access to doctors, medication and procedures essential for prevention and disease management.
In order to meet the need to provide health insurance coverage to nearly 50 million uninsured Americans, the AHCA requires those businesses which do not provide coverage for their workers to contribute to the cost of providing publicly sponsored coverage for those workers. It includes an exception for small businesses.
The smallest businesses (payroll that does not exceed $250,000) will be exempt from the employer responsibility requirement. A payroll penalty would then phase in starting at 2 percent for firms with annual payrolls over $250,000 rising to a 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.
The bill also includes a public healthcare insurance Community Health Insurance Option that will be available through the American Health Benefit Gateway, a new way for individuals and small employers to purchase affordable health insurance in every state.
A new Health Insurance Exchange will seek to create a transparent marketplace for individuals and small employers to compare private and public insurers. It would work with state insurance departments to set and enforce insurance reforms and consumer protections, facilitate enrollment and administer affordability credits to help low- and middle-income individuals and families purchase insurance. Over time, the Exchange would be open 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 new independent Advisory Committee with practicing providers and other healthcare experts, chaired by the Surgeon General, would 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, pediatric oral health and vision and caps the amount a person or family spends on covered services in a year.
Under the bill, health insurers offering group or individual policies would be required to publicly report the percentage of total premium revenue that is expended on clinical services, quality and all other non-claims costs as determined by the Secretary of Health and Human Services.
According to the AHCA authors, to ensure that all Americans have affordable health coverage the bill will:
- Provide sliding scale affordability credits: The affordability credits will be available to low- and moderate- income individuals and families. The credits are highest 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. The Exchange administers the affordability credits with other federal and state entities, such as local Social Security offices and state Medicaid agencies.
- New policies will set a cap onout-of-pocket spending to prevent bankruptcies from medical expenses.
- Provide for increased competition: The creation of the Health Insurance Exchange and the inclusion of a public health insurance option will make health insurance will open many market areas to new competition.
- Expand Medicaid: Individuals and families with incomes at or below 133 percent of the federal poverty level will be eligible for an expanded Medicaid program. Recognizing the budget challenges in many states, the expansion will be fully federally financed. To improve provider participation in the safety net, reimbursement rates for primary care services will be increased with federal funds.
- Improve Medicare: Senior citizens and people with disabilities will benefit from provisions that fill the "donut hole" in the Part D drug program, eliminate cost-sharing for preventive services, improve the low-income subsidy programs in Medicare and fix physician payments. The bill extends the solvency of the Medicare Trust Fund.
Health insurance policies will be required to include financial incentives to reward the provision of quality care that include case management, care coordination, chronic disease management, wellness and health promotion activities, child health measures, activities to improve patient safety and reduce medical errors, as well as culturally and linguistically appropriate care.
To address the concerns of legislators that enactment of the Community Health Insurance Option will force Americans into a government-run healthcare system, the bill states that "there is no requirement that an individual must terminate his or her coverage in a plan in which the individual was enrolled prior to enactment of this Act. Family members, new employees, are able to enroll in health plans operating prior to enactment."
Remarking on the bill's passage by the Committee, HELP Chairman Sen. Edward M. Kennedy, D-Mass., said, "We know, however, that our work is not over--far from it. As we move from our committee room to the Senate floor, we must continue the search for solutions that unite us."