Last night, Senate Majority Leader Harry Reid (D-NV) released the Patient Protection and Affordable Care Act, which merged the Senate’s Health, Education, Labor and Pensions (HELP) Committee’s bill with the Finance Committee’s bill. According to preliminary analysis from the Congressional Budget Office (CBO), the joint legislation will cost $848 billion over 10 years and reduce the deficit by $130 billion over the next decade. The bill includes an individual requirement to purchase health insurance coverage for legal American residents, provides affordability credits for individuals and families between 133 percent and 400 percent of the federal poverty line, establishes state-based exchanges to help Americans find appropriate coverage, expands the Medicaid program for lower-income Americans, provides a tax credit to small businesses that continue to offer health insurance coverage and invests $15 billion in a Prevention and Public Health Fund. Individuals and families will also have the option of enrolling in a national public health insurance plan, and states can choose to opt out of the program by passing legislation. To lower the rate of growth in national health care spending, the bill establishes an Independent Medicare Advisory Board — which is required to "recommend changes to the Medicare program to limit the rate of growth in that program’s spending" — and places a 40 percent excise tax on insurers that offer expensive policies. Under the bill, the spending of each Medicare beneficiary would decrease, as compared to the growth rate of the past two decades. Moreover, the Senate bill makes important investments in long-term care through the Community Living Assistance Services and Supports provisions and expands the life of the Medicare trust fund by up to five years. To finance reform, the bill raises the payroll tax by 0.5 percent on individuals who earn more than $200,000 and families earning more than $250,000 a year, imposes industry fees, and cuts waste from Medicare and Medicaid. By 2019, the bill reduces the number of Americans without insurance by 31 million Americans and covers 94% of all legal American residents.
AFFORDABLE AND ADEQUATE HEALTH INSURANCE: While the exchanges don’t open until 2014, the bill offers immediate insurance reforms for Americans purchasing coverage in the individual market. Insurers would no longer be allowed to rescind coverage or impose life-time or annual limits and would be required to meet a medical-loss ratio of 85 percent. Individuals or families who are denied coverage because of a pre-existing condition would participate in a national high-risk pool program until the Exchange is established. Young Americans can stay on their parents’ policies until they turn 26 and small businesses will receive a tax credit to help them afford health insurance coverage. Once the Exchanges are established, insurers could no longer deny coverage based on pre-existing conditions and could only charge older Americans only three times as much as younger individuals for the same coverage. Families and individuals below 133 percent of the federal poverty line would qualify for Medicaid coverage, while Americans between 133 percent and 400 percent would not pay more than 2 to 9.8 percent of income on premiums. Out-of-pocket spending would also be limited. Employers with more than 50 full time workers would not be required to offer health insurance coverage, but would be expected to pay a fine if their employees receive affordability credits through the Exchanges.
THE OPT-OUT PUBLIC OPTION: The CBO estimates that the national opt-out public option would attract approximately 3 to 4 million Americans by 2019, and 17 states would pass legislation to leave the program. "The legislation would require that the premiums for the public plan be set to fully fund expenditures for medical claims, administrative costs, and a contingency reserve," the budget office report notes. The federal government, moreover, would provide "start-up funding for the administrative costs associated with establishing the public plan and require that those funds be paid back in amortized amounts over 10 years." Under the bill, the Secretary of Health and Human Services would negotiate reimbursement rates with physicians and the plans’ premiums may be somewhat higher because the public option "would probably engage in less management of utilization for its enrollees and attract a less healthy pool of enrollees," the budget office concluded.
ABORTION AND IMMIGRANTS: The bill eschews the restrictive language of the Stupak abortion amendment and preserves much of the more moderate Capps-abortion compromise. Under the merged Senate bill, federal dollars could be used only to pay for abortions wh
en the pregnancy threatens the life of the mother or results from rape or incest; private premiums would be used to pay for any other type of abortion, including those for health reasons. Each plan in the Exchange would decide whether to cover additional abortion services and at least one plan in each market must offer abortion services and one plan must not. In the public option, the Secretary of Health and Human Services can cover abortion only if the procedure is financed with private funds. The bill also preserves the Senate Finance Committee’s verification requirements for anyone who applies for coverage in the Exchanges. Undocumented immigrants would be ineligible for government subsidies and could not purchase coverage within the Exchanges. For individuals who claim to be citizens, the government would verify the applicant’s name, Social Security number, and date of birth with Social Security Administration data. For individuals who do not claim to be U.S. citizens but claim to be lawfully present in the United States, the government would verify their information with the Department of Homeland Security.
via The Progress Report