Likely Options for National Healthcare Plan Taking
Shape in Senate Finance Committee
Senior citizens should not think the new plan will
leave Medicare and Medicaid untouched; Medicare Rights Center sees some
things it likes, and some it doesn't
By Tucker Sutherland, editor & publisher SeniorJournal.com
President Lyndon Johnson signs
Medicare & Medicaid into law with Lady Bird looking over his
shoulder. July 30, 1965
May 12, 2009 – Senior citizens, with health
coverage from Medicare or Medicaid, should not think a new national
healthcare plan will not affect them, just because they are already
covered by a national health plan. The new plan that is finally approved
for all Americans will, most certainly, make changes to Medicare and
Medicaid, as we know them today. Probably the most substantive
discussions and proposals for the new healthcare plan are taking place
in the Senate Finance Committee.
Finance Committee Chairman Max Baucus (D-Mont.)
and Ranking Member Chuck Grassley (R-Iowa)
yesterday released policy options for expanding health care coverage to
the 46 million Americans who are currently uninsured.
The Finance leaders will “walk through” the options
at a Committee meeting on Thursday and solicit thoughts and ideas from
Members on the options for expanding coverage.
The options released Monday are the second of three
papers that members will discuss before a Finance Committee mark-up
of comprehensive health reform legislation in June.
“The paper addresses most of the areas needed for
comprehensive reform: curbs on premium pricing that discriminates
against people in poor health; minimum benefit standards and
transparency that enable consumers to select high-quality coverage,
including a public option; a straightforward, streamlined process that
enables low- and moderate-income people to receive help paying for
coverage; and coverage that works for people with disabilities and other
individuals with special needs,” said a response issued by the Mediare
Rights Center, one of the most active advocates for those covered by
Medicare.
“Unfortunately, the Finance Committee included no
proposals to improve access to programs that help low-income people with
Medicare pay their medical and prescription drug costs,” added Paul
Precht, Medicare Rights Center Director of Policy and Communications.
“The committee proposes to eliminate the asset test
and streamline the application and renewal processes for Medicaid, but
does not remove these bureaucratic obstacles for Medicare Savings
Programs or for Extra Help under the Part D drug benefit.
Finance Committee Chairman Max Baucus (D-Mont.)
and Ranking Member Chuck Grassley (R-Iowa)
“Low-income older adults and people with
disabilities who are struggling to pay medical bills or high
prescription drug costs should also receive the help they need. We must
not waste the opportunity presented by health reform to streamline and
expand access to assistance for low-income people with Medicare.”
“Expanding health care coverage is not just a moral
imperative – it’s an economic necessity,” said Fiance Committee Chairman
Baucus, in the report issued with the minority leader.
“Today 46 million uninsured Americans have few
places to turn for health care besides a hospital emergency room. And
the cost of that care is paid by every American with insurance in the
form of a hidden tax of more than $1,000 a year in increased premiums.
These policy options propose a uniquely American
approach to provide affordable, quality coverage to all Americans
through a mix of public and private solutions, and drive down health
care costs for every American.”
“Millions of Americans have no health insurance and
millions more fear losing what they have,” said Republican leader
Grassley.
“Even people with insurance might be under‐insured.
Congress has an obligation to make insurance more available and more
affordable and still give people the option to keep what they have if
they like it.”
The policy options released today aim to reform the
individual and small group health insurance markets to end
discrimination against sicker individuals. They would instead create a
competitive insurance market where health plans compete on price and
quality rather than the ability to segment risk and discriminate against
individuals with pre‐existing
health conditions.
The options also include an expansion of public
health insurance programs to cover the poorest Americans and make
coverage more affordable by providing tax credits to low income
individuals and small businesses. The policy options make purchasing
coverage easier and more understandable for all consumers.
The policy options for expanding health coverage
follow the release of policy options to reduce costs and improve patient
care in the health care delivery system. The final policy options paper
on financing health care reform will be released before the Members
meeting on that topic scheduled for May 20.
A summary of the policy options for expanding
health care coverage released yesterday is below.
The complete text of the policy options on
expanding health care coverage can be found on the Finance Committee
website at
http://www.finance.senate.gov. To read are download the pdf version
of the options –
click here.
Public comments should be directed to Health_Reform@finance‐dem.senate.gov.
The deadline for public comments on the coverage policy options is May
22, 2009.
Summary of Policy Options for Expanding Health
Care Coverage
Note that mentions of
Medicare & Medicaid in this summary are highlighted in red
Insurance Market Reforms
Americans who like the insurance they have will be
able to keep it in a reformed health care system. But for millions of
other Americans who don’t have or can’t afford employer‐provided
coverage, the insurance market is broken. These individuals and families
can’t purchase coverage because they have a pre‐existing
health condition, or they can’t afford coverage. The policy options
would regulate the individual and small group markets so that coverage
is affordable and accessible for all Americans purchasing coverage.
