The Obama administration defended its healthcare overhaul law before the U.S. Supreme Court on Friday, rejecting arguments by critics who warned that if the government can require people to have health insurance, it might next make them eat broccoli.

Administration attorneys, in court filings and at a briefing, said Congress was within its constitutional powers in requiring Americans to buy insurance by 2014 or pay a penalty, a centerpiece of the law known as the individual mandate.

The law’s opponents have argued that Congress overstepped its authority and have raised the hypothetical question of whether Congress next could require that all Americans eat broccoli because of the nation’s obesity crisis.

The Supreme Court has scheduled three days of oral arguments in the legal battle for March 26-28, with an election-year ruling expected by the end of June.

The law, Obama’s signature domestic policy achievement, seeks to provide health insurance to more than 30 million previously uninsured Americans. His prospective Republican presidential opponents all have strongly opposed the law.

A Supreme Court ruling striking down the law would be a major political and legal setback for Obama ahead of the election, while a decision upholding it would be vindication. Polls show Americans deeply divided over the law.

A senior administration official, who declined to be identified, told reporters that Congress, in adopting the law, responded appropriately to a national crisis after years of debate.

The broccoli hypothetical has “no relevance to the case at hand,” the official said, maintaining that the insurance purchase requirement was “not the same” as mandating that people eat or buy broccoli.

The healthcare law has been challenged by 26 of the 50 states and by an independent business group as an unprecedented move by Congress that exceeds its constitutional powers.

The states involved in the challenge, in a Supreme Court brief, on Friday said the entire law, which President Barack Obama signed in March 2010, should be struck down.

“The individual mandate is the centerpiece of the entire federal health care act,” said Attorney General Pam Bondi of Florida, a state that has led the legal challenge.

“If the court removes the individual mandate, the main hub of the act, the entire health care law must be invalidated.”

The administration’s arguments in its brief backing the law largely mirrored those previously made in its initial appeal to the Supreme Court filed at the end of September.

The attorneys said the law was an attempt by Congress to address a crisis in the national health care market, capping nearly a century-long effort to expand access to health care by making affordable health insurance more widely available.

They cited statistics showing that healthcare accounts for 17 percent of the nation’s economy and argued that the law was a valid exercise of Congress’s power under the Constitution to regulate economic activity affecting interstate commerce.

The brief also cited a law that Massachusetts adopted in 2006 when Mitt Romney was governor. Romney is the frontrunner for the Republican presidential nomination to face Obama in the November elections.

The brief said Congress cited the Massachusetts law as a model for key provisions, including the provision requiring that individuals purchase insurance or pay a tax penalty.

Opponents of the law also filed briefs with the Supreme Court on Friday.

The conservative American Center for Law and Justice filed a brief on behalf of 117 Republican members of the U.S. House of Representatives and 100,000 of the center’s supporters urging the justices to declare the entire law unconstitutional.

Thirty-six Republican U.S. senators said in a separate brief the entire law must fall if the individual mandate is struck down.

The Supreme Court cases are National Federation of Independent Business v. Sebelius, No. 11-393; U.S. Department of Health and Human Services v. Florida, No. 11-398; and Florida v. Department of Health and Human Services, No. 11-400.

For National Federation of Independent Business: Michael Carvin of Jones Day.

For Sebelius and the Department of Health and Human Services: Donald Verrilli Jr, Solicitor General of the United States.

For Florida: Paul Clement of Bancroft.

(Original Source from Reuters)

Tags: Healthcare Law, Healthcare Reform 2012, Obama Healthcare Reform Supreme Court, Obama Lawyers Defend Healthcare Law In Supreme Court

(Reuters) – The breakdown of deficit talks in Congress will exact little pain on the U.S. healthcare industry, but it’s a temporary reprieve from steeper cuts that could be put back on the table in 2013.

The failure of the congressional “super committee” to reach a deal triggers a 2 percent across-the-board cut to Medicare, the government program that provides coverage to millions of older and disabled Americans.

