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
- Ten more things about the official Kennedy-Dodd health care bill
- The belt-and-suspenders of the Kennedy-Dodd health care bill
- Health insurance for poor kids
- New York Times to Senator Reid on health care: Speak loudly and carry a little twig
- Parsing the President’s health care reform letter
- Health spending fallacy
Like most Americans, I prefer getting our health coverage through private insurance rather than the federal government. Government healthcare will result in higher costs, rationing and fraud. All we have to do is to look at Medicare; the cost of Medicare has gone up more than the private insurance and in addition there is already rationing and fraud. Until the government can control cost and eliminate fraud in the Medicare Systems they are unqualified to run a public heath care system.
We all agree politicians are not listening to us! We don’t want politicians and bureaucrats dictating the health care and insurance decisions for of us, as well as for our employers. Especially in these difficult economic times, we all need to flatly reject any new government healthcare plan that imposes new taxes or burdens on individuals or businesses. I beg both Republicans and Democrats to lookout for the American people’s best interests. Say NO to Obama’s health care
I understand page 425 of this Bill is a real killer for Seniors. The mandates are outrageous and yet
AARP
says nothing!
When the Federal government, Congress and the President include themselves in the helthcare program, then it “may be worth looking at. I didn’t say vote on it.
@Rob – I don’t know what kind of doctors you see, but my husband is a physician and he most certainly works more than 3 days per week. He works 6 days per week and every other Sunday as well. Be educated and informed before you post anything, please.
CALL YOUR CONGRESSMEN EVERY SINGLE DAY AND DEMAND THAT THEY NOT SUPPORT THIS BILL!! LET THEM KNOW THAT THEY WILL BE OUT OF OFFICE NEXT YEAR IF THEY VOTE FOR IT. WE HAVE A VOICE AND WE MUST USE IT!
http://energycommerce.house.gov/Press_111/20090714/aahca.pdf
below is a link to ObamaCare Health Care plan. AOL is sending out emails soliciting AOL members. If anyone is on FaceBook Obama has someone on FaceBook @ 3PM standard time 7/24/09 to speak on subject of ObamaCare. If you are on Facebook please voice your opinions. I’m not an attorney but it appears that more political rhectoric is in this bill. IF this bill is signed private health insurance will be ILLEGAL!! This is being done to provide Illegal’s with HealthCare. Abortions is covered in this bill. from what I’ve read.
Okay it looks like no one left any good comments about this new bill. Then why are we letting it happen?
It is time people with love in their hearts and the ability to resist greed and blackmail start a THIRD PARTY!
@anna –
Thank you for this comment. I am in my third year of medical school and also laughed at that number.
I am truly beginning to think that all politicians are idiotic buffoons. Has the educational system in America really deteriorated this much? It is painfully obvious not only with this healthcare debacle, but with much of current legislation, that ‘political correctness’ has absolutely nothing to do with intelegence. We have a government by the people and for the people. Sadly, these elected ‘officials’ are not for us because they are not one of us. “Hail Ceasar!” “Long live the Queen!”
@R Lopez – I absolutely concur that the President, Senate and House MUST craft a healthcare plan that they are also bound by law to enroll in. There should be ‘no OTHER plan’ for those Elitists in Washington. We must contact our Senators and members in the House during their holiday break when they return home to their states/districts. DO NOT leave that for others to do. Each of us must call, write, visit et al every singe day. Do not let up. We will lose if we let up now.
I looked up all the senators and congressmen in the State of Mississippi. Put down their phone numbers (all offices) and e-mail addresses. I looked up whether they voted for the stimulus bill and noted it. Then I sent it to anyone I thought cared and asked them to contact the senators and congressmen and pass the information on right away! If you do this for your state, you can ask people to just copy the info and send it on. This makes it easy for people to e-mail or call their “representatives”. I contacted ALL OF the congressmen and senators in Mississippi, even if I was not in their district and told them that I might not vote in their district but if they voted for this bill I would SEND MONEY TO WHOEVER RUNS AGAINST THEM IN 2010!
This bill is not about health care improvement or reform. People better wake up and understand that real fast. This kind of legislation is FOREVER. BHO knows that and that is why he wants to dump it on us underlings so fast. It is his “Holy Grail.” This whole thing is nothing short of one big con job. When will people figure out this administration is not trying to make things better in this country? If they were, they would start with meaningful reform and attempt to rescue the already doomed entitlement programs of social security, Medicare and Medicaid.
But meaningful and healthy reform is not the objective, these people are only about attempting to seize complete power over this country and its hapless citizens forever more. Once they have control over your health, they have control over your behavior and your life. Are we going to let these power crazed corrupt statists really take over our country along with all our freedoms and rights? The democrats of new are nothing short of socialists, marxists and even worse. Even a couple of BHO’s new Czars are avowed Communists. Wake up folks!!
