National View

 

Five Immediate CONSUMER BENEFITS

under Health Reform 

  1. Stops insurance companies from denying care based on “pre-existing conditions.” 
    • Immediately people who are uninsured due to a pre-existing condition can buy insurance through a special insurance program
    • Within 6 months of passage, no new health plan can discriminate against children with pre-existing conditions.
    • In a few years, no insurance plan can deny coverage to anyone for pre-existing conditions.
  1. Stops some of the worst insurance company abuses. Insurance companies can no longer:
    • Cancel insurance coverage retroactively when you get sick (rescission)
    • Put lifetime limits on the dollar value of benefits
  1. Expands coverage and care for the uninsured and people with insurance:
    • Allow young adults up to age 26 to stay covered on their parents’ insurance
    • Offer free preventive benefits in new plans
  1. Reduces prescription drug costs for seniors. Seniors whose spending falls into Medicare’s prescription drug donut hole will have hundreds of dollars of immediate help and the entire coverage gap will be eliminated over time.
  1. Saves money for small businesses. Small businesses choosing to offer coverage to workers will receive a tax benefit of up to 35% of premiums.
 

And these steps lay the groundwork for covering an additional 31 million uninsured Americans so that –

    • For example, a family of 3 earning $37,000 would pay less than $200 per month for good health insurance for the entire family. The family’s out-of-pocket costs would be limited, too, so even if someone in the family faced a serious illness, they would not have to pay more than $4,000 in out-of-pocket expenses.

 

Summary of the Democratic Health Reform Legislation

    Senate-passed Health Reform Bill (H.R. 3590) and Reconciliation Bill (H.R. 4872)  
     

IMMEDIATE IMPROVEMENTS (2010)

  • Help getting coverage: New coverage options for people with pre-existing conditions; a website to help identify coverage options in each state; uniform policy documents to make it easier to shop for coverage.
  • Help keeping coverage: Prevents insurers from dropping people from coverage (rescissions); extends dependent coverage to age 26.
  • Help paying for coverage: Eliminates lifetime and unreasonable annual benefit limits; caps insurance profits and overhead expenses; initiates a temporary reinsurance program for early retirees.

AFFORDABLE COVERAGE

  • Coverage options:
    • Keep the plan you have, whether it’s through your employer or purchased individually.
    • Get coverage through your employer. If a large employer fails to offer coverage that meets basic standards, and an employee accesses health insurance tax credits through an exchange, the employer pays a fine of $2,000 for each full-time employee. If an employer offers coverage that is unaffordable, the employer pays a fine of $3,000 per full-time employee receiving credits. Part-time workers’ hours are calculated in determining which firms qualify as large employers.
    • Get coverage in an exchange, choosing from multiple plans at four different levels of coverage, using sliding scale premium assistance tax credits for families up to 400% FPL. The Exchange is open to individuals without other coverage and businesses with up to 100 workers and includes private plans and, unless your state intervenes, a new public health insurance option.
    • Get coverage outside an Exchange from regulated plans that can’t discriminate based on health status or other health-related factors.
    • Expanded Medicaid eligibility to persons with income under 133% FPL.
  • Secretary of HHS defines a package of “essential health benefits” to be covered in individual, small group, and exchange plans.
  • Existing health insurance coverage is protected through a “grandfather” provision; plans need to come into compliance with consumer protections over time.
  • Immigrants: All legal residents eligible for assistance with premiums and cost-sharing through the exchange. Retains five-year wait for Medicaid benefits for adults. Undocumented persons are ineligible to purchase coverage in the exchange or to receive premiums assistance credits.

LOWER COSTS

  • No more deductibles or co-pays for preventive care in all new health plans.
  • An individual will not pay higher premiums based on pre-existing conditions, gender, or occupation. Higher premiums based on age are still allowed but limited.
  • Place annual cap on out-of-pocket expenses and prohibits deductibles greater than $2,000 for individuals and $4,000 for families in small business plans.
  • Closes the prescription drug donut hole for Medicare beneficiaries by 2020, starting with a $250 rebate to beneficiaries who hit the donut hole in 2010.

