Thursday, November 19, 2009

Senator Reid Releases Bill

At over 2000 pages, Senator Reid gets the prize for volume. He may also get the prize for quality.

I've read all of the portions of the Bill that directly affect patients (skimming sections on things like data collection and health care workforce development), and I'm impressed by how good a job Senator Reid seems to have done at synthesizing the Senate HELP Committee and Senate Finance Committee Bills, while also anticipating some of the differences between the Senate and the House versions.

As is true of all the plans, Senator Reid's would eliminate pre-existing condition exclusions, cancellations of policies based on health status, lifetime maximums, or premium rating based on health history or gender. Also as in all of the other plans, an insurance "exchange" will be established where you can shop for insurance, see the available alternatives, and weigh your options. Among the options is a public option -- a plan run by the government that will be available as an alternative to private insurance if the patient chooses -- that will allow states to opt-out if they wish. In addition, the Bill would allow the creation of nonprofit co-ops. Further, states can create a program for low income individuals not eligible for Medicaid, and Medicaid is expanded to include anybody with income up to 133% of the federal poverty level. Multi-state compacts are permitted, along with nationwide plans with state opt-outs.

While most of the changes will be effective in 2014 (one year later than the House plan), immediately, there will be a national high risk pool for people with pre-existing conditions who have gone without insurance for at least 6 months.

There are limits on out-of-pocket costs -- deductibles are limited to $2000 for an individual and $4000 for families. Other cost sharing -- copays and coinsurance -- are limited to the same limits as apply to health savings accounts -- right now, according to the IRS website, $5600 for an individual and $11,2000 for a family. These out of pocket limits are decreased on a sliding scale for people with incomes below 400% of the federal poverty level. There are tax credits that are calculated based on a formula that, frankly, is so complicated that I can't tell you what it means, but it is tied to (1) the cost of plans in the Exchange; and (2) household income. People with incomes up to 400 percent of federal poverty level would be eligible for a tax credit. Premiums are capped at 9.8 percent of income.

Individuals would be required to have insurance, but the penalty for not doing so is very small, starting at $95 per year, and increasing over time to $750. There is no requirement that employers provide insurance, but employers with 50 or more employees will have to pay a fee of $750 for each employee who is not covered who receives a tax credit. There also is a small employer tax credit for employers with 25 or fewer employees.

Medicare improvements include a reduction of the "doughnut hole" by $500 and 50% discounts on name brand drugs for low and middle-income consumers. Rates paid to Medicare Advantage Plans are decreased to match what the government pays for the same coverage.

In addition, there is a mandatory appeal process, including both internal and external appeals, applicable to all plans included in the Exchange, and there will be a uniform appeals process for Medicare Part D plans.

To pay for the plan, there will be a series of taxes. First, so-called Cadillac plans -- plans that cost more than $8500 for an individual and $23,000 for a family -- are taxed at 40%. Further, the Medicare tax will increase from 1.45% to 1.94% for people with income over $250,000. In addition, there are the penalties mentioned above for failing to obtain insurance, and for employers who don't cover employees who get tax credits. In addition, there is a 5% tax on elective cosmetic procedures -- procedures necessary to correct congenital deformities and so on are not subject to tax. in addition, every health insurance policy and every health insurance plan, including self-funded plans, will pay $2 per covered person.

Those are the highlights. It's very similar to the House bill in many respects, although the House has a so-called millionaires tax, larger penalties for individuals who don't buy insurance, and larger penalties on businesses who don't provide insurance.

There are, of course, some sticky issues remaining. Rather than prohibiting all plans in the exchange from covering abortions, even with the woman's own money, the Senate version segregates the federal money from private money and allows insurers to cover abortions as long as the woman's own money is used. Illegal immigrants are not covered at all.

That's the summary. Of course, you are welcome to read the whole thing here. There's also an excellent comparison of the House and Senate versions by the NY Times here.

Please note that I will be taking a short break from blogging. I'm having a small hernia repair tomorrow. It's not a big deal, but I'll be out of commission for as long as I'm on pain meds and could say something stupid!!! Take care of yourselves in the meantime. Jennifer

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