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The House Releases Its Health-Care Reform Bill

demchairs.jpg

On first glance, it looks good. A few thoughts:

The Process Is the Message: Three separate committees -- Energy and Commerce, Ways and Means, and Education and Labor -- have come together on one bill. This is an incredible achievement. If you read histories of the 1994 health-care reform fight, all of them have a substantial section on the committee crack-up: One passed a version of single-payer, another a variant of Bill Clinton's reform, another went further to the right. There was no unity.

There is unity now. And if it holds -- if the House of Representatives manages to pass this plan with a substantial majority of enthusiastic Democrats -- that significantly strengthens the House's hand in its eventual negotiations with the more fractious Senate. That's a big "if." But so too would have been the idea that three separate committees could cooperate on a bill of this size.

The Public Plan: You can download a summary sheet here. The public plan -- which is really three, or maybe four, insurance plans -- pays Medicare rates to hospitals (and Medicare rates plus five percent to physicians -- thanks to Marci Wheeler for the correction) for the first three years and then begins negotiating on its own. It is open to anyone with access to the Health Insurance Exchange.

The Benefit Packages: This is why I say there could be three, even four, public plans. Within the Health Insurance Exchange, the basic plan that everyone needs to offer is, well, the "basic plan." On first glance, it's pretty comprehensive: It has to be equal in value to the prevailing employer-based insurance in the area. Cost-sharing cannot exceed $5,000 for individuals or $10,000 for families in the first year (it can then grow by the rate of inflation each year after that). It is heavily regulated. And then there is an "enhanced" plan above it, with less cost-sharing, and then a "premium" plan above that, with even less cost sharing, and then a "premium-plus" plan above that. Of these, only the "premium-plus" plan can vary in benefits, as opposed to vary in cost-sharing. The public plan can offer all levels of plan.

The Health Insurance Exchange: It's run nationally, though states can opt out of the national structure and go it alone if they choose, and if they follow federal rules. In the first year, it accepts those without health insurance, those who are buying health insurance on their own, and small businesses with fewer than 10 people. In the second year, it accepts small businesses with fewer than 20 people. After that, "larger employers as permitted by the Commissioner." In other words, expansion is discretionary, not mandated. The only people able to access the public plan in the early years will be on the exchange, and the exchange will be, relative to the population, pretty limited. So the public plan will be limited, and so too will any anticipated savings.

Affordability and Subsidies: The House bill has subsidies up to 400 percent of poverty, which is equal to $43,320 for an individual and $88,200 for a family of four. At the bottom end -- 133 percent if income, as below that, you're eligible for Medicaid -- the subsidies limit your health premiums to 1.5 percent of income. At the top end -- 400 percent -- it's no more than 11 percent of income. Speaking of the out-of-pocket cap, all of the benefit packages -- from the "basic" plan on upward -- cap total costs for members. So if you're not eligible for subsidies, you're still going to be protected from catastrophic health-care costs.

CBO Score: The Congressional Budget Office has released its estimates for the coverage side of this bill. They project that within 10 years, it will cost $1 trillion and cover 97 percent of the legal population.

Revenue: If I'm reading this correctly, about half is paid for through $500 billion or so in savings from Medicare and Medicaid. The rest comes from a surtax on the richest 1.5 percent. The surtax is 1 percent on income between $350,000 and $500,000; 1.5 percent on income between $500,000 and $1,000,000; and 5.4 percent in income above $1,000,000. The surtax can vary if the bill is less or more expensive than initially anticipated. There are also revenue expectations from the employer and individual mandates, though they're relatively modest ($200 billion over 10 years is one estimate I've heard).

You can download the full bill here. There are a whole lot of fact sheets and summary documents here, though I'm not finding them very helpful. I'd like to see if we could crowdsource this a bit: Dig through the legislation and tell me, either in comments or over e-mail, of anything particularly interesting that you'll find. I'll pull important nuggets and discoveries onto the front page.

Photo credit: Susan Walsh -- Associated Press Photo .

