I put this together for a friend, but there’s no reason not to share it here. He’s a primer on the bill the House just passed:
COVERAGE AND PREMIUM REFORM
1) Medicaid eligibility will be expanded to 150% of the poverty line (The Senate will likely be 133%). Those on Medicaid generally do not pay premiums, and co-payments are usually a max of $3 for most services. Medicaid covers a broad range of stuff and does a good job for low-income people, who are more likely than people with higher incomes to be in fair health or worse.
2) Subsidies for premiums. Those above 150% of the poverty line (the Medicaid limit) but below 400 percent of the poverty line would get help to purchase health insurance in the exchange. An example: a family of three earning $32,000 (175 percent of the poverty line) would have to pay only $1,360 a year (in 2009 costs), compared to $2,013 a year under the Senate Finance Committee bill.*
3) Caps on out of pocket spending. This is also on a sliding scale up to 400% of the poverty line. The same family of three earning $32,000 would have to pay only $2000 in co-pays and deductibles; with the Finance Committee bill, the maximum might be twice as high.
*However, a family of four making $88,000 would have to pay up to 12% of its income in premiums, and still face $1,500-per-person copays and total possible costs of $10,000 per year. That’s a lot (but still better than the Senate).
4) Individual mandate. You buy insurance or pay a penalty of 2.5 percent of income. Individuals can get hardship exemptions. The mandate is actually stronger than the Senate Finance Committee version.
5) Employer mandate. Employers have to offer coverage meeting certain standards or pay a fine that’s a percentage of their payroll. Most small employers are exempt. This will result in something like 6 million more people having employer based coverage, so it’s nothing to sneeze at.
MEDICARE REFORM
1) No more extra payments to Medicare Advantage. We’re overpaying by 14% or $1100 per old person. No more.
2) We can now let Medicare negotiate drug prices with pharma. This is huge and goes against the promise the White House made to pharma. It will be used to close the doughnut hole.
3) Reimbursement reforms. They’re going to try and implement accountable care organizations and pay for quality not quantity. I have little faith this will work.
REFORMS TO INSURANCE MARKET
1) Insurers can’t deny coverage for pre-existing conditions.
2) Premiums would have a narrow range. The most a company could charge for one person compared to another based on age or tobacco use could be only a maximum of twice as much. In the Senate Finance Committee bill that ratio could be much more.
3) Maximum lifetime out-of-pocket costs and NO maximum lifetime benefit.
4) There will be a minimum package of benefits that will be considered mandatory. The criteria are tighter than in the Senate Finance Committee bill to prevent cherry picking.
5) These rules apply to all new policies and eventually all employer-sponsored policies as well.
6) The exchange. This is for individuals and to small businesses in every state. States could substitute their own exchanges if they obtain approval from the federal government, comply with all federal requirements, and show that they can do the job adequately. Theoretically, the exchange help people to make informed choices and find a good plan. By year three, it should also apply to businesses with up to 100 workers that wish to use it. Eventually, everyone might get there.
7) Public Option. It’s national, but restricted in who gets in. And it needs to negotiate with providers. Maybe we get 6-10 million in it. It probably won’t get the cost savings many think it will. The CBO agrees with me.
TAXES
1) A 5.4% surtax on couples making more than $1,000,000 a year and individuals making more than $500,000 a year. Brings in more money than you’d think.
THE STUPAK AMENDMENT
1) Basically, if you get a subsidy to purchase insurance, that insurance can’t cover abortions. This will not apply to those with employer based coverage. This is especially bad, since it means that we will have to hope that insurance companies will offer dual plans in the exchange (with and without abortions) so that those in the exchange not getting subsidies will be able to get insurance coverage for abortions. Some think insurance companies won’t go to the trouble since most people will be getting subsidies. Abortions can cost up to about $1000 in the first trimester.
(Helpful source: Center on Budget and Policy Priorities)