That translates into about $123 billion over the next decade — far lighter than the $500 billion to $700 billion in cuts that could have hit hospitals, doctors and beneficiaries, as well as insurers, drugmakers and nursing homes, if the panel had reached a deal.

But the writing is on the wall for deep healthcare cuts, as the nation’s population ages and draws on federal benefits.

If nothing changes, Medicare, Medicaid and Social Security will devour 100 percent of all tax revenues by 2047, according to the non-partisan Government Accountability Office.

“Congressional staffers and members have been pretty direct with healthcare industries: If you’re not on the list now, you probably will be later,” said Washington-based financial analyst Ipsita Smolinksi.

For the time being, the automatic cuts slated to begin in 2013 will be little more than a nick for both the health industry and politicians loathe to pull back Americans’ health benefits ahead of elections next year.

“Two percent is not a lot for Medicare to absorb. About all that happens is a few more providers, like doctors and hospitals, stop accepting new Medicare patients,” said Joseph Antos of the conservative American Enterprise Institute.

“It’s light compared to what we’ve seen with really big pieces of deficit reduction legislation in the past, particularly in the 1990s,” he added.

HOSPITALS, DOCTORS HIT BY CUTS

As stipulated, automatic cuts are likely to hit hardest among hospitals, which are the biggest recipients of Medicare payments and account for nearly 50 percent of program spending, federal statistics show.

Hospital company stocks including HCA Holdings (HCA.N) and Health Management (HMA.N) moved lower with the broader market in trading on Monday.

Doctors suffer a double whammy from the collapse of the super committee. Physicians and clinics receive about 25 percent of Medicare spending.

Further, the breakdown in negotiations quashed hopes among doctors that the panel would eliminate an almost 30 percent cut in Medicare payments scheduled to go into effect in January under a 1997 balanced budget law.

A so-called permanent “doc fix” would have cost nearly $300 billion in lost savings, making it unlikely at a time of deficit reduction.

Analysts said the best healthcare providers can hope for is another short-term fix to stave off the payment reductions.

The automatic cuts would also reduce funding for insurers that participate in Medicare Advantage, a program segment that allows senior citizens to purchase private insurance.

PUNTING THE MAJOR CUTS

Analysts and lobbyists said the deeper pain for the healthcare sector is expected after the 2012 elections, when many expect Congress and the White House to face new calls to contain the deficit and the growing U.S. debt.

“There is no doubt that this will mean there will be enormous pressure in 2013,” said Ron Pollack of Families USA, a healthcare consumer advocacy group.

That could give new life to proposals to save more than $100 billion by raising copays, premiums and private insurance costs for beneficiaries of Medicare’s fee-for-service system.

Higher beneficiary costs could reduce the ability of millions of Americans to seek care from doctors, hospitals and nursing homes. But analysts say it could also benefit private insurers by making traditional Medicare less affordable.

If revived, a $135 billion proposal to extend Medicaid drug rebates to Medicare beneficiaries would mean a 2 percent to 7 percent hit to drug company revenues, according to a recent report from Moody’s Investors Service.

Hospitals could again face $9 billion in cuts to Medicare spending for medical education and another $20 billion in reduced federal support for coping with bad debts.

Tags: 2013 Healthcare Changes, Healthcare Reform Changes

2012 Highlights:

Most elderly Americans covered by the U.S. government’s Medicare insurance program will see a smaller-than-expected rise in their monthly premiums next year, health officials said on Thursday.

Standard premiums for Medicare Part B, which covers doctor visits, outpatient services and some home healthcare, will be $99.90. For most Part B beneficiaries, that means paying just $3.50 a month more, compared to the $10.20 that was expected.

The annual Part B deductible will decrease by $22 to $140, U.S. Department of Health and Human Services officials said.

For newer and higher-income Medicare enrollees, the new standard premium represents a drop of $15.50 a month from $115.50 a month they have been paying in 2011.

A majority of Part B beneficiaries have had their premiums frozen since 2008 at $96.40 a month because the federal government-run Social Security retirement plan made no cost of living adjustments (COLA). A special provision links Part B payments with the checks from which they usually get deducted.