By Ezra Klein  |  July 14, 2009; 4:22 PM ET
Categories:  Health Reform  
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Next: The Tri-Com Bill Gets Scored

Comments

Well, I'm sad to see that access to the public plan isn't going to be wide open, but I suppose it's to be expected.

Ezra, do you know if the Affordability standards described here:

http://edlabor.house.gov/documents/111/pdf/publications/AAHCA-AFFORDABILITY-071409.pdf

apply to those in private plans? My private plan is really really expensive.

Posted by: bluelantern23 | July 14, 2009 4:55 PM | Report abuse

have to say. . .it doesn't suck. Doesn't suck at all. The one question I have is people 133 percent & below. Are *all* of these people already signed up on Medicaid? If not, why not? And is it possible to have some alternatives to Medicaid in this segment?

Posted by: roublen | July 14, 2009 5:23 PM | Report abuse

Well it has significantly more coverage than the Kennedy-Dodd bill (for side by side comparison I have the CBO scoring of the House Bill here: http://angrybear.blogspot.com/2009/07/house-tri-committee-health-care-bill.html
and HELP Bill here: http://angrybear.blogspot.com/2009/07/kennedy-dodd-help-bill-with-cbo-scoring.html

The coverage percentages are for legal NON-ELDERLY. So that 97% might in fact be somewhat higher it taken over the whole population. Either way pretty impressive. I was a little under-impressed with the equivalent HELP score of 90% coverage, that seemed quite a distance from Universal anything, though of course a big improvement from the status quo.

Posted by: BruceWebb | July 14, 2009 5:54 PM | Report abuse

Public plan if you make $43,320 per month: $397.10 per month. 11% of your annual income for healthcare. Way too much. This legislation is devolving into little more than mechanism to impose price controls on private insurers. I fail to see how this helps the 50 million people who now can't afford health insurance to better afford it.

If I were a private insurer, I'd be calculating the profits the individual mandate's going to give me when I give all those folks making between $25,000 and $43,320 a slightly better deal than they can with the public option.

This is really crappy health reform.

Posted by: NealB1 | July 14, 2009 5:54 PM | Report abuse

From the AP Article:

"The plan would slow Medicare and Medicaid payments to medical providers. From big hospitals to solo physician practices, providers also would be held to account for quality care, not just ordering up tests and procedures. Insurance companies would be prohibited from denying coverage to the sick. "

Um, and who exactly is going to determine what tests and procedures are actually necessary?

The insurance companies are already doing that, and actually doing a pretty cr@ppy job. Unless there are active doctors providing information on what an appropriate diagnostic set and procedure is for any given illness, this is just going to be a disaster.

Yes, some doctors just over-test. Many, however, do NOT. Many would like to practice a lot of preventive medicine, some things which might be seen as over-testing or too procedural. The fact is, some tests and procedures are prescribed appropriately, even if business people don't think it is so. Or doctors and hospitals have to run the tests or do the procedures because they are open to massive malpractice liability. What are the protections for doctors and other health-care professionals in this bill?

And while it's good they won't let insurance companies deny coverage to the sick, but what are their rates going to be? Will there be a cap or a set rate scale? If the insurance is exorbitant, then people won't buy it anyway, defeating the purpose of this concept.

This is too, too rushed.

Posted by: Chasmosaur1 | July 14, 2009 5:56 PM | Report abuse

Ezra, I work on electronic transactions and went immediately to the administrative simplification section with a tingle running through me, and I really like what I found. Here is a condensed version with running commentary:

Standards shall:
-be unique with no conflicting or redundant standards, no additions or constraints like companion guides (a listing of the insurance company’s unique “standards”, which, yes, is an oxymoron), must require minimal augmentation by paper transactions or clarification by further communications (phone calls with hours of waiting time), enable the real-time determination of an individual’s financial responsibility at the point of service and, to the extent possible, prior to service, including whether the individual is eligible for a specific service with a specific physician at a specific facility (what a concept!)
-enable, where feasible, near real-time adjudication of claims (wow!)
- describe all data elements, such as reason and remark codes, in unambiguous terms, not permit optional fields, require that data elements be either required or conditioned upon set values in other fields, and prohibit additional conditions (this is a source of a lot of administrative waste currently)
-harmonize all common data elements across administrative and clinical transaction standards. (Harmonize! Will billing office staff sing Age of Aquarius like at the end of The 40 Year Old Virgin?)