SHARED RESPONSIBILITY

  • Large employers that do not offer coverage will contribute $2,000 per year per full-time employee if any employee is eligible for subsidies. The payment amount is $3,000 per full-time worker that is eligible for a subsidy in the exchange due to an offer of inadequate coverage from the employer. For the purpose of determining which firms qualify as large employers, part-time workers’ hours are calculated as full-time equivalents, based on a 30-hour full-time work week. For large employers, 30 employees are disregarded from the calculation of the penalty.
  • Beginning in 2014, all legal residents required to have health insurance or pay a penalty. The penalty is the greater of a flat amount or a percentage of income. The full contribution for people without insurance (beginning in 2017) is the greater of $695 (individual)/$2,085 (family) or 2.5% of household income. This contribution is phased in beginning with $95 or 1% of income in 2014. Exemptions are granted for families with income below the tax filing threshold ($18,700 for a married couple) and for other hardship reasons.

ACHIEVING EQUITY IN HEALTH OUTCOMES

  • Invests in the primary care workforce, with bonuses to providers practicing in provider-shortage areas.
  • Increases the diversity of health professionals and strengthen cultural competence among all providers.
  • Additional funding for needed data collection and research that helps to identify and eliminate disparities.
  • Begins a national strategy to improve health care quality, patient outcomes, and population health.

FUNDING SOURCES

  • Beginning in 2018, taxes health benefits that cost more than $27,500 for a family policy or $10,200 for an individual policy, excluding dental or vision coverage. The thresholds are adjusted for firms with higher benefit costs due to age, gender or occupation and will rise over time at a rate of inflation.
  • Beginning in 2013, raises the Medicare Hospital Insurance (HI) tax for high-income taxpayers ($200,000 individuals; $250,000 families) by 0.9% and broadens the Medicare HI tax base by adding a 3.8% tax on investment income, excluding distributions from retirement accounts, for individuals with incomes over $200k and family income over $250k.

 

Key Implementation Benchmarks of Senate Bill

 

 

2010

 

·       Access to high-risk pools, regardless of pre-existing health conditions.

·       Small business tax credits to assist small, low-wage firms purchase health insurance for employees.

·       Immediate elimination of pre-existing condition exclusions for children.

·       Prohibition on rescissions and restrictions on lifetime and annual benefit limits.

·       First dollar coverage of preventive services in individual and group coverage.

·       Extension of dependent health coverage to children up to age 26.

·       Reduction in the cost of early-retiree coverage with a temporary reinsurance program.

 

2011

 

·       Health plans must begin reporting on the share of premiums that go to medical care and provide rebates when too much of the premium is used for other expenses.

·       Increased preventive care: A free annual wellness visit will be covered by Medicare and cost-sharing for preventive care will be eliminated. Incentives for Medicaid to expand coverage of evidence-based preventives services.

 

2012

 

·       Additional health care quality improvements: Encouraging integrated care through accountable care organizations, linking provider payment to quality outcomes, and reducing avoidable hospital readmissions.

 

2013

 

·       Health plans adopt simplification procedures to reduce paperwork and administrative burdens.

·       Limits on health insurance executive compensation.

·       Additional Medicare HI tax on high-income households.

 

2014

 

·       Insurance market reforms require guaranteed issue and renewal of policies and prohibit discrimination based on pre-existing conditions, health status or gender.

·       Health insurance exchanges open to serve as a marketplace for consumers to purchase insurance.

·       Health insurance tax credits begin.

·       Americans are required to obtain coverage and large employers pay a fine if they do not offer coverage to full-time workers.

·       Medicaid expands to include everyone with income below 133% FPL.

 

Confused by everything that's going on in DC?

The Kaiser Family Foundation has a great tool for comparing all the health plans Congress is considering.

 

A great health policy blog is the health care blog.