Health Reform:Health Reform:Major Congressional Major Congressional

ProposalsProposalsJoshua Goldberg

State Coverage Initiatives National MeetingAlbuquerque, NM

July 30, 2009

Congressional Action Congressional Action TimelineTimeline

- Finance White Paper – Nov. 2008

- HELP Committee Draft – June 2009- House Tri-Committee Draft – June 2009

- HELP Markup – June 17 – July 15, 2009

Committee Adoption by July 4 Recess -Committee Adoption by July 4 Recess -

Floor Passage by August Recess -Floor Passage by August Recess -

- Hearings and Roundtables

Building Blocks of ReformBuilding Blocks of Reform

Insurance Market ReformsIndividual Mandate / Employer Mandate

Guaranteed Issue / No preexisting conditionsFederal rating rules

No annual or lifetime limitsMinimum benefits package

Health Insurance ExchangeFacilitate plan comparisons and purchase

Low income subsidiesDefined benefit packages

Risk adjustment

Public PlanCompeting against private plans

MedicaidExpansion

133% FPL

HELP CommitteeHELP CommitteeInsurance Market ReformsInsurance 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 (2:1 maximum)– Geography

• No annual or lifetime limits

HELP CommitteeHELP CommitteeHealth Insurance ExchangeHealth 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

HELP CommitteeHELP CommitteePublic PlanPublic 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

HELP CommitteeHELP CommitteeTransitionTransition

• Planning grants to states

• Grandfathering:– Group and individual coverage in effect before

enactment– No new enrollments

House Tri-CommitteeHouse Tri-CommitteeHealth Choices CommissionerHealth 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

House Tri-CommitteeHouse Tri-CommitteeInsurance Market ReformsInsurance 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 (2:1 maximum)– Geography

• No annual or lifetime limits• New federal consumer protection standards

House Tri-CommitteeHouse Tri-CommitteeHealth Insurance ExchangeHealth 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

House Tri-CommitteeHouse Tri-CommitteePublic PlanPublic 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

House Tri-CommitteeHouse Tri-CommitteeTransitionTransition

• Grandfathering– Individual

• No new enrollment• Dependents may be added

– Group• Transitioned to new rules within 5 years

Senate FinanceSenate Finance

• Still awaiting a final document for consideration

• Bipartisan discussions are continuing

Senate FinanceSenate FinanceMarket ReformsMarket Reforms

• Individual Mandate• Guaranteed issue• No preexisting condition exclusions• Adjusted community rating-7.5:1 max

– Age– Geography – Tobacco

• No lifetime or annual limits• 4 tiers of plans

Senate FinanceSenate FinanceHealth Insurance ExchangesHealth Insurance Exchanges

• State-based exchanges– Individual and small group

• Facilitate comparison and enrollment

Senate FinanceSenate FinanceOutstanding IssuesOutstanding Issues

• Financing

• Employer mandate

• Public plan