The standards under this section shall be developed, adopted and enforced so as to—
-align data on paper and electronic versions of standardized (no, it’s not the case now)
-require timely and transparent claim and denial management processes, including tracking, adjudication, and appeal processing (this is like Christmas for my kind…)
- require the use of a standard electronic transaction with which health care providers may quickly and efficiently enroll with a health plan to conduct the other electronic transactions provided for in this part; and

Secretary shall submit to the appropriate committees of Congress a plan for the implementation and enforcement, to include—
-an enforcement process that includes timely investigation of complaints, random audits to ensure compliance, civil monetary and programmatic penalties for non-compliance consistent with existing laws and regulations, and a fair and reasonable appeals process building off of enforcement provisions under this part. (enforcement is pretty near non-existent now)

Enforcement remains to be seen, but this has about everything I would want in it to help improve efficiency in my little world, a very pleasant surprise and an indication that someone knows what they are doing.

Posted by: chrishvt | July 14, 2009 6:36 PM | Report abuse

Every American citizen should be able, regardless of employment or location, to use the public plans.

Period.

And all doctors practicing on American soil should be required by law to accept any patient who shows up at their doorstep for treatment for something covered in the public plans.

Period.

Posted by: WillSeattle | July 14, 2009 6:39 PM | Report abuse

'At the top end -- 400 percent -- it's no more than 11 percent of income. Speaking of the out-of-pocket cap, all of the benefit packages -- from the "basic" plan on upward -- cap total costs for members. So if you're not eligible for subsidies, you're still going to be protected from catastrophic health-care costs.'

There are probably hundreds of thousands of "mom and pop" business owners who are drafting their "Dear John" letters to their current Private Health Insurance Companies.

Posted by: Odquest | July 14, 2009 6:52 PM | Report abuse

If you would like to help pressure Congress to pass single payer health care please join our voting bloc at:
http://www.votingbloc.org/Health_Bloc.php

Posted by: letsgobuffalo | July 14, 2009 7:21 PM | Report abuse

I agree with poster WillSeattle at 6:39. This is just more of the same incomprehensible, intentionally convoluted, insanely expensive (for the consumer) NONSENSE, still giving better options to the wealthier among us while leaving millions out.

COWARDS! Why is it that Japan, New Zealand, England, Canada, France, etc. etc etc... EVERY Western industrialized nation on Earth...even Guatemala for X*#^ sake... treat their citizens better than we do in the United States? Barack! My Man! You've got 60 votes! DO SOMETHING! GO FOR IT! BE A LEADER! And by the way... as a lifelong Democrat I'll repeat... With the exception of a handful of good folks like Maxine Waters, Dennis Kucinich, Barney Frank and John Conyers, DEMOCRATS ARE COWARDS. Spineless, bought and sold COWARDS.

Posted by: edfou5 | July 14, 2009 7:50 PM | Report abuse

As a Biotech CEO , I can tell you our company will be one of the first to sign up under the health exchange! I am tired of having 30-40% increases a year in premiums with no improvement in service or coverage!

Posted by: eaarwt_1998 | July 14, 2009 7:56 PM | Report abuse

Section 202 provides that once you are eligible for the public option, you stay eligible, even if your employer expands her payroll beyond the cutoff number or is swallowed up by a bigger firm. In practice, pressures from employers would drive a rapid expansion of eligibility.

Census data on employees by size of firm here: http://www.census.gov/epcd/www/smallbus.html. A big gain would come from expanding access to firms with <100 employees (doubles the pool from 20m to 40m).