Individual and Micro group (2-10 employees)
Market Reforms
Under the policy options, insurance companies would
have to issue coverage to all individuals and would no longer be allowed
to bar individuals with pre‐existing
conditions from qualifying for a policy. Limited variation in premium
rates would be permitted for tobacco use, age, and family composition.
Geographic variation in rating would be allowed
between rating areas, but would not differ within a rating area.
Small Group Market Reforms
Under the policy options, the rating rules for the
individual and micro‐group
markets would apply to the remainder of small groups as defined by
states. This would include groups of 11 to 50 people, but could also
include self‐employed and/or
groups up to 100 people depending on current state law.
Health Insurance Exchange
The policy options would make purchasing health
insurance coverage easier and more understandable by using the internet
to present consumers with available plans. The policy options would
create a web portal, or Health Insurance Exchange – or multiple
exchanges – that would direct consumers to every health coverage option
available in their zip code.
The web portal would standardize the health
insurance enrollment application, the format companies use to present
their insurance plans, and the marketing rules. The new web portal would
be publicized and would have a call center for customer support.
The web portal will enable users to determine if
they are eligible for health insurance subsidies or public programs. The
exchange would also allow consumers without access to the internet to
enroll through the mail or in person in a variety of locations.
Eligibility for the Health Insurance
Exchange
Under the policy options, individuals and
microgroups would be able to purchase insurance through the Exchange
immediately following its creation. The remainder of the small group
market (11‐50 employees or
as defined by states) would be able to purchase insurance through the
Exchange once rating rules are fully phased in by that state.
Transitioning to a Reformed Insurance Market
Once the insurance market reforms take effect,
people who want to keep the insurance they have today will be able to do
so. Plans will be allowed to continue to offer the coverage they offer
today, but these grandfathered plans will only be available to those
people who are enrolled today. People who qualify for tax credits in the
reformed market will not be able to use them to purchase these
grandfathered plans. Tax credits will be offered only to purchase plans
created in the reformed market that meet the new, benefit standards.
Transitioning for Rating Requirements
Federal rating rules for non‐group
and micro‐group markets
(other than for grandfathered plans) will take effect by January 1,
2013, perhaps sooner. Federal rating rules for the remainder of the
small group market (as defined by the state) would be phased in over a
three‐to‐ten
year period, as determined by each state, with approval from the
Secretary of HHS.
Making Coverage Affordable
The cost of health insurance has increased five
times faster than wages over the last eight years. And estimates show
that just seven years from now, most Americans will spend nearly half
their income on health insurance. American businesses pay nearly three
times more than our major trading partners for health care benefits.
Unaffordable coverage prevents these companies from competing in the
global market. The policy options make coverage more affordable by
creating tax credits for low income individuals and small businesses and
strengthening public programs.
Options for Standard Benefits
The policy options would create four benefit
categories which would be permissible in the reformed market: lowest,
low, medium, and high. No policies (except grandfathered policies) would
be issued that do not comply with one of the four categories. And all
insurers would have to offer coverage in each of the four categories.
All plans would be required to provide primary care
and first‐dollar coverage
for preventive services, emergency services , medical and surgical care,
physician services, hospitalization, outpatient services, day surgery
and related anesthesia, diagnostic imaging and screenings, including x‐rays,
maternity and newborn care, prescription drugs, radiation and
chemotherapy, and mental health and substance abuse services. Plans
would not be allowed to set lifetime limits on coverage or annual limits
on any benefits.
Individual Health Insurance Tax Credits
Under the proposal, tax credits would be provided
for people with incomes under 400 percent of poverty to help offset the
cost of health insurance premiums. Eligible low‐income
individuals – including employees of small and large businesses – would
be able to use the credit to purchase health coverage through the
Exchange. The subsidy would phase‐out,
providing a smaller credit as income increases.
Small business health insurance tax credits
The policy options would base the small business
tax credit on a firm’s size and average employee earnings. Firms at or
below 10 full‐time employees
with average employee earnings below $20,000 would get a credit equal to
50 percent of the average total premium cost paid by the employer for
employer‐sponsored insurance
in that firm’s state. Under that option, a full time employee would be
one that worked 30 or more hours per week. The credit would phase out as
a firm’s size and average wages increased and would be completely phased
out for firms with more than 25 workers and average employee earnings of
$40,000.
Public health insurance option
The policy options present three alternatives for a
public health insurance option. One alternative is a Medicare‐like
option that would be administered by the Department of HHS. The Federal
government would sets payment rates for that plan. Medicare providers
would participate in the plan. This public health insurance option would
not have solvency requirements.
Another alternative is a public health insurance
option that would be administered through multiple, regional, third‐party
administrators (TPA). These TPAs would be required to report to the
Secretary of HHS. The TPAs would establish networks of participating
medical providers and would negotiate payments for providers
participating in the option. This public option would be required to
adhere to solvency requirements.
A third alternative would be a state‐run
public health insurance option. The policy paper also presents the
option of not creating a public health insurance option, but expanding
coverage through a reformed and better regulated private market.
