Understanding the Kennedy health care bill
8 June
Over the weekend a draft of Senator Kennedy’s (D-MA) health care bill leaked. After playing with Adobe Acrobat, here is the text of the draft Kennedy bill as a text file (173 K), and as a single Acrobat file (3.4 MB). Update: I fixed the broken link to the PDF. Unlike the leaked version, both of these are searchable.
Calling it the “Kennedy” bill is something of an overstatement. Senator Kennedy chairs the Senate Health, Education, Labor, and Pensions committee, and his staff wrote the draft. By all reports, however, Chairman Kennedy’s health is preventing him from being heavily involved in the drafting. Senator Reid has designated Senator Chris Dodd (D-CT) to supervise the process, but as best I can tell, it’s really the Kennedy committee staff who are making most of the key decisions. For now I will call it the Kennedy-Dodd bill.
As the committee staff emphasized to the press after the leak, this is an interim draft. I assume things will move around over the next several weeks as discussions among Senators and their staffs continue. This is therefore far from a final product, but it provides a useful insight into current thinking among some key Senate Democrats.
Update: I now have a three-page outline of the House Democrats’ health care bill. I have a new post which contains all of the content below, and compares it to the House bill. If you read the new post, you’ll get two for the price of one: Understanding the House Democrats’ [and Kennedy-Dodd] health care bill[s].
Here are 15 things to know about the draft Kennedy-Dodd health bill.
- The Kennedy-Dodd bill would create an individual mandate requiring you to buy a “qualified” health insurance plan, as defined by the government. If you don’t have “qualified” health insurance for a given month, you will pay a new Federal tax. Incredibly, the amount and structure of this new tax is left to the discretion of the Secretaries of Treasury and Health and Human Services (HHS), whose only guidance is “to establish the minimum practicable amount that can accomplish the goal of enhancing participation in qualifying coverage (as so defined).” The new Medical Advisory Council (see #3D) could exempt classes of people from this new tax. To avoid this tax, you would have to report your health insurance information for each month of the prior year to the Secretary of HHS, along with “any such other information as the Secretary may prescribe.”
- The bill would also create an employer mandate. Employers would have to offer insurance to their employees. Employers would have to pay at least a certain percentage (TBD) of the premium, and at least a certain dollar amount (TBD). Any employer that did not would pay a new tax. Again, the amount and structure of the tax is left to the discretion of the Secretaries of Treasury and HHS. Small employers (TBD) would be exempt.
- In the Kennedy-Dodd bill, the government would define a qualified plan:
- All health insurance would be required to have guaranteed issue and renewal, modified community rating, no exclusions for pre-existing conditions, no lifetime or annual limits on benefits, and family policies would have to cover “children” up to age 26.
- A qualified plan would have to meet one of three levels of standardized cost-sharing defined by the government, “gold, silver, and bronze.” Details TBD.
- Plans would be required to cover a list of preventive services approved by the Federal government.
- A qualified plan would have to cover “essential health benefits,” as defined by a new Medical Advisory Council (MAC), appointed by the Secretary of Health and Human Services. The MAC would determine what items and services are “essential benefits.” The MAC would have to include items and services in at least the following categories: ambulatory patient services, emergency services, hospitalization, maternity and new born care, medical and surgical, mental health, prescription drugs, rehab and lab services, preventive/wellness services, pediatric services, and anything else the MAC thought appropriate.
- The MAC would also define what “affordable and available coverage” is for different income levels, affecting who has to pay the tax if they don’t buy health insurance. The MAC’s rules would go into effect unless Congress passed a joint resolution (under a fast-track process) to turn them off.
- Health insurance plans could not charge higher premiums for risky behaviors: “Such rate shall not vary by health status-related factors, … or any other factor not described in paragraph (1).” Smokers, drinkers, drug users, and those in terrible physical shape would all have their premiums subsidized by the healthy.
- Guaranteed issue and renewal combined with modified community rating would dramatically increase premiums for the overwhelming majority of those Americans who now have private health insurance. New Jersey is the best example of health insurance mandates gone wild. In the name of protecting their citizens, premiums are extremely high to cover the cross-subsidization of those who are uninsurable.
- The bill would expand Medicaid to cover everyone up to 150% of poverty, with the Federal government paying all incremental costs (no State share). This means adding childless adults with income below 150% of the poverty line.
- People from 150% of poverty up to 500% (!!) would get their health insurance subsidized (on a sliding scale). If this were in effect in 2009, a family of four with income of $110,000 would get a small subsidy. The bill does not indicate the source of funds to finance these subsidies.
