Saturday, June 20, 2009

House Opens Door to Strong Public Insurance Plan, Improves Medicare;

House Opens Door to Strong Public Insurance Plan, Improves Medicare;
Extensive Measures to Control Costs, Improve Quality, Require a Strong Public Plan

The House Tri-Committee health reform discussion draft includes a number of positive features for coverage, affordability and cost control, while remaining silent on some key issues. The bulk of the bill makes important proposals to improve the quality of care and prevention, but these will have the greatest impact in areas the government can control, such as Medicare. Coverage and financing for the system as a whole remain fragmented, meaning that these proposals will have limited effectiveness on cost controls and quality of care overall.

This projection could change substantially depending on how the public plan is structured. The draft bill proposes to use Medicare reimubursement rates to pay providers, a key feature for cost control. The House should not compromise on this.

The other essential issue is assuring sufficient enrollment in the public plan so that it can do what the private, for-profit insurance industry fears the most: compete fairly. As written, it seems to allow employees to choose the public plan, but does not provide the same level of subsidies to premium payments. The House must complete the bill to strengthen the public plan.

The basic benefits package for the public plan expands Medicare benefits to include maternity and well-baby coverage.

The joint proposal by three House Committees – Energy and Commerce, Education and Labor, and Ways and Means – requires private insurance plans to spend at least 85% on patient care, institutes price negotiation for prescription drugs under Medicare, and these additional features:

All health insurance plans would have to spend at least 85% of revenues on patient care.

Basic benefits include maternity and well-baby care.

A new public insurance plan would have these features:
· Supported through premiums, after federal subsidies for initial start-up costs.
o This could jeopardize the plan’s financial sustainability.
· Reimbursement rates for providers on Medicare, and can vary by 5%.
· Prescription drug prices negotiated by Secretary of HHS
· Innovative payment arrangements with incentives to improve quality, reduce health disparities, address geographic variation in provision of services, prevent or manage chronic illness, provide care that is integrated, patient-centered, quality and efficient.
· No balance billing: providers cannot charge more than established rates.
· Subsidies for premiums and other cost-sharing available to persons at 400% of the federal poverty level.
o This is a reasonable level but needs to be adjusted geographically to address urban areas with high costs of living
o Subsidy not available to individuals who are eligible for an employer-provided health plan that offers similar financial support. However, in this case premium cost limited to 1% to 10% of family income (determined on a sliding scale).

Employers must contribute to the cost of a health plan provided to employees, or pay into the Health Insurance Exchange.
Employers contribute at least 72.5% of the premium for the lowest cost plan.
Must cover full time employees and dependents.
Contributions pro-rated for part-time
Employer self-insured plans qualify as providing coverage (p. 119, Sec, 321)
Penalty for non-compliance is $100/day
Exemption for small employers, not defined (p.151) . Credits for Small Business Employee health coverage expenses (.p.153)

Individual Tax on uninsured (p. 136, Part VIII, Sec. 59B): 2% of adjusted gross income, limited by a formula, and no greater than the annual national average premium.
Exceptions for non-resident aliens, religious conscience
In all other respects, individual responsibility is not defined (Title III, p. 114)

Medicare, Medicaid, VA, Tricare remain. (p. 141)

Interim programs (p.163) to include a reinsurance program to assist early retirees

Medicare and Medicaid Improvements (p.164)
In addition to standard rate readjustments:
Sec. 1151 aims to reduce preventable hospital readmissions
Sec. D Medicare Advantage Plans – eliminates Regional Plan Stabilization Fund
Sec. 1171 Limits out of pocket costs

Subtitle E. Improvements to Medicare Part D
(Earlier sec. of bill authorizes HHS to negotiate rates)
Sec. 1181. Drug manufacturers must provide rebates
Sec. 1182. Closes doughnut hole!!!
Sec. 1184. Benefits for AIDS, Indian Health Service drug programs

Title IV – Quality p.423

full bill online

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