Tonight's Obama's big night for health care:
News Analysis - Despite Fears, Health Care Overhaul Is Moving Ahead - NYTimes.comThe senate finance committee is pushing forward with their bill. Below is a detailed summary of key policies in it. I will comment on the policies over the course of the upcoming weeks.
1. Insurance market reforms (beginning Jan 1, 2013)- Guaranteed issue in individual and small group markets; no pre-existing condition exclusions or rescissions.
- Premiums in individual and small group markets can vary by up to 7.5:1, depending only on age, tobacco use and family composition.
- Individuals with current non-group coverage can 'grandfather' such coverage and avoid new mandates
- Mechanisms for risk adjustment, reinsurance and risk corridors will be included
- Interstate sale of insurance (starting 2015) through creation of "health care choice compacts" in non-group market
- State health insurance exchanges, to which individuals, micro and small group will have access
- 4 actuarial benefit categories (Bronze = 65%; Silver = 73%, Gold = 81% and Platinum = 90%) with a separate "young invincibles" policy for young adults who desire less expensive catastrophic coverage
- Benefit minimums: preventive and primary care, physician services, outpatient, ER, hospitalization, diagnostic imaging/screenings, maternity and newborn, pediatric services (incl. dental/vision), medical/surgical care, Rx drugs, radiation, chemotherapy, mental health and substance abuse services
- No annual or lifetime caps on benefits
2. Ensuring affordable coverage (subsidies)- Sliding scale tax credits (subsidies) to families between 100-300% FPL. Max premium out-of-pocket for FPL<100 is 3% and for FPL<300% is 13%. Tax credits are tied to silver plan.
- Cost-sharing assistance available to those between 100-300%
3. Shared responsibility (mandates)- Beginning in 2013, all US citizens and legal residents required to have health insurance or pay penalty (max family penalty is $1500 for FPL 100-300% and $3800 for FPL>$3800) (exemptions for those in which lowest cost premiums exceed 10% of person's income)
- Employers with FTE >50 must either offer insurance or pay a free rider penalty set equal to the value of the tax credit for each employee taking up insurance on the exchange
4. Health care cooperatives- Federal loans to assist in start-up costs for nonprofit, member-run health insurance companies to ensure at least one co-op in every state
5. Medicaid expansion and CHIP reform- Starting Jan 1, 2014, Medicaid must cover everyone, including childless adults, up to 133% FPL
- States must maintain existing income eligibility levels for all populations until state-based exchanges become operational
- Additional federal assistance to help cover costs of new Medicaid eligibles
- CHIP beneficiaries moved into exchange in 2013 and states provide a "CHIP-wrap" to provide supplementary benefits required under CHIP
- Federal floor for CHIP eligibility is FPL 250%
- Rx drug becomes mandatory Medicaid benefit
- Medicaid Rx drug rebates would apply to Medicaid managed care orgs and increase from 15.1% to 23.1%
- DSH payments reduced 50% once uninsured population in a state is reduced by 50%. Further reductions correspond with decrease in rate of uninsured. to a max reduction of 65% relative to 2012 allotment
6. Improving quality and efficiency- Value-based purchasing in Medicare starting 2011 for:
- hospitals which ties percentage of hospital payment to performance on key quality measures
- Physicians, especially with respect to high-cost imaging services
- Medicare home health agency and skilled nursing facilities
- New patient care models
- Accountable care organizations in which provider groups can keep half of savings they achieve for Medicare program over 3-yr period
- Voluntary pilot program on payment bundling
- Hospital payment penalties for hospitals with top 25% of high-cost commonly acquired hospital infections
- Payment reductions for hospital readmissions in excess of certain benchmark
- Strengthening primary care through extra incentives/payments in shortage areas and increasing residency slots in primary care
- Scheduled 21% reduction in Medicare physician payment rates in 2010 would be replaced with 0.5% increase
- Reimbursement adjustments to Medicare physician fee schedule
7. Medicare Advantage (MA)- Re-set of MA benchmarks based on weighted average of plan bids beginning in 2014. Plans keep 100% of difference between bid and new benchmark
8. Independent Medicare commissions- Congress would have to pass an alternative proposal that yielded equivalent budget savings or commission payment recommendations would go into effect
9. Revenue provisions- High cost insurance excise tax of 35% levied on insurance companies and insurance administrators of any plan that is above $8000 for singles and $21,000 for families. The tax would apply to self-insured plans and plans sold in group market, but not to individual plans. Tax would apply to the amount of premium in excess of threshold, which would be indexed for inflation, and could be increased for high-cost states
- New nonprofit hospital requirements that would include a periodic community needs assessment
- Pharmaceutical manufacturing companies fee of $2.3 billion per year, starting 2010, allocated by market share
- Med Device manufacturers fee of $4 billion per year, starting 2010, allocated by market share
- Health insurance provider fee of $6 billion per year, starting 2010, allocated by market share
- Clinical laboratories fees of $750 million per year, starting 2010, allocated by market share, except for small businesses
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