- People in high cost areas (e.g., New York City, Boston, South Florida, Chicago, Los Angeles) would get much bigger subsidies than those in low cost areas (e.g., much of the rest of the country, especially in rural areas). The subsidies are calculated as a percentage of the “reference premium,” which is determined based on the cost of plans sold in that particular geographic area
- There would be a “public plan option” of health insurance offered by the federal government. In this new government health plan, the federal government would pay health care providers Medicare rates + 10%. The +10% is clearly intended to attract short-term legislative support from medical providers. I hope they are not so naive that they think that differential would last.
- Group health plans with 250 or fewer members would be prohibited from self-insuring. ERISA would only be for big businesses.
- States would have to set up “gateways” (health insurance exchanges) to market only qualified health insurance plans. If they don’t, the Feds will set up a gateway for them.
- Health insurance plans in existence before the law would not have to meet the new insurance standards. This creates a weird bifurcated system and means you would (probably) be subject to a different set of rules when you change jobs.
- The bill does not specify what spending will be cut or what taxes will be raised to pay for the increased spending. That is presumably for the Finance Committee to determine, since it’s their jurisdiction.
- The bill defines an “eligible individual” as “a citizen or national of the United States or an alien lawfully admitted to the United States for permanent residence or an alien lawfully present in the United States.”
- The bill would create a new pot of money for state gateways to pay “navigators” to educate people about the new bill, distribute information about health plans, and help people enroll. Navigators receiving federal funds “may include … unions, …”
This would have severe effects on the more than 100 million Americans who have private health insurance today:
- The government would mandate not only that you must buy health insurance, but what health insurance counts as “qualifying.”
- Health insurance premiums would rise as a result of the law, meaning lower wages.
- A government-appointed board would determine what items and services are “essential benefits” that your qualifying plan must cover.
- You would find a tremendous new disincentive to switch jobs, because your new health insurance may be subject to the new rules and would therefore be significantly more expensive.
- Those who keep themselves healthy would be subsidizing premiums for those with risky or unhealthy behaviors.
- Far more than half of all Americans would be eligible for subsidies, but we have not yet been told who would pay the bill.
- The Secretaries of Treasury and HHS would have unlimited discretion to impose new taxes on individuals and employers who do not comply with the new mandates.
- The Secretary of HHS could mandate that you provide him or her with “any such other information as [he/she] may prescribe.”
I strongly oppose this bill.
Update: If this topic interests you, I highly recommend Jim Capretta’s blog Diagnosis.
(photo credit: kennedy.senate.gov)
Related Posts
(best matches are listed first)- Understanding the House Democrats’ health care bill
- Understanding the Kennedy-Dodd and House Democrats’ health care bills
- Ten more things about the official Kennedy-Dodd health care bill
- The belt-and-suspenders of the Kennedy-Dodd health care bill
- New York Times to Senator Reid on health care: Speak loudly and carry a little twig
- Health insurance for poor kids
- Parsing the President’s health care reform letter
- Health spending fallacy
THis bill is HORRIBLE !!!!! we have to get this bill voted out. I work my ass off for what I have and I am not going to support Pelosi’s lazy non working sector of the community. The bill is bad and bad for America. Tell Pelosi to stick it. She is the speaker. She was not elected. Tell your congressmen and women and senators this is their last stand if this goes through. Even the one’s who voted no to the bill, this is it for them. THey can make it happen if they want to. If bill is voted in, they are voted out.
Once again, we see snake oil salesmen trying con the American people into more big government intrusion into our lives and lying to do it. The Democrats keep using a figure of 46 million uninsured. The truth is, 12 million of that number are illegal aliens and another 10 million don’t need it because they are young and healthy and really only need catostophic insurance. The bottom line is that 5% of our population, need 50% of our health care resources. This is the elderly who need the care the most. It is estimated that only $28-$40 billion would be needed to fund those who actually do not have health care insurance. As far as preventative care component of the argument is that most health care problems ARE NOT preventable! Diabetes, heart disease, cancer et al……are usually NOT preventable! What they are also not telling you is that there is going to be 10,000 pages of regulation! Here we have a government that can’t run a social security or medicare program that now have reached $104 Trillion in unfunded liabilites! The absolute worst thing we can allow, is the takeover by government of anything! The government is trying to take your individual rights from you. Write or email or call your representative and tell them politiely that unless they stop this spending and taking of our individual rights, they are going to be joining us in the unemployment lines.
The solution is simple to me. As we are the last developed country without universal health we can learn from the mistakes of other countries and implement only the best elements. Some of the does and don’ts are:
–do — We need a single payer system to suck a lot of the administrative costs out.
–do — The single payer system should be a non government organization or a government system that works like the FDIC.
–do — The health system should have the power to negotiate with whomever they deal with for goods and services.
–do — Effective tools to deal with fraud and abuse.
–do — Depoliticize the operation of the system.
–do — Limit law suit payouts.
–do — Size the system so that necessary routine tests, either for wellnes or for diagnostic purposes,
are not drawn out. Technology would be a valuable tool in lowering these costs.
