Understanding the House Democrats’ health care bill
9 June
Yesterday I posted and described the draft Kennedy-Dodd health care bill. Today I would like to do the same for an outline produced by House Democrats.
Here is a three-page outline of “Key Features of the Tri-Committee Health Reform Draft Proposal in the House of Representatives,” dated yesterday (June 8, 2009).
The three committees are:
- The House Ways & Means Committee, chaired by Rep. Charlie Rangel (D-NY). The Health Subcommittee is chaired by Rep. Pete Stark (D-CA).
- The House Energy & Commerce Committee, chaired by Rep. Henry Waxman (D-CA). The Health Subcommittee is chaired by Rep. Frank Pallone, Jr. (D-NJ).
- The House Committee on Education & Labor, chaired by Rep. George Miller (D-CA). The Health, Employment, Labor and Pensions Subcommittee is chaired by Rep. Robert Andrews (D-NJ).
The document suggests this is a joint product of the three committees and/or their subcommittees. My sense, however, is that it is Speaker Pelosi who is driving the bus. This is in contrast to the Senate, where the committee chairmen (Kennedy/Dodd and Baucus) appear to have the pen, in less well-coordinated efforts.
Kennedy-Dodd and the House bill outline are remarkably similar. Whether this represents House-Senate coordination or parallel thought processes is unclear.
I think the easiest way for me to present the House bill outline is in comparison with the Kennedy-Dodd bill. So here my description from yesterday of the Kennedy-Dodd bill, with today’s comparison to the House bill outline in red. I hope it’s comprehensible and useful this way. If you read yesterday’s post, you can skim the text in black and focus on the new text in blue.
Here are 15 things to know about the draft Kennedy-Dodd health bill and the House bill outline.
- 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 House bill also contains an individual mandate. The outline is less specific but parallel: “Once market reforms and affordability credits are in effect to ensure access and affordability, individuals are responsible for having health insurance with an exception in cases of hardship.”
- The Kennedy-Dodd 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.The House bill outline also contains an employer mandate that appears to parallel that in Kennedy-Dodd: “Employers choose between providing coverage for their workers or contributing funds on behalf of their uncovered workers.”
- 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.The House bill outline is consistent with but less specific than the Kennedy-Dodd legislative language. The House bill outline would “prohibit insurers from excluding pre-existing conditions or engaging in other discriminatory practices.” I will keep my eye on what “other discriminatory practices” means in the legislative language. Does that mean that a health plan cannot charge higher premiums to smokers? Like the Kennedy/Dodd bill, the House bill outline would preclude health plans from imposing lifetime or annual limits on benefits: “Caps total out-of-pocket spending in all new policies to prevent bankruptcies from medical expenses.” This would raise premiums for new policies.
The House bill outline “introduces administrative simplification and standardization to reduce administrative costs across all plans and providers.” I don’t know what this means, but suggest keeping an eye on it.
- 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.Same: “… by creating various levels of standardized benefits and cost-sharing arrangements…”. It also contains this addition relative to Kennedy-Dodd: “… with additional benefits available in higher-cost plans.” But note the “various levels of standardized benefits.” This appears to be more expansive government control of health plan design than in the Kennedy-Dodd draft.
- Plans would be required to cover a list of preventive services approved by the Federal government.This is unspecified in the House bill outline. We’ll have to wait to see legislative language. The House bill would require plans to “waive cost-sharing for preventive services in benefit packages.”
- 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.This appears parallel but is less specific for now: “Independent public/private advisory committee recommends benefit packages based on standards set in statute.” I find the “standards set in statute” interesting. It suggests that provider and disease interest groups will have two fora in which to lobby for their benefits to be mandated: Congress, and the advisory committee.
- 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.The House bill outline is silent on this.
- 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.The House bill outline is consistent with but less specific than the Kennedy-Dodd legislative language. The House bill outline would “prohibit insurers from excluding pre-existing conditions or engaging in other discriminatory practices.” I will keep my eye on what “other discriminatory practices” means in the legislative language. Does that mean that a health plan cannot charge higher premiums to smokers? Like the Kennedy/Dodd bill, the House bill outline would preclude health plans from imposing lifetime or annual limits on benefits: “Caps total out-of-pocket spending in all new policies to prevent bankruptcies from medical expenses.” This would raise premiums for new policies.
- 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.The House bill outline says it would “prohibit plans [from] rating (charging higher premiums) based on gender, health status, or occupation and strictly limits premium variation based on age.” If the bill were to provide nothing more, this would appear to parallel the Senate bill and preclude plans from charging higher premiums for risky behaviors.
- 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 House bill outline is silent on guaranteed issue and renewal. I’m going to make an educated guess that the bill includes these provisions as part of “other discriminatory practices,” and they have just left them out of the outline. Given the philosophy behind this outline (with which I disagree), it would be a striking omission. But for now, the outline says nothing specific on these topics.
- 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.The House bill outline “expands Medicaid for the most vulnerable, low-income populations,” so we have no specifics other than that there’s an expansion. I cannot tell if this is expanding eligibility or benefits. The outline also “improves payment rates to enhance access to primary care under Medicaid.” I assume this means the bill would expand the Federal share paid of each dollar spent by a State Medicaid program on primary care, rather than the Federal government actually mandating specific payment rates to be implemented by States. Federal micromanagement of specific Medicaid provider payment rates was eliminated in the mid 1990’s.
- 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.The House bill outline has a sliding scale up to 400% of poverty. If this were in effect in 2009, a family of four with income of $88,000 would get small subsidy.
- 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.The House bill outline is not specific on this point. I would not expect it to be – this is something you can tell only from legislative language.
- 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.The House bill outline “creates a new public health insurance within the Exchange … the public health insurance option competes on ‘level field’ with private insurers in the Exchange.” There are no specifics on how the public plan would work, or on provider payment rates.
- Group health plans with 250 or fewer members would be prohibited from self-insuring. ERISA would only be for big businesses.The House bill outline is silent on this point.
- 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.The House calls it an Exchange rather than a Gateway. While the Senate bill would tell each State, “Create a Gateway or we’ll create one for you,” the House bill outline says to each State, “We’re creating a single new national Exchange. You’re in it unless you develop your own State or Regional Exchange.”
- 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 House bill outline appears to parallel the Kennedy-Dodd draft: “Phases-in requirements to benefit and quality standards for employer plans.” This means that new plans will be more expensive than old plans. It also means they’re creating a bifurcated system with all sorts of perverse unintended consequences for employment flexibility.
- 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 House bill outline lists specific topics for changes to Medicare reimbursement:
- Changing (how?) the Medicare reimbursement for doctors, called the “Sustainable Growth Rate” (SGR).
- “Increasing reimbursement for primary care providers”
- “Improving” the Medicare drug program. I won’t be surprised if, when I see the specifics, I disagree that their changes are “improvements.” In the past this has meant having the federal government mandate specific prices for drugs.
- Cutting payments to Medicare Advantage plans.
- Expanding low-income subsidies for seniors and eliminating cost-sharing for all preventive services in Medicare.
The House bill outline also uses positive language to describe things that might generate budgetary savings from Medicare and/or Medicaid. The hospital readmissions point is specific. The first two points could increase or decrease federal spending, depending on the specifics.
- “Use federal health programs … to reward high quality, efficient care, and reduce disparities.”
- “Adopt innovative payment approaches and promote[s] better coordinated care in Medicare and the new public option through programs such as accountable care organizations.”
- “Attack the high rate of cost growth to generate savings for reform and fiscal sustainability, including a program in Medicare to reduce preventable hospital readmissions.”
- 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 House bill outline is silent on this point.
- 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, …”The House bill outline is silent on this point.
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 House bill outline is not specific on this point.)
- The Secretary of HHS could mandate that you provide him or her with “any such other information as [he/she] may prescribe.” (The House bill outline is not specific on this point.)
I strongly oppose the Kennedy-Dodd bill and the House Tri-Committee bill.
If this topic interests you, I highly recommend Jim Capretta’s blog Diagnosis.
(photo credit: speaker.house.gov)
Related Posts
(best matches are listed first)- Understanding the Kennedy health care bill
- Ten more things about the official Kennedy-Dodd health care bill
- Parsing the President’s health care reform letter
- 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
- The Farm Bill will be vetoed
I really truly think that this whole health care bill is a joke.I t is being set up by anever-increasing wanna-be socialist government(i.e government bailout and now this.) I work hard and put in alot of overtime to get what i have and to help pay for increasing medical coverage and now i’m being told that my taxes and premiums are going to go up because there are too many people that dont want to get a real job or any job for that matter for fear of having to pay for their own health insurance,thats a bunch of crap. I pay dearly for my insurance,why cant everybody else.
@Jessica
Where have you people been for the last 20 years? Have you educated yourselves at all on how the Health Care system in this country works at all? YOU ARE ALREADY PAYING FOR THOSE WHO GO INTO REHAB, THOSE WHO ARE OBESE, THOSE WHO HAVE ILLNESS DUE TO SMOKING, ALCOHOLISM, ETC. Additionally, YOU PAY YOUR PRIVATE INSURER EXTRA INCREASES IN PREMIUMS ON TOP OF THAT TO ENSURE THAT THEY CONTINUE TO RECEIVE AN INCREASE IN PROFIT EVERY YEAR.
Wake up and educate yourselves–doa non-biased statistical research on Insurance company profits v payouts. Make your own decisions based on cold hard facts. When the Rush Limbausghs of the world, Obese, drug addicted private health insurance carriers go into rehab, your premiums help to pay for his rehab…
I don't know what jharp does for a living; but he spends allot of time in this blog, maybe you work for a government agency like acorn.
lol
If this bill should pass its hurt our seniors the most. A 500 Billion cut in Medicare will be a severe blow to the coverage Seniors receive. At the present time Doctors who accept Medicare patients our on the verge of not accepting seniors as new patients who are on Medicare. Life saving tests will be denied as a result . You will not need a Death Panel when vital services for Seniors are denied. I pray the Senate stops this bill in its tracks. I will never vote for the Democrates again.
laaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
Would someone e-mail me where I can read these bills for myself? I know that they are very large, but where are they posted? My e-mail address is snook01@bellsouth.net .
Every empire takes a fall. Currency holds an empire together and while engineered fear works great in manipulating people. Mostly people don't care until it obviously there's a problem or its too late. In September 2008, the transfer of wealth concentrating capital while markets fell. Prior, millions of people were already effected to their detriment. How did this happen? It's complex but at core, Milton Freedman, a former chairman of the Federal Reserve Bank pointed to the policies of the Fed in making the 1929 Great Depression much worse as a result of its intervention. But more pointedly, Milton Freedman highlighted the causes in economic collapse being the retraction of available capital for business growth and consumer credit and money.
Against the recent contraction of credit and capital for the use of the people and business, money is printed and debt is produced to the point where some Congressmen and Senators see the destruction of the US dollar within 20 years. It is almost as F.A. Hayek's "Road to Serfdom" was read not as a warning but as a guide to use a dollar to render the lower standard of living as the new way of life. So, it makes sense that health care take steps like "contributing" 497 million dollars to the passage of the mandatory health coverage law – under criminal penalties. One can conclude, this government is at core a broker state, up for sale. With most paid media as cheerleaders and opinion shifters, is it any wonder the blogs are taking hold.
Many recognize the dollar is where the power is, lately, many looking to use an exchange service have discovered new membership blocked and exit strategies limited.
We should recognize the power of this state, the Air Defense of the United States just didn't react during September 2001 attack while Dick Cheney was at the control, how confident we are in the architect of the invasion of Afghanistan also defining the terms of inquiry as chair of the 9/11 commission, and the impressive precision of the WTC falling in place, never before or since has a fire placed a tall building so well in the ground. How about that building 7 of the World Trade Center: Building 7 reported by the BBC about 30 minutes before it actually happened to have collapsed despite that it was not "hit" by a jet aircraft.
So, is it any wonder, that the health care professionals seek to insure profits? Maybe robotics can team up with offshore doctors to move their business abroad? Then perhaps they can feel like the manufacturing sector or the middle class, or what's left of it.
Concerned, I would agree with you, except for the fact that it sounds like they are going to either force you to get thenew insurance, or pay a tax premium. No escape from big brother.
So, as a Missouri citizen, who do I need to hound to do what I can to stop this idiocy? It sounds like it’s just in commitee now.
Contact your representatives at http://www.visi.com/juan/congress/
I completely agree. We’re witnessing the systematic destruction of what made America great. I feel like too many Americans are like the frog in the pot of water. The water’s getting hotter and we don’t even realize it…pretty soon we’ll be cooked. I’m afraid of what we will have to endure while we wait for the next election cycle so we can clean house!
What a lovely word!
Jane – Maybe prison will be the best answer…free health care, no required insurance, three square meals, no tax. We are already nearly in prison under this administration and our freedoms are rapidly disappearing.
jharp,
if you are in doubt that this is a proposal for socialized medicine, I suggest you look in to the UK NHS (national healthcare system) with the huge lines to see a specialist doctors to lack of hospital beds etc. – that’s what happens when govmt runs healthcare. On additional note, how about teaching people to be responsible for their own health??? Why others should subsidize the smoker or drug user??? (see points ## 4 and 5 in the article).
I am curious, how is this unconstitutional?
Unfortunately Marlene, I believe that the government is doing everything they can to make this a communist country. They want to take away all the rights of the people in this country and will stop and nothing to accomplish their goals. They want this country to be so dependant on the government that when this country does fall (and I believe that it will, if the governement continues going down the path they are)we will have no one to turn to but them. My suggestion at this point: get food storage, a water supply, prepare for the worse and hope for the best…
As a pediatrician, with my own practice, I am very frustrated with our healthcare. It does not work well. Yes we have the latest gadgets, but we have a very poor primary care system. If most cannot access basic preventative care what good is all the technology. I am diabetic, no insurance will touch me with a ten foot poll. But lets say I could not afford my insulin and glucose testing supplies,my average monthly expenses without insurance would cost more than $600, and if I was not able to buy what I need, I would eventually have kidney failure,amputation, blindness.. get on disability and my monthly cost to Medicaid would be in the several thousands a month, I couldn’t continue to be a productive member of society. So why pay thousands later when all that can be prevented.
I am also a health care provider and a patient. I own my own pediatrics practice, I see 80% medicaid. I would rather deal with medicaid than the private insurance. My daughter was born in 11/08, she had an ultrasound in jan 5,09 for a birth mark. my private insurance denied payment saying this was “pre existing” how could that be she has been covered since birth!! I have spent hours explaining this to the insurance and to the hospital. The hospital sent my bill to collections. My family pays 1,100 per month in health insurance. we pay another 5,000 a year in deductibles and co-insurance. How can an average family afford 18,000 a year in medical expenses.
So you don’t have health insurance, what happens when you get in to a car accident and require surgery and months of rehabilitation. so, now 2/3 of bankruptcy in middle class families are due to medical costs.
I don’t understand this fear of universal medical coverage regardless of whether it comes from the government or mandatory private coverage ie like Germany. we are 37th in the world for quality of healthcare. I am telling you, as a physician myself, our healthcare industry is very poorly run. Basic healthcare should be available to all.