P. S. Have you over 60 something crowd signed up for your early bird “end of life counseling sessions yet?”
Go to youtube and search “Betsy McCaughey exposes” That video will scare the crap out of you. This will be your new reality if we don’t beat this back, it is NOT a joke.
@judy –
Judy
To answer your question, the big rush is so they can pass a bill before we know what is in it. Heck they don’t even know what is in it but they are too eager to go on recess and vacations (another thing we pay for) Also since it doesn’t apply to them, they just vote. We should all be so lucky as to have their health care benefits.
Did you know that in one of the health bills proposed, that once you are 65, you would be required (by the government) to visit your doctor to discuss your death? What makes any of us think that once you are 65 , you will get quality care. Not that the doctors wouldn’t give it to you, but the government will decide when and if you can go.
Also, out of the 50 million uninsured, did you know that 10 million of those are in this country illegally. Why should they get so much recognition for this? Many others can afford but choose not to have for one reason or another.
This is not the only bill that will destroy America, stay up on the others such as Cap and Trade, etc.
For all those who think this health care plan is good, go to Canada and check it out. I have friends there and thankfully they are healthy. a simple blood test could take up to 2-3 months to get. Really sick?? Better go somewhere else….oh that’s right, they come to the US. with our new plan proposed by Congress, they can save the trip.
You see, I guess they don’t care if we vote them out at next election (if we still get to vote by then and if they haven’t totally destroyed America as we know it by then), because even when they are out of office, we will pay for them the rest of their lives in retirement benefits.
I heard the most disturbing comment the other day. One asked, “how long will it be before we’re known as the USSA?”
That is so scary but I’m afraid that is the road we are on if the “silent majority” remains silent.
I don’t know why I chose your comment to respond to other than I had some of the same questions Keep asking questions Judy and get louder and louder. Call or write your congressman and senator. Not sure they are listening but it is our duty and presently our right.
Elaine–I agree with you wholeeartedly; They should be required to participate in the same plan while they are working and in “original/standard” medicare when they reach 65–no exceptions. But I’m not holding my breath…..@Elaine Demery Potter -
I am one of those over 60 somethings and you don’t need to be a rocket scientist to figure out that if the plan is going to 1) get $400-500-600 Billion of savings over 10 years out of a plan that 2) is on the brink of bankruptcy today with 3) rising enrollments of baby boomers looming, when 4) that plan already has among the lowest reimbursement rates in the industry [and is supposedly a model of administrative efficiency], that benefits and coverage under medicare are going to have to be dialed way back —”here’s your referral to the hospice, go and do your duty.” And AARP loves this plan, go figure. On the other hand, only the democrats could get away with reducing the “medicare promise”. For you “under 60 somethings”, don’t count on government for very much–other than higher taxes–and you may be able to plan effectively. @Jim Irvin -
@Nikki –
Nikki, I think they ‘re all “drinking the Kool-ade”
As for your question, how to be heard……keep doing what you are doing. Talk, Ask Questions, contact your representatives (and I use that term loosely…I don’t feel they represent me but I keep sending emails anyway) Contact news stations (of course, some of them are drinking the Kool-ade too) newspapers, talk show hosts, etc. and encourage others to do the same. Some people think their one voice doesn’t matter but it does, Unfortunately silence is dangerously powerful now. They just keep doing what they’re doing when there is no accountability to the people. It is every citizens right and duty to voice their opinion and concerns.
Let’s see…..a Stimulus Bill that didn’t stimulate, now a health care plan that will kill us. Hmmmm, more better speak up.
Thanks for sharing your opinion
@Jerry L. Thompson –
Jerry
Amen………….I would encourage anyone who is a member of AARP to DROP IT and let them know why.
Why can we not make health care a public service? Health care is far more expensive than it needs to be. Limit the amount of money doctors make and how much can be charged for certain items. A peice of plastic should not cost $200. Police officers and fire fighters are public service and for the most part do not make a significant amount of money. That alone would probably decrease the amount of money used on health care. Not to step on doctors, but why do they need to make so much money?
This is the pdf version of the H.R. 3200 Health Care Reform Bill Obama is trying to get passed. It contains 1017 pages, is hard to read and even harder to interpret.
111TH CONGRESS – 1ST SESSION – H. R. 3200 – To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3200ih.txt.pdf
This is a preliminary analysis of H.R. 3200, the America’s Affordable Health Choices Act of 2009, as introduced on July 14, 2009, by The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT).
PRELIMINARY ESTIMATE OF THE EFFECTS ON THE DEFICIT OF H.R. 3200, THE AMERICA’S HEALTH CHOICES ACT OF 2009
http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf