September 24, 2009
This Week in Health Reform
Federal Legislative Overview
The big show on Capitol Hill last week was in the Senate Finance Committee. After months of bipartisan negotiations, Committee Chairman Max Baucus (D-MT) released his health care reform Chairman’s Mark on Wednesday, September 16th. The legislation, titled “America’s Healthy Future Act of 2009,” will cost $856 billion during the next ten years, according to the Congressional Budget Office (CBO).On Thursday, September 17, there was a bipartisan walkthrough of the legislation. Amendments to the mark were due by Friday, September 18. Opening statements for the “markup” of the bill were on Monday, September 21 and “markup” began in earnest on Tuesday, September 22.
Much to the dismay of the bipartisan “Gang of Six” – who spent months in deep negotiation over the Committee’s health reform legislation – the bill was released without any Republican support at the outset; and some Democrats were also cool toward the proposal.
Speaker of the House Nancy Pelosi (D-CA) still faces a push and pull between liberal and conservative Democrats in the House over its health care reform legislation, although in recent days she released a statement reaffirming her support for a public option.
Overview: “America’s Healthy Future Act”
As mentioned above, Senate Finance Committee Chairman Max Baucus (D-MT) released the official health care reform Chairman's Mark. Key provisions of the bill are discussed below.Co-Ops will be created instead of a government-run health insurance plan – to foster new, non-profit, member-run health insurers to serve individuals in one or more states.
- Co-Ops would compete in the individual and small group market.
- Federal loans will be provided for the Co-Ops' start-up costs and federal grants will be given to meet state solvency requirements.
- Insurers are prohibited from being designated as Co-Ops.
- There must be at least one Co-Op in each state.
State-based Exchanges will be created.
- All private insurers in the individual and small group markets that operate nationally, regionally, statewide, or locally must be available in the newly established state exchanges, if the insurers are licensed by a state (i.e., a state has determined that the plans meet all the market-reform requirements). .
Insurance Market Reforms:
- Beginning in 2013 – Guaranteed issue regardless of pre-existing conditions, coupled with an individual mandate.
- Requires community rating with adjustments allowed only for:
- Tobacco use – 1.5:1
- Age – 5:1
- Family composition: Single – 1:1; Adult with child – 1.8:1 ; Two adults – 2:1; Family – 3:1
- Total rating adjustments cannot exceed 7.5:1.
Financing:
- Tax on Insurance Companies:
- The legislation features a tax on insurance companies based on market share. This tax is designed to raise $6 billion per year beginning in 2010.
- Excise Tax on “Cadillac” Insurance Plans – imposes a 35 percent excise tax on the value of health insurance plans greater than $8,000 for individuals and $21,000/family. This tax applies to insured and self-funded plans in the group market, but not to plans sold in the individual market.
The CBO estimates the Senate Finance Committee’s Chairman’s Mark will reduce the federal deficit by $49 billion during the next 10 years.
To read the Finance Committee’s legislation and the CBO report in full, please visit the Finance Committee’s Web site at: http://finance.senate.gov/sitepages/baucus.htm.
Archives of: Past Week in Health Reform
9/18/09 - This week on Health Care Reform
9/11/09 - This week on Health Care Reform