Medicaid
The policy options would standardize Medicaid
eligibility for all parents, children, and pregnant women below 150
percent of the Federal Poverty Level (FPL) or $33,000 a year for a
family of four. The policy options present three alternatives for these
qualified individuals to access this Medicaid coverage.
The first is Medicaid in its current structure.
Under this alternative, Medicaid would be expanded to cover all
individuals with incomes at or below 115 percent of the FPL. The federal
government would provide short‐term
full funding for newly-eligible Medicaid beneficiaries. Then standard
FMAP rates would be phased‐in
over time.
A second alternative would be for people eligible
for Medicaid to access the program through the Exchange. This
alternative would also expand Medicaid to cover all individuals with
incomes at or below 115 percent of the FPL. And it would also provide
short‐term full federal
funding for newly‐eligible
Medicaid beneficiaries and then phase‐in
standard FMAP.
The third alternative is to provide access to
coverage through Medicaid and through the Exchange. In this alternative,
parents, children, and pregnant women would access Medicaid through the
current structure.
All other individuals at or below 115 percent of
the FPL would not become Medicaid eligible, but instead would get a
subsidy to purchase health care coverage.
The policy options would also make improvements to
the Medicaid program that would simplify and streamline enrollment and
retention in the program, expand access to home and community‐based
services, and create an automatic countercyclical stabilizer to sustain
the program during economic downturns when more people qualify for the
program, but states have less tax revenue to sustain it.
Additional Options for Public Health
Insurance Programs
The paper also addresses creating options for
people ages 55 to 64 years old and for changing the
Medicare 24‐month
disability waiting period. The policy options would not make
changes to the Children’s Health Insurance Program (CHIP) until after
September 30, 2013. After that date, CHIP would be offered through the
Exchange and would provide additional benefits for low‐income
children not eligible for Medicaid.
Eliminating Health Care Disparities
The policy options propose collecting uniform data
on race, ethnicity, gender, and disability that could help researchers
work to end disparities among those groups. States would also have the
option of covering non‐pregnant,
legal immigrant adults during their first five years in the U.S. The
options also propose policies to promote maternal and child health.
Fair share responsibility for individuals
The policy options would create an individual fair
share responsibility to have health care coverage. At the same time, the
policy option would establish exemptions from the requirement. These
exemptions would include religious exemption (as defined in Medicare)
and an exemption for undocumented aliens.
Fair share responsibility for employers
The policies set out two options for the employer
fair share responsibility. The first is that employers must offer
qualified coverage to full‐time
employees.
The coverage must be actuarially equivalent to the
lowest coverage option and it must include first dollar coverage for
prevention services. Under this alternative, the employer would have to
contribute 50 percent of the premium costs and that requirement would be
enforced through the tax code. Employers with total annual payroll of
less than $250,000 would be exempt from offering coverage. The second
option the policies set out is to not create an employer fair share
responsibility.
Strengthening Coverage of Preventive
Services in Medicare
The policy options would make a wellness visit
available to Medicare beneficiaries once every five years and provide a
personalized prevention plan.
The options would also provide incentives for
Medicare beneficiaries to utilize preventive services. Examples of these
incentives include reducing or eliminating cost sharing for screenings
and offering rebates for completion of health promotion programs like
tobacco cessation. The policy options would also align Medicare coverage
for preventive services with scientific evidence to ensure patients
receive appropriate screenings.
Strengthening Coverage of Preventive
Services in Medicaid
The policy options would clarify preventive
services covered at the state’s option for adults under Medicaid. These
optional benefits would be defined as all services rated “A” and “B” by
the U.S. Preventive Services Task Force and immunizations recommended by
the Advisory Committee on Immunizations. States that OPT to cover all
“A” and “B” rated services and immunizations would receive a one percent
increase in the federal share of the FMAP reimbursement rate.
The options would provide incentives for Medicaid
beneficiaries to utilize preventive services. Examples of these
incentives include reducing or eliminating cost‐sharing
for screenings and allowing states to apply for funding to reward
Medicaid enrollees for completing health promotion programs like tobacco
cessation.
Options to Prevent Chronic Disease and
Encourage Healthy Lifestyles
An additional option to promote prevention and
wellness in the short‐term
is make capped grants available to states until the Exchange is
operational.
The grants could be used to provide primary
preventive services such as tobacco use screening, influenza
immunization, counseling on daily aspirin use, hypertension screening,
or obesity screening.
Another option is to provide states with options to
improve the coordination and integration of health and human service
systems. For example, states might create an individualized plan for low
income individuals or create multidisciplinary care teams to
better manage and coordinate care, transition individuals from inpatient
facilities to other settings and, refer individuals to social support
and community resources. A third option would be to create tax
incentives for qualified comprehensive workplace wellness programs.
Notes:
Medicare Rights Center is a national, nonprofit
consumer service organization that works to ensure access to affordable
health care for older adults and people with disabilities through
counseling and advocacy, educational programs, and public policy
initiatives.