Posted by: JamesWimberley | July 14, 2009 8:05 PM | Report abuse

Some interesting points, especially for drugs

1181 Part D

• Gradual phase out of the donut hole over more than a decade
• In the mean time, as previously announced, 50% discount in the original donut hole, paid to plans by drug companies
• Counts as TROOP (Orwell stalks!)
• Rebate as-if DEs were back in Medicaid. Clever fix, rather than actually putting them back in Medicaid Rx. (What happens to State supplemental rebates for DEs?)

1185 - if they change formulary mid year, you can change your part D plan. Good consumer protection standard. Could be stronger to include big price changes mid-year.

1221 LEP study on Medicare reimbursement; HHS and IOM report; demo grants. Fills a need for our large limited-English proficiency health needs

Sec 1445 Sunshine Act (quite similar to Grassley)

-March 2011 first report (why wait?)
-2 year delayed reporting compromise on product investigations and clinical trials
-reporting physician ownership in entities that bill medicare (fraud & abuse backstop)
-nice transparency and public access provisions
-provider error corrections, like credit reports
-sampling covered, but special confidentiality provision
-0.1% of revenues cap on penalties for knowing failure
-clinical investigation definition is too broad (permits delay for seeding trials)
-included reporting on payments to patient and disease groups (excellent addition)
-$5 de minimus (even small gifts matter!)
-pre-empts States for the fed reporting dataset; states can require additional info

1461 public reporting of hospital & ASC -associated infection data (should include LTC)

2501 Expanded 340B

Kevin Outterson, BU Law


Posted by: eunomia | July 14, 2009 10:39 PM | Report abuse

One more Rx note:

In the public plan, HHS will directly negotiate Rx prices. No overall repeal of the Part D "non-interference" ban on direct negotiations (that I can find on a quick read)

Posted by: eunomia | July 14, 2009 10:52 PM | Report abuse

THIS IS IT!

The healthcare reform bill released by the House Of Representatives is an excellent bill as I understand it. It is carefully written, and thoughtfully constructed, informed, prudent and wise.

This is the type of bill that all Americans can feel good about. And this is the type of bill that has the potential to dramatically improve the quality of healthcare for all Americans. Rich, middle class and poor a like. Democrats, Republicans, Independents, and all other party affiliations. This bill has the potential to dramatically improve the quality of life of every American.

The house healthcare bill should be viewed as the minimum GOLD STANDARD by which all other proposed healthcare legislation should be judged. All supporters of true high quality healthcare reform should now place all your support behind this healthcare reform bill released by the United States House Of Representatives, as the minimum Gold standard for healthcare reform in America.

You should all now support this bill with all your might, and all of your unrelenting tenacity. This healthcare bill is a VERY, VERY GOOD! bill for all of the American people. Fight tooth, and nail for every bit of this bill if you have too. Be aggressive, creative, and relentless for this bill.

AND FIGHT!! like your life and the lives of your loved ones depends on it. BECAUSE IT DOES!

SPREAD THE WORD

(http://www.youtube.com/watch?v=RSM8t_cLZgk&feature=player_embedded)

God Bless You

Jack Smith — Working Class

Posted by: JackSmith1 | July 14, 2009 11:46 PM | Report abuse

I'm trying to figure out what's so good about this. I've had non-profit insurance from salaried doctors since I was 24, and during my first pregnancy, I was a foreign student in Germany and had their great healthcare plan. This reminds me much too much of the horrors of the Medicare drug plan, with all of us trying to compare different combinations of plans to try to meet our RX needs. Anyone who has had a system like Kaiser, where you walk in, show your card, pay a small co-pay, and get everything from mammograms to blood checks for cholesterol to eye exams to regular checkups, and never see paperwork would really hate this. What about going to the hospital for a procedure, paying $200 and then getting no more bills.

We need a system where the doctors, as they are at the Mayo Clinic, Kaiser, etc, are on salary so they aren't tempted to order unnecessary procedures. We need a system, like Kaiser, where all the records are on computer, and where you can go, as I do, on the web and look up my test results, make appointments, email my Doctor, ask questions, get health information that matches my diagnosis, etc.