Last week, U.S. seniors found out their COLA checks will see a 3.6 percent bump in 2012, and many worried that the awaited increase would get gobbled right up by an expected Medicare premium hike.

Instead, the return of COLA payments means the new Part B costs are again spread among all Medicare members, not just newer and higher-income beneficiaries.

“More people are sharing in the smaller-than-expected increases in costs,” said Dr. Don Berwick, the Centers for Medicare and Medicaid Services administrator, who said the healthcare reform passed last year also helped limit costs.

The surprisingly modest premium increase announced on Thursday could lift some pressure from President Barack Obama and fellow Democrats in Congress as they seek to win over U.S. seniors ahead of the 2012 election.

“Millions of America’s seniors are struggling with higher expenses … and this small increase is welcome news,” AARP legislative policy director David Certner said in a statement.

AARP, the leading lobby group for American seniors, still fears deep cuts to Medicare and Social Security may emerge from a Congressional “super committee” tasked with finding ways to cut U.S. debt.

Some 44 million Americans were enrolled in Medicare Part B in 2010 when the program’s benefits spending reached almost $210 billion, according to the 2011 Medicare Trustees’ report. The U.S. government covers about three-quarters of Part B benefits, while the premiums paid by seniors cover the rest.

Tags: 2012 Medicare Part B premium rise, 2012 Medicare Premium Increase, Medicare increase 2012

Republicans in the House of Representatives on Friday accused the AARP of gaining financially from President Barack Obama’s healthcare overhaul, which the powerful advocacy group for older Americans supported.

Republican members of a House Ways and Means subcommittee grilled AARP Chief Executive Officer Barry Rand and AARP President Lee Hammond on the nonprofit organization’s health insurance operations.

Rand defended the group’s public policy positions and said money received from insurance licensing agreements was used to fund social-welfare programs for AARP’s 37 million members.

Republicans argued that the group would gain financially by cutbacks in the law to the Medicare Advantage program that delivers Medicare health benefits through private insurers.

“The facts show AARP no longer operates like a seniors’ advocacy organization,” said health subcommittee Chairman Wally Herger, a California Republican. “Instead, it more closely resembles a for-profit insurance company.”

Herger was referring to a report on AARP finances and operations that he wrote with fellow Republican Representative Dave Reichert and which was released this week. They have asked the Internal Revenue Service to investigate AARP’s tax-exempt status as a nonprofit organization.

Democrats questioned the motives of Republicans for holding the hearing, saying it was political payback for supporting Obama’s healthcare restructuring.

“Your sin … is that you backed the Affordable Care Act,” Democratic Representative Jim McDermott said to Rand.

LOSING MONEY

Rand challenged the Republican report’s findings saying: “We reject the allegation that our public policy positions are influenced by our revenues.”

He said that it was more likely the group would lose money under the law, as AARP-branded insurance plans for people between 50 and 64 become obsolete when insurance companies in 2014 can no longer exclude people from coverage because of medical history.

The healthcare law also beefs up the Medicare drug benefit for the elderly and limits how much more insurers can charge older people for coverage compared to younger people.

UnitedHealth Group Inc. (UNH.N) offers supplemental health plans, called medigap plans, using the AARP brand. The plans fill in the coverage gaps left by traditional Medicare. The company also offers a Medicare Advantage plan, which offer more comprehensive coverage, through AARP. Aetna (AET.N) offers AARP-licensed health plans to the 50-64 age group.

The Republican report said that Aetna plans represent a small portion of the $657 million in insurance royalties received by AARP in 2009. Sixty-five percent of AARP royalties come from medigap products that stand to gain from the healthcare law, the report said.

Reichert said that the report pointed to “a direct conflict of interest between AARP’s advocacy for eliminating the Medicare Advantage program … and the massive profits AARP receives from sponsoring medigap plans.”

Rand said the money was used to support AARP’s social welfare programs, which include helping older Americans find jobs, providing information on financial security and aiding the hungry.

