Key Senate Committee Shopping Around Draft Health Reform Proposal

The Senate Health, Education, Labor and Pensions Committee has begun circulating a preliminary version of a health reform bill that would create a government-run insurance plan, require individuals to have insurance and have employers cover some of the cost of workers' coverage, the New York Times reports.

According to Anthony Coley, spokesperson for HELP Committee Chair Edward Kennedy (D-Mass.), the measure is "a draft of a draft" and Democratic members of the committee "are still actively talking among themselves and Republican colleagues."
Elements of the proposal are highlighted below.

Expanding Coverage

• Individuals who do not obtain insurance would be subject to financial penalties, added to their tax bill and collected by the Internal Revenue Service, unless "affordable health care coverage is not available" or if premiums would cause "an exceptional financial hardship";
• Medicaid would be expanded to cover uninsured people with incomes up to 150% of the poverty level; and
• A new insurance program would be created to provide home- and community-based care for 10 million people with severe disabilities (Pear, New York Times, 6/6).

Issues Related to Cost, Payments

• State-level insurance exchanges, called "connectors," would be established -- modeled on those enacted in 2006 in Massachusetts -- allowing individuals to shop for insurance plans;
• Subsidies would be available on a sliding scale for families who have incomes below 500% of the federal poverty level (Connolly, Washington Post, 6/6);
• Employers would have to contribute to the cost of workers' health insurance, although exemptions would be available for small businesses that meet unspecified qualifications (Reichard/Wayne, CQ Today, 6/5); and
• A new health insurance plan operated by the federal government would give hospitals and doctors rates equal to Medicare payments, plus 10%.

Insurance Regulations

• Insurers in most cases would be required to offer "essential benefits" determined by a new Medical Advisory Council and approved or rejected as a whole by Congress, including physician services, hospital care, maternity care, infant care, prescription drugs, and mental health and substance use services (New York Times, 6/6);
• Insurers would be required to spend a minimum amount of revenue from premiums on patient care;
• People with pre-existing health conditions could not be refused coverage by private insurers, nor could insurers charge higher premiums based on sickness, gender or employment -- only age, marital and family status, benefit levels and place of residence would be allowable determinants of premiums;
• States could levy penalties against insurers found to be accepting a disproportionate number of applicants who have a low risk of becoming sick and reward those accepting more applicants with a higher risk of getting sick;
• Insurers also would have to allow consumers to renew or change their policies each year;
• A "declaration of rights" would ensure that patients can choose their doctors and that medical providers, not insurers, make treatment decisions (CQ Today, 6/5); and
• Federal officials would regulate marketing of private insurance plans.

The bill also specifies that "nothing in this act shall allow federal payments" for undocumented immigrants (New York Times, 6/6).

The draft bill, titled "American Health Choices Act," does not include details of its cost or how it would be funded.

Timeline

Committee members are scheduled to mark up the bill starting June 16, while the Senate Finance Committee is expected to release its plan on June 17 and begin mark ups on June 22 (Washington Post, 6/6).

Unlike the HELP Committee, the Finance Committee must include a plan for funding health reform in its version of health reform legislation (Bendavid/Adamy, Wall Street Journal, 6/8).

Reaction

Sen. Ron Wyden (D-Ore.) said, "Sen. Kennedy is on the cusp of achieving his dream, a fight he has led for four decades. What's needed now is a lot of heavy lifting to make sure the legislation creates a path to affordable coverage."

However, Rep. Jim Cooper (D-Tenn.) said that the proposal is too far-reaching in its offerings and could not be practically implemented. He also said the employer mandate would harm both business and workers, adding, "Congress just doesn't get it."

Neil Trautwein, a vice president of the National Retail Foundation, said he is disappointed that after spending "scores of hours in the Kennedy workhorse meetings," the committee is proposing a "lot of the same old tired ideas we have fought against for many years."

Trautwein added that the business community will "do everything we can to block" requirements that employers help workers pay for coverage (Connolly, Washington Post, 6/7).

Julius Hobson, a lobbyist for doctors and hospitals, said, "It's nice to have all these bipartisan meetings," but "when you get down to the actual writing, that's where it (can) start to fall apart."