Cut the complexity. I don't care nearly as much if it's single payer as I do that it's simple, good care, and I don't have a lot of paperwork and clerks deciding what the Doctor can do.

I don't really feel much like fighting for this.

Sharon Toji

Posted by: SharonToji | July 15, 2009 12:08 AM | Report abuse

I am a health insurance agent in Texas. None of my employers can accept another added tax. They report back to http://www.healthinsurancetexas.biz that they will lay off people or hire only 1099ers

Posted by: mikeoliphant | July 15, 2009 12:30 AM | Report abuse

everything ive read regarding the limitations of availability for the public plan and the effect this bill has on those making more then $40k (although that's sure to drop during reconcilliation) in the individual market sure sound horrible. we deserve better. it's just 1018 pages of compost that people arent expecting to read all of. bad reform is worse then no reform.

Posted by: PindarPushkin | July 15, 2009 1:48 AM | Report abuse

I read the public option section.

Here are some highlights;
1. only available to those getting some subsidy (ie: making less then $40k (and sure to come down).
2. administration of the plan is completely contracted out.
3. no real prescription drug negotiating authority
4. payments set at medicare rates for 5 years and then made equal to what other plans are paying.
5. only doctors/hospitals included are those that accept medicare/aid

this is horrible for the self employed and the middle class. all the cost saving reasons for a public option are taken out or neutered.

Posted by: PindarPushkin | July 15, 2009 2:47 AM | Report abuse

It would be nice if someone would either show how to interpret this or flesh it out in plain language...co-pays, deductibles, etc.

From what little I can understand right now, I might be paying something like $450 a month for $5000 deductible insurance. That's considerably better than what I have been paying (self-insured) but it would have been a lot more useful before the insurance company took everything I had. Even though those figures would be a real savings if I still had $5,000 a year to pay deductibles, I can't help thinking that I could be paying even $300 more a month in taxes for a single payer plan and be much better off.

I guess I'd be a bit more grateful if my government, rather than protecting the health care industry had offered something reasonable 10 years ago before I shelled out $72,000 in premiums alone and stopped going to the doctor because of a $7,500 deductible.

Posted by: dogdiva | July 15, 2009 7:25 AM | Report abuse

Here's the trigger:

(page) 83
1 (1) IN GENERAL.—The Commissioner shall conduct a study of access to the Health Insurance Exchange for individuals and for employers, including
4 individuals and employers who are not eligible and
5 enrolled in Exchange-participating health benefits
6 plans. The goal of the study is to determine if there
7 are significant groups and types of individuals and
8 employers who are not Exchange eligible individuals
9 or employers, but who would have improved benefits
10 and affordability if made eligible for coverage in the
11 Exchange.
12 (2) ITEMS INCLUDED IN STUDY.—Such study
13 also shall examine—
14 (A) the terms, conditions, and affordability
15 of group health coverage offered by employers
16 and QHBP offering entities outside of the Exchange compared to Exchange-participating
18 health benefits plans; and
19 (B) the affordability-test standard for access of certain employed individuals to coverage
21 in the Health Insurance Exchange.
22 (3) REPORT.—Not later than January 1 of Y3,
23 in Y6, and thereafter, the Commissioner shall submit to Congress on the study conducted under this
25 subsection and shall include in such report recommendations regarding changes in standards for
2 Exchange eligibility for for individuals and employers.

Posted by: eRobin1 | July 15, 2009 9:52 AM | Report abuse

"I am a health insurance agent in Texas. None of my employers can accept another added tax. They report back to http://www.healthinsurancetexas.biz that they will lay off people or hire only 1099ers"

All hat, no cattle. Look plenty of people play games with 1099ers. And plenty of people get away with it. But the rules are pretty strict and some of those people are only a whistle-blower call away from being staring back at the face of an IRS auditor.