It is not the first time AARP’s nonprofit tax status and its insurance affiliations have been questioned. In 1995 then Republican Senator Alan Simpson, who served as co-chairman of Obama’s deficit commission last year, probed the organization’s business practices.

The group came under fire from Democrats in 2003 for its support of the Republican-backed Medicare prescription drug plan. (Reporting by Donna Smith; Editing by Xavier Briand)

Tags: AARP in trouble, AARP insurance revenues, AARP medicare supplement kickbacks

Federal agencies are rushing young adult dependent coverage interim final rules into effect without going through the usual comment period.

The Employee Benefits Security Administration, an arm of the U.S. Department of Labor, has posted a preliminary version of the interim final rules on its website.

The Internal Revenue Service, an arm of the U.S. Treasury Department, and the Office of Consumer Information and Insurance Oversight at the U.S. Department of Health and Human Services also worked on the rules.

The agencies are set to publish the final version of the interim rules in the Federal Register Thursday.

The rules implement a provision in the new federal Affordable Care Act — the legislative package that includes the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act — that requires insurers to let insured parents keep children on the parents’ health coverage until the children are 26.

The ACA young adult coverage provision is set to take effect Sept. 23, but most major carriers say they will implement the provision earlier.

Federal agencies normally provide time for members of the public to comment before implementing major regulations. The agencies are implementing the young adult coverage interim rules before the comments come in because the secretary of Labor, HHS and the Treasury “have determined that it would be impracticable and contrary to the public interest to delay putting the provisions in these interim final regulations in place,” officials write in a preamble to the interim rules. “Having a binding rule in effect is critical to ensuring that individuals entitled to the new protections being implemented have these protections uniformly applied.”

Officials are estimating that, in 2011, the program will lead to about 1.2 million young adults having new health coverage, and that about 650,000 of those young adults will be people who were previously uninsured.

The number of uninsured young adults who gain coverage through the program in 2011 could range from 200,000 to about 1.6 million, officials estimate.

Although officials use the term “dependent” in connection with the regulation, group health plans can no longer use factors such as whether a child of an insured is a tax dependent in deciding whether to issue coverage to that child, officials write.

“Examples of factors that cannot be used for defining dependent for purposes of eligibility (or continued eligibility) include financial dependency on the participant or primary subscriber (or any other person), residency with the participant or primary subscriber (or any other person), student status, employment, eligibility for other coverage, or any combination of these,” officials write.

Implementing the young adult coverage program will require that the children who were denied coverage, or whose coverage ended, receive alerts about the new enrollment opportunity, officials write.

Federal agencies want to hear ideas about ways to minimize the burden on the notice senders and on the individuals who must fill out the notices, officials write.

Tags: Dependent Care Regulations, Dependent Health Insurance to Age 26 Update, Health Insurance Dependent Care Law Regulation, Insurance Age 26 Law

nsurance and employer groups are talking about the lack of cost control provisions in H.R. 3590, the Patient Protection and Affordable Care Act bill, which passed by a 219-212 vote at 10:48 p.m. Sunday in the House.

H.R. 3590 is the same bill that the Senate passed early on Christmas Eve a few months back, and it now is awaiting the signature of President Obama.

House members also voted 220-211 at 11:36 p.m. to pass H.R. 4872, the Reconciliation Act of 2010. The Senate still must approve that bill, but it would revise and extend many provisions of H.R. 3590. Senate leaders have told House leaders that they have the votes to pass H.R. 4872 using a special budget reconciliation process.

Under normal Senate rules, bills need 60 votes to pass. Budget reconciliation measures need just 51 votes.

Some Republican lawmakers said during floor debate that they or colleagues would try to block implementation of H.R. 3590 — and of H.R. 4872, if H.R. 4872 becomes law — by turning to the courts for relief.

H.R. 3590 and H.R. 4872 passed with no Republican support; 34 Democrats voted against H.R. 3590, and 33 voted against H.R. 4872.