–don’t — Rush system implementation. It’s taken years to get where we are and a few more months won’t matter.
–don’t — Pour the system in concrete as initially implemented. Periodic, perhaps yearly, reviews with system
changes as needed. The process of system improvement should be continual.
The list could go on but the point is to learn from the mistakes other countries have made in the past
This is just the start of providing healthcare to the world. They (both House & Senate versions) give healthcare to illegals so this means anyone anywhere in the world gets sick then all they have to do is either walk across our border or hop a flight. Once here everything is free for them. Our wonderful government will even send for the rest of their family and support them too. AIDS, TB, Cancer, Heart Disease, Spinal Cord & Head Injuries, and even Mental patients will flock here. I’m sure Cuba will be more than happy to let their sick travel here. Then when you & I need healthcare the money will be gone. There are only so many hospital beds and so many doctors. On weekends hospitals report to EMS when they are out of beds so they can take patients to those that have room. Add another 60/70 million to these hospitals and there aren’t going to be beds and doctors to treat all. And we all know who will be treated! And it’s not the ones that pay the taxes.
@WeMadeAmistake –
I don’t think telling them we will vote them out of office gives them much worry. Their financial futures are sound, compliments of we the Taxpayers.
I don’t know what it will take to get them to listen to what the majority of Americans are saying. They are so far out there.
“BEAM ‘EM DOWN SCOTTY”
For those of you who think we are supposed to take care of our fellow Americans, you’re right in idea. However, you need to read and understand our Constitution. It does NOT provide for healthcare. Our government is supposed to protect us…military, local police, firemen. Everyone has the opportunity to succeed, but their success is up to them. As Americans, we are supposed to take care of our fellow Americans by contributing to our churches and charities. If you look back in history, the poor were well cared for under that system. When the government started providing programs that we had to pay for through higher taxes, contributions to charities and churches decreased. As a result, the services they could provide declined. Our Founding Fathers risked EVERYTHING to get out from under this kind of taxation and government control. Too many people do not even KNOW what our country is… a Republic NOT a democracy. The country was also founded on God and it was a requirement that He be the center of everything!! We already know where liberalism is taking that foundational concept. I suggest everyone start reading books about our Founding Fathers and learn what this country is about; the principles it was founded on; and the vision of our Fathers. A good book to start with is “The 5000 Year Leap”. The Founding Fathers said when we have an illiterate electorate, our country will fall. We’re on that slippery slope now, how else could we have gotten this president and congress, BUT it’s not too late to stop the fall. Educate yourself!!!
I believe Ann has a clear picture of the situation
page 425 explains advance planning, before one goes to surgery one fills out paperwork to give directives if something may go wrong we do thta now, if we want to be sustain by artifical means… more scare tactics…. please has anyone had a surgery lately? quit listening to rush bimbo and leave your signs at home
@Ann –
Ann, I like Joe agree with you. Of course,I guess you heard on the news that the term “founding fathers” will no longer be used in the newer educational texts along with other terms.
Who are these people that can decide to change 200+ years of history at a whim?
PS: Another important book people need to READ in entirety is “The Holy Bible” That includes me as ashamed as I am to say it but I do know that from my studies, this book is TRUTH and applies to today just as it did in the day. The applications from the Bible were the foundation on which this great nation came to be. It’s been since attacks on solid and mmoral principles supported by politically motivated persons with little or no backbone, that this country has taken a downfall. Remember the children of Israel. They were blessed and blessed and blessed. They kept turning their backs on God, and He finally let them have what they asked for, I don’t have to tell you the rest of that story, look at where we are today.
Access to basic health care should be a fundamental right of all citizens. It is embarrassing that the United States, the greatest country in the world, does not provide universal health care to its citizens. We spend the most money in the world on our health and have nothing to show for it. 46 million Americans cannot afford health insurance and our average life expectancy is lower than life expectancy in Europe. This is not a question of liberals vs. conservatives. ALL Americans should want a better system.
Whereas I agree that some form of healthcare reform is necessary, the proposed bills are unacceptable. I do not believe that healthcare is a fundamental right; however, I expect insurers and medical providers to honor their commitments to patients and to do their part to help reign in medical costs. I do believe there is a legislative role for government in helping to level the playing field for insurers by requiring they honor–across the board–their commitments to the insured. Encouraging insurers to offer tiered packages with different levels of coverage would also help to make insurance affordable for many.
I am particularly troubled by the idea of an employer mandate. Entrepreneurs and small corporations must be given every advantage so that they may succeed. Through competition–by providing both goods and jobs (at all levels)–their success serves to keep costs low and to narrow the income gap between low and high earners. The success of entrepreneurs and small corporations is therefore of greater importance to the nation than their participation in insurance programs.