Really! I lived and worked in England, and I would choose that over the health care here. Sure you might have to wait for elective surgery, but medically necessary care is always available. My brother lives in Germany, they have mandatory health insurance coverage from PRIVATE insurers with some government subsidy for the poor.
Look at their system
“You’re an idiot for not being insured. Hopefully you remain healthy but you need to seriously consider the alternative.”
For many, it’s a completely rational decision under today’s laws. Healthy 25 year old males rarely have significant health problems. Should he have a problem, he’ll still get care. Yeah, he may have some debt, but most 25 year old students already have that. Bankruptcy takes care of medical bills. If you have nothing, losing everything you have is not much of a threat.
< redacted by kbh >
You know nothing of my life. Don’t you think if I could afford insurance I would get it. Between school, rent, bills, I have no money. Like I said. I am self relient. I don’t need or want anything the government is trying to give me. I don’t like feeling in debt to anyone especially the government. That is someone else’s money. It had to come from somewhere. There is this guy who has worked his whole life to pay for my health care. Or I work my ass of and have to pay more taxes just because I worked to get insurance. Those both sound like ****. No one takes care of themselves. Looking for someone else to do it.
< redacted by kbh >
Jo Beckstead
June 10th, 2009 at 1:24 pm · Reply
“I had a good taste of government run medical during the 19 years I spent as a military wife raising a family. Appointments were usually 2 months out and you still waited as higher ranks trumped you appointment. The emergency room was always a 2 to 6 hour wait. Please America, educate your self, forget the politics and name calling and get involved. We are losing our freedoms and record speed.”
When was the last time you went to the ER here. you are lucky to get out in 2 hours. some appointments for pediatrics GI at Duke or Chapel Hill here in NC are 4-9 months out. No other pediatrics GI around, it doesn’t matter if you have private insurance or not.
S. Bullock – per what states above: 1. 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.
So those who are not able to afford this new health care system will be put on Madicaid. But, the question has to be asked: who is going to pay for those on Medicaid that can’t afford this new health insurance?
AND:
1. 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.
Now, don’t get me wrong – I am all for helping out the person who cannot work because they are physically unable to do so, due to health issues – but, say in my case, I’m healthy and I make 45K$ a year… it states “If this were in effect in 2009, a family of four with income of $88,000 would get small subsidy.” That would mean that even though I don’t have any health issues, I would be elible for the small subsidy because I don’t make over $88,000 a year? Who’s pocket book would that money come from?
I 100% agree with you S. Bullock!
AMEN!
He did not win by a landslide, he won by 10,000,000 votes and half of those were dead people. Ever heard of voter fraud and ACORN.
Dennis,
Well put and nice research. You are the educated side of the discussion as opposed to our government who still can;t figure this out yet run headlong just for the sake of doing it. Get ready for the cliff that’s coming….
I’ve had RA for 22 years (I’m 46). Your wife should qualify for disability (Medicare)if she worked and (Medicaid) if she didn’t. There are also many drug companies who provide free or reduced medications and doctors have sometimes lowered prices for me when costs get extreme. People who have illnesses not of their own choosing, government and others do step in. Americans are generous and do not mind paying for the disabled. I try to use any visits or tests responsibly because I am subsidized by others.
So, jharp, your solution is government run health insurance.”
Not at all. And you are hurting the debate by suggesting such.
I ignored the rest of your post.
Man it is clear that you ignore alot of post. You would learn somthing if you read it. It was good. You sir are useing your daughter as a crutch for your argument instead of looking at other solutions. Wage against the machine has some pretty damn good suggestions. But I’m sure you will just read a fraction of this to and skip the rest and tell us more sob stories. A good amount of this have them. But I promise you that if you lived anywhere else in the world your daughter would not be in this good of shape. Go and get you some of that Germany manditory insurance. Then write and tell us how good it is. That is the only sure way to figure if it is a better way or not.