Draft Reform Plan From Senate Finance Panel Aims To Reduce Cost
On Thursday, the Senate Finance Committee issued a draft proposal of health care reform legislation that includes an individual coverage mandate and would create consumer-owned cooperative health plans, the Washington Post reports (Montgomery/Murray, Washington Post, 6/19).
The draft proposal comes days after the Congressional Budget Office estimated that the committee's health reform plan would cost $1.6 trillion over a decade.
In an effort to keep costs under $1 trillion, the new proposal limits eligibility for health insurance subsidies to people with incomes up to 300% of the federal poverty level, rather than 400% (Reichard, CQ HealthBeat, 6/18).
The draft calls for the adoption of Senate Budget Committee Chair Kent Conrad's (D-N.D.) proposed health insurance cooperatives, instead of a public plan option. The draft would provide federal funding to help establish the consumer-owned and operated co-op health plans, and the government would expect those funds to be repaid (Edney, CongressDaily, 6/19).
The proposal would mandate that all U.S. residents obtain health coverage, with exemptions being made based on religious views and for undocumented immigrants.
Individuals who do not comply with the mandate would be subject to fines based on a percentage of the average cost of the least expensive health plan option available.
Uninsured individuals would not have to pay the fine if the lowest premium available exceeds 15% of their income. Individuals with incomes below the poverty line, undefined "hardship" cases and American Indians also would be exempt.
Under the proposal, insurers could not deny people coverage or set premiums based on health status or pre-existing health conditions.
In addition, Medicaid would be expanded to cover children and pregnant women with incomes up to 133% of the poverty level and to parents and childless adults with incomes up to the poverty level (CQ HealthBeat, 6/18).
Employer Provisions
The draft proposal includes an alternative to an employer contribution mandate that would require employers to contribute to the cost of subsidies for eligible workers in a health insurance exchange and 50% of the national average Medicaid costs for workers enrolled in the Medicaid program.
Under the draft legislation, workers could opt out of employer-sponsored health plans only if the coverage is deemed unaffordable.
If a Medicaid-eligible worker forgoes employer-sponsored health coverage, employers would not have to make contributions unless the coverage they offer is considered unaffordable (CongressDaily, 6/19).
The proposal would provide a temporary tax credit for health coverage for companies with fewer than 25 workers and whose average wages are less than $40,000 until a state health insurance exchange is created.
A small-business tax credit would be available for five years to businesses that start offering workers insurance through the exchange. The proposal gives states the option of creating multiple, competing exchanges after five years, which must be self-sustaining and approved by the HHS secretary (CQ HealthBeat, 6/18).
The committee is proposing capping the tax exemption for employer-sponsored health benefits at 10% or 20% above the cost of the Federal Employees Health Benefits Program.
The cap would take effect in 2013 and include vision and dental plans and contributions to tax-free health savings accounts, according to the draft. CongressDaily reports that proposals to cap tax-exempt benefits at the federal employee level for everyone or just individuals earning $100,000 a year are "still on the table" (CongressDaily, 6/19).
Medicare Cuts
The Senate Finance Committee also proposed a 1.5% annual reduction in projected Medicare spending, the Wall Street Journal reports (Meckler/Hitt, Wall Street Journal, 6/19).
If that goal is not met, "an automatic mechanism would be triggered to achieve those spending reductions," according to the proposal. Â
The committee is proposing to allow the Medicare Payment Advisory Commission to suggest policy changes would get an up-or-down vote in Congress (Pear, New York Times, 6/19).
Baucus Courts GOP
Senate Finance Committee Chair Max Baucus (D-Mont.) is consulting with Republican members in hopes of adding them to what he calls "the coalition of the willing," which will work with him in crafting and passing bipartisan health care reform, CQ Today reports.
Baucus met Thursday with Sens. Chuck Grassley (R-Iowa), Orrin Hatch (R-Utah) and Olympia Snowe (R-Maine), and staff members of Sen. Mike Enzi (R-Wyo.), to discuss the draft proposal.
Snowe said Baucus is "looking to create bipartisanship and building a consensus, and not just a handful of Republicans," adding, "You just have to start in committee" (Armstrong/Wayne, CQ Today, 6/18).
On Thursday, the Washington Post examined Grassley's work with Baucus in crafting health reform legislation and his opposition to some of President Obama's health care proposals (Murray, Washington Post, 6/19). This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.