Since several folks here have brought up the role of religious organizations, I feel compelled to comment. Our founding fathers established this nation, not only that we may have freedom *of* religion, but also freedom *from* religion. (Recall the writings of such individuals as Benjamin Franklin, Thomas Paine, and Thomas Jefferson.) Many people who find themselves in need would consider it the greatest humiliation and violation of their personal beliefs to approach a church–or any other religious organization–for assistance. (I personally would rather crawl into a forest and starve to death first.) The founding fathers were not infallible in either their political or religious beliefs either (recall that they chose to leave the institution of slavery intact as a matter of political expediency). We should build upon the strong foundations that they established and not believe ourselves constrained simply to ride on their coattails. The decline of both the Greek culture and Roman Empire may largely be attributed to their people’s complacency and their unwillingness to build upon the achievements of their ancient patriarchs.
@cclark – @Ann – @Joe Egolf -
@Rachel –
Both Medicare and Medicaid are controlled by the government. by definition they are socialized programs. They are geared to the needs of society.
@Ann
Back in the day the poor where well cared for by the churches? Don’t get me wrong here as I do appreciate the services that Churches do offer. But I hardly believe that they can manage the number of needy people of today. If they could then why don’t they just step up to the plate and start doing so? I ask that question rhetorically as I already know the answer. Back when our founding fathers visualized our America the failed to see the influence of the greedy. And if you think about it, it is the greedy that put this country in the mess it is in now. It is that same greed that keeps the money from the churches which they would need to run the necessary programs to aid the poor. The same greed that causes the lies and political turmoil that exist in out government today. The greed that causes the cost of medical care to be so high.
This is ridiculous!! I work my ass off for what I have and these pieces of **** that SIT on their asses all day get even more. I’m tired of paying taxes to help crackheads have more babies and then buy more crack and then get even more healthcare. If Pelosi and Obama and these dems are so worried about this universal heathcare to help pay for worthless contributers to society and immigrants let them pay for their healthcare!!!! What in the hell are people thinking when they vote for idiots like this to take office!! To vote you should have to have a job, be looking for a job and have PROOF, be retired from a job and have a freaking drug test!!!
Maybe Dr U.R. (8-1-09) should talk to some vets if he thinks the VA is a model of efficiency.
Any government program that forces on people something they do not want is surely wrong. The only exception to that would be the government’s ability to have sufficient funds for the general protection of the population. Therefore some form of tax is necessary. As it stands now our tax paying population is way over-burdened with all kinds of taxes, many of which we do not even recognize. Those of us who have health care should be left alone. The law requires hospitals to care for any coming to their ER’s for care at a huge loss for this institutions. Many people will chose this way of care even though they have coverage because they do not want to be bothered with making an appointment with their primary care physicians. I know this from being told by others that do just that. Under the proposed legislation, though perhaps not mentioned directly, I believe that abortion, euthenasia, limited care for the elderly, and limited care in general will be next as we open the door to government to do more in this area as they do in all areas that they involve in. Other than the military, someone tell me what area government is involved in that works well at a reasonable cost, and even with the militaary their has always been huge outlays of money for thing that are unnecessary. What happened to shutting down the lobbyists and special interests? Not happened and will not happen. Most of our politicians are only interested in how to get reelected, in both major parties. Our President has made so many promises to his Chicago cronies, unions, Acorn and has so discredited himself from his original promises that he will soon be “beyond belief”. My son and his partner recently opened a small business where their income is less than poverty levels, their work load very heavy, working 80 to 90 hours per week, with only the 2 of them doing the work. I donate my efforts, however small to help them. They will be successful if all governments gets out of their ways. They will not hire due to all the insurances and expense they would incur with employees. In time their wages will grealy improve but they will not hire new employees and go it alone. The money they paid out in fees, licences, etc. to get their doors open here in New York was great. Before long we will all be government employees as government acquires more banks, auto industries, insurance companies, etc. Government only needs to use reasonable regulations to keeps the Bernies from our doors, and then enforce such regulations. Americans: Wake Up. Borders, Language, Culture are what matters if we are not to lose what so many have died for in our defense, The American Dream. Use your freedoms or lose them. It depends on each of us to stand or fall.
As much as I want healthcare for all. Why the rush? Its going to be some crappy watered down piece of legislation. The usual smoke and mirrors. Healthcare needs to be fixed. Private ins. needs to go, however it won’t happen over night. The American workplace is a shambles. The dedicated do the majority just show up. Unions and others protect poor performance. The rules need to change, slackers need to be addressed yesterday. Health Industry leads the pack wasting time and a countryclub atomosphere. GOG forbid they messup the CIA could take tips from them on CYAF. Let get it right for some change that we can belive in.
The dedicated do all the work others just showup. GOD forbid they mess up. Lets get it right