You want employees to show up when you want, do what you want, for however long you need them to. They are not 1099s. And for those who are in fact legitimate 1099s? With a public option they don't need you to start with.

These blowhards are just playing their own version of 'Go Galt'. If you want to run a business you mostly need employees. Holding your breath until you turn blue while stamping your snake-skin boots on the floor in the end doesn't buy you much. Under the Tri-Committee bill you either buy insurance for your employees or pay taxes/penalties/fees/whatever so they can buy insurance on their own. And bud? Neither you nor your Texas customers have to like it.

Posted by: BruceWebb | July 15, 2009 10:34 AM | Report abuse

Sharon Toji is right. We need more doctors like Deadwood's Doc Cochran. The dude shows up and gets it down and if he gets paid then all the better, but he's not expecting it.

I work for a company of less than 10 people (which fortunately pays 100% of health benefits.) If something goes wrong with a product, or someone needs training, we don't whip out the billing sheet and find out how many hours it took to complete. Compare that to the bigger companies (and your average law firm or hospital) where its all about billable hours. We need more consistency in the delivery and payment, starting from physician and staff salaries. Profits in health care delivery ought to be second nature at best.

Posted by: Adrock1 | July 15, 2009 2:40 PM | Report abuse

We need this Now in healthcare for AMericans,,,soon the Boomers will be upon us...many of them will not be able to afford the premiums now offered along with their medication, doctor bills and rising
utilites, healthcare premiums. I know this is true because I retired in 2006 and could not afford the cobra (now way) my family opt to pay for my healthcare until I was 65, I can never repay them for their help. We are now only living on our Soc Security and Medicare and suppl policies, they do not pay for everything, there are donut wholes, deductibls, out of pocket and premiums keep going up...there is no way the average person will be able to keep up with rising cost...you must do something now before the Boomers start retiring...there has to be a system in place do not ignore the situation like they have in the last 20 years. It will be catostophic if you do. You dont have to be a genius to figure that out.

Mrs. Stanton
Oak Lawn IL

Posted by: STANTONCAROL | July 16, 2009 2:51 PM | Report abuse

"None of my employers can accept another added tax. They report back to http://www.healthinsurancetexas.biz that they will lay off people or hire only 1099ers"

Mike Oliphant, I suppose it doesn't matter that now all those 1099ers (like me) now will actually be able to GET insurance, while we weren't before?

Employers are providing less and less insurance anyway. I bet they'll actually end up saving money-- how about you run the numbers on that? Many employers are paying $700 a month for health insurance for EACH covered employee and family. Run the numbers and let us know if a tax will be more than that.

I know it's going to ruin your business. I'm sorry about that. But at least you've got some time to retrain or find another industry. And really, you know, if your employers had done a better job (not YOU) serving their customers, they wouldn't be staring at a future where customers are actually allowed to go elsewhere.

Posted by: lister1 | July 20, 2009 11:46 AM | Report abuse

We need this Now in healthcare for AMericans,,,soon the Boomers will be upon us...many of them will not be able to afford the premiums now offered along with their medication, doctor bills and rising
utilites, healthcare premiums. I know this is true because I retired in 2006 and could not afford the cobra (now way) my family opt to pay for my healthcare until I was 65, I can never repay them for their help. We are now only living on our Soc Security and Medicare and suppl policies, they do not pay for everything, there are donut wholes, deductibls, out of pocket and premiums keep going up...there is no way the average person will be able to keep up with rising cost...you must do something now before the Boomers start retiring...there has to be a system in place do not ignore the situation like they have in the last 20 years. It will be catostophic if you do. You dont have to be a genius to figure that out.

Mrs. Stanton
Oak Lawn IL
-------------------------------------------
Perhaps you should have thought about this prior to retiring. Just because you didn't want to work until your federal benefits kicked in does not give you the right to expect taxpayers to cover your short comings. Go out get a part time job and pay for your own benefits until you are 65.

Posted by: KMH2305 | July 21, 2009 4:14 AM | Report abuse

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