Tuesday, July 14, 2009

House healthcare reform bill introduced

It was a big day on Capitol Hill as the House leadership introduced H.R. 3200, its 1,018 page long America's Affordable Health Choices Act of 2009. The House fact sheets are available here. Business Insurance explains that

Under the proposal, employers would have to pay 72.5% of the premium for
individual coverage and 65% of the premium for family coverage. In addition,
health care plan enrollees with individual coverage could not be required to pay
more than $5,000 per year in out-of-pocket expenses, while such expenses would
be capped at $10,000 for enrollees with family coverage.

Preventive services would have to be covered without any employee cost-sharing. In addition, employers could not restrict coverage for new employees with pre-existing
medical conditions.

Most employers that fail to meet these requirements would be hit with a penalty equal to 8% of pay for each employee they did not offer coverage. However, employers with an annual payroll of $250,000 or less would be completely exempt from offering coverage or paying an assessment.For employers with more than $250,000 in annual payroll, the penalty would beginat 2% of payroll, rising to the full 8% penalty for employers with annual payrolls above $400,000.

Individuals who did not enroll in a health care plan, except those who could demonstrate financial hardship, would be hit with new taxes, based on their annual income.The proposal, though, would provide federal health insurance premium subsidies for those with adjusted annual gross incomes of up to 400% of the federal level. It also would create state health insurance exchanges for individuals and small employers—which could shop for coverage offered by private insurers—as well as a new public plan. Eventually, the exchange would be available to large employers.

In addition, the proposal would reimburse—through a new federal reinsurance program—employers providing coverage for pre-Medicare eligible retirees at least age 55. Under that provision, employers would be reimbursed for 80% of the cost of a claim between $15,000 and $90,000. The measure would be funded in part by a new graduated surcharge on annual income exceeding $350,000 a year. For example, the surcharge would be 1% for families earning between $350,000 and $500,000 and 1.5% for those earning between $500,000 and $1 million.

On my initial read it appears that the health insurance exchange would be implemented in 2013 and that no major changes to employer sponsored health insurance would occur until 2019. The FEHB Program is treated as employer sponsored health insurance coverage under the bill. Reuters reports that the House bill "would reduce the number of uninsured by about 37 million and cost about $1.04 trillion over 10 years, according a [preliminary Congressional Budget Office] analysis."

Over on the Senate side, Modern Healthcare reports that

The Senate Health, Education, Labor and Pensions Committee, which is in the process of wrapping up negotiations on Sen. Edward Kennedy's Affordable Health Choices Act, narrowly approved by a vote of 12-11 an amendment by Sen. Tom Coburn (R-Okla.) that would mandate Congress to enroll in the public option outlined in the bill."
Also according to Modern Healthcare, the Senate HELP Committee included in that bill "an amendment by Sens. Mike Enzi (R-Wyo.), Orrin Hatch (R-Utah) and Kay Hagan (D-N.C.) was eventually approved, granting 12 years of data exclusivity for companies that develop a biological product, meaning that biosimilar or 'follow on' versions of this product may not be approved during this time period. "

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