Democrats were jubilant about winning the H.R. 3590 battle and getting H.R. 4872 to the Senate.

“This is what change looks like,” Obama said during an appearance shortly after the vote on H.R. 3590 took place.

“I know this wasn’t an easy vote for a lot of people,” Obama said. “But it was the right vote.”

House Majority Leader Steny Hoyer, D-Md., smiled at the reporters at a press conference on Capitol Hill. “For all of you who pursued all of us: We had the votes,” Hoyer said.

Insurance say they still have concerns the current versions of the bills.

“The access expansions are a significant step forward” Karen Ignagni, president of America’s Health Insurance Plans, Washington, says in a statement about the health bills. “But this legislation will exacerbate the health care costs crisis facing many working families and small businesses.”

The bill “does little to stem the skyrocketing cost of health care and will be financed on the backs of small business during one of the most delicate financial periods in American history,” says Robert Rusbuldt, president of the Independent Insurance Agents and Brokers of America, Alexandria, Va..

WHAT’S IN H.R. 3590?

H.R. 3590 — the PPACA bill that the Senate passed late on Christmas Eve — is on track to become law whether or not the Senate approves H.R. 4872.

The final version of H.R. 3590 would:

- Enact the Community Living Assistance Services and Supports Act long long term care benefits program.

- Require insurers selling in the individual market, in the small group market and through the exchange system to sell coverage on a guaranteed issue and guaranteed renewable basis. Plans could base rating variations only on age, family use, tobacco use and location, and the rates for the oldest insureds could be only 3 times higher than the rates for the youngest insureds. Rates for tobacco users could be only 50% higher than the rates for non-tobacco users.

- Create a new health insurance exchange system that individuals and employers with up to 100 employees could use to buy subsidized health coverage, and 4 “tiers” of coverage, ranging from catastrophic plans to platinum plans.

- Create a new system of nonprofit health insurance co-ops.

- Permit states to form multi-state health insurance compacts, to create multi-state markets for health insurance.

- Create a health insurance tax credit for employers with 25 or fewer employees and average annual wages of less than $50,000.

- Impose penalties on employers with more than 50 employees that fail to provide health coverage and on inidividuals with incomes over a minimum income threshold who fail to have health coverage.

- Require employers with more than 200 employees to enroll employees in health plans automatically.

- Impose a $750 per-employee penalty on employers with more than 50 employees that fail to provide health coverage.

- Impose minimum medical loss ratios that are similar to those in H.R. 3590: 85% for group plans with more than 100 participants; 80% for small group plans; and 85% for Medicare Advantage plans.

- Impose a 40% “Cadillac plan” excise tax on insurers that sell relatively expensive health plans. Insurers now would pay the tax when they sold plans that cost more than $8,500 for individuals and $23,000 for families.

- Tighten health savings account and flexible savings account reimbursement rules. Individuals could not use account funds to pay for over-the-counter medications unless the medications were prescribed by doctors.

- Cap annual FSA contributions at $2,500, but increase the limit annually by a cost of living adjustment, starting Jan. 1, 2011.

- Apply the existing Medicare payroll tax to investment income starting in 2013, and increase the tax by 0.9 percentage points, to 2.35%, for wages over $200,000 per year for individuals and over $250,000 per year for couples.

- Adopt a national standard for eligibility verification and claims status by Jan. 1, 2013; a standard for electronic fund transfers by Jan. 1, 2014); and a variety of other standards by Jan. 1, 2016.

- Give states 5-year grants to develop medical malpractice reform programs.

WHAT’S IN H.R. 4872?

Originally, the Reconciliation Act was going to include health insurance rate regulation provisions. The version passed Sunday by the House excludes that version, because the Senate parliamentarian ruled that H.R. 4872 backers could not handle the provision using the budget reconciliation process.

H.R. 4872 echoes the language of H.R. 3590 in many places and changes it in others.

Provisions that are still in H.R. 4872 would:

- Create a $1 billion Health Insurance Reform Implementation Fund.

- Exempt the first 30 employees of any employer from the no-coverage penalty.

- Increase the per-employee penalty imposed on employers that fail to provide health coverage to $2,000 per employee, from $750.

- Require individuals making more than $200,000 per year and couples making more than $250,000 per to pay a new 3.8% tax on interest, dividends, capital gains and other investment income. (This new tax is higher than the 2.9% tax on investment income recently proposed by President Obama.)

- Increase the Cadillac plan tax limits to $10,200 for individuals and $27,500 for families, and to $11,850 and $30,950 for for retirees and high-risk professionals. Calculations of health benefits value now will exclude dental plans and stand-alone vision plans.- Push the effective date of the $2,500 cap on annual FSA contributions back to Jan. 1, 2013.

- Increase the no-coverage penalty for individuals with relatively high incomes and decrease the penalty for low-income individuals.

Tags: Health Care Bill H.R. 3590, Health Care Legislation, House Health Care Bill, House of Representives Passes Health Care Bill

President Obama Tuesday night signed into law legislation that provides a stopgap, 31-day extension of federal subsidies of COBRA health care premiums.

The measure was approved earlier Tuesday by the Senate on a 78-19 vote, while the House cleared it last week.

Under H.R. 4691, the 65%, 15-month premium subsidy for laid-off workers is extended to those involuntarily terminated from March 1 through March 31.

Without the extension, employees laid off after Feb. 28 would have been ineligible for the subsidy.

The measure also will allow employees to receive the subsidy if they first lost group coverage due to a reduction in hours and then were terminated after enactment of the legislation, if certain conditions are met.

Meanwhile, the Senate Wednesday will continue consideration of legislation, H.R. 4213, that would extend the premium subsidy to employees laid off through Dec. 31, 2010.

Tags: 2010 COBRA Benefits, 2010 COBRA Benefits Extension, 2010 COBRA Subsidy Deadline, 65% COBRA Subsidy Extension, COBRA Extentension, COBRA Health Care Premium Subsidy Deadline, COBRA Subsidy Extension

President Obama has signed a bill that extends federal COBRA health insurance premium subsidies for the unemployed.

The Senate, in a rare Saturday session, passed H.R. 3326 on an 88-10 vote. The measure—a military spending bill that the House passed earlier last week—includes a provision that extends the nine-month, 65% premium federal subsidy by six months. The change applies to those who are involuntarily terminated through Feb. 28, 2010.

Previously, employees who lose their jobs after Dec. 31 would have been ineligible for the subsidy.

The legislation also provides another six months of subsidized coverage for beneficiaries whose nine-month COBRA premium subsidy has run out.

In addition, the legislation gives beneficiaries whose subsidy expired and who didn’t pay the full premium the opportunity to receive retroactive coverage. For example, a beneficiary whose nine months of subsidized coverage ran out Nov. 30 and who didn’t pay the unsubsidized premium for December could pay his or her 35% share in January and receive COBRA coverage for December.

The legislation also requires employers to notify current and future COBRA beneficiaries of the new 15-month premium subsidy.

The fate of the legislation has been followed closely by terminated workers—eager to know whether the subsidy will be extended—as well as employers who need to tell beneficiaries the COBRA premium they should pay.

The legislation makes clear that employers can offset future COBRA premiums or issue refund checks for beneficiaries who overpaid their COBRA premium. That could happen if a beneficiary whose subsidy ran out in November paid the full premium rather than the 35% share in December.

Tags: COBRA Legislation Extension, COBRA stimulus, COBRA stimulus package, COBRA subsidy, COBRA Subsidy Expansion, COBRA Subsidy Extended, COBRA Subsidy Extension, Obama COBRA Subsidy

As we head into July, the federal debate has become more defined as four of the five Congressional committees with jurisdiction over health reform have released draft health reform bills. On June 19th , the Education and Labor, Energy and Commerce, and Ways and Means Committees in the House of Representatives released a joint tri-committee draft health reform bill. Earlier in June, the Senate Health, Education, Labor, and Pensions (HELP) Committee released its health reform bill. The final committee with jurisdiction over health reform, the Senate Finance Committee, is expected to release its health reform bill soon after the 4th of July Congressional recess. House and Senate leadership hope to pass legislation in their respective chambers before August and get a final compromise bill to the President in October. Key components of the recently released House tri-committee bill include:

National Health Insurance Exchange: By 2013, a National Health Insurance Exchange is to be established to replace the current individual health insurance market and provide an option for employers and public program enrollees in Medicaid and the Children’s Health Insurance Program (CHIP). States would be allowed to apply to the federal government to establish state or regional exchanges. The Exchange is to establish health plan standards, facilitate the provision of comparative information, enrollment, billing, and other administrative functions, administer coverage subsidies, and respond to consumer grievances.

Public Plan: No later than 2013, the Department of Health and Human Services is to develop and offer a Public Plan through the Exchange to compete with private insurers. The Public Plan is to comply with the same requirements as other private health plans participating in the Exchange, but provider payments from the Public Plan are to be similar to Medicare rates and providers participating in Medicare would be required to participate in the Public Plan for five years. The federal government would provide start up funding for the Public Plan, but it must become self-sustaining after initial start up.

Insurance Market Reform: The legislation requires changes to the individual and group markets that prohibit pre-existing condition exclusions, prohibit premium rating based on health status, gender, or occupation and limit rating by age, require guarantee issue and renewal of coverage, require a medical loss ratio of 85 percent, prohibit annual or lifetime benefit limits and limit annual cost sharing, establish a Benefits Advisory Committee to recommend a minimum benefit package and three additional standard benefit plans, and establish a risk spreading mechanism to minimize unequal risk selection in health plans.

Coverage Mandates: By 2013, all individuals would be required to have health insurance coverage. Those not complying with the mandate are to be assessed a tax up to the cost of the minimum benefit plan. Exceptions to the mandate are granted for religious objection and financial hardship. Employers would be required to provide 72.5 percent for single coverage and 65 percent for family coverage of the lowest cost minimum benefit set plan or pay an eight percent tax on wages. Certain small businesses with payroll below a set level would be exempt.

Coverage Subsidies: Sliding scale subsidies varying by income would be available through the Exchange for individuals and families with incomes below 400 percent of the federal poverty level ($88,000 for a family of four) so that premiums would not exceed 10 percent of income. Sliding scale subsidies varying by employee income and employer size worth up to 50 percent of premium would be available to employers with less than 25 employees whose average wage is below $40,000.

Medicaid Reform: The legislation expands Medicaid eligibility for all individuals to 133 percent of the federal poverty level ($14,000 for an individual) and requires an 85 percent medical loss ratio for Medicaid managed care organizations. It also establishes new preventive services benefits, increases payments for primary care, and implements a medical home pilot project to reduce costs and improve outcomes through use of preventive services and care coordination.

Medicare Reform: The legislation restructures provider payment rates and requires the Department of Health and Human Services to develop new payment methods to promote coordinated care and reward quality and efficiency in areas such as hospital readmissions, post-acute care, imaging, and primary care. The bill reduces payment rates and establishes an 85 percent medical loss ratio for Medicare Advantage plans. The legislation also eliminates the coverage gap (donut hole) in Part D by 2023 and reauthorizes Special Needs Plans (SNPs) that integrate care for beneficiaries with coverage through Medicaid and Medicare.

Other Health System Reforms: The legislation also makes investments in the health care workforce to improve access to primary care, makes investments in prevention and public health programs, establishes national centers for quality improvement and comparative effectiveness research, establishes mechanisms to simplify administrative functions, and enhances efforts to reduce fraud, waste, and abuse.

Tags: House Health Committee bill, House Health Subcomittee, House insurance bill, House of representative insurance proposal

The House and Senate have approved a compromise budget resolution that sets parameters for spending and revenue legislation. As requested by the President, the budget resolution includes a reserve fund for health care reform initiatives that must be deficit-neutral for fiscal years 2009 through 2014 or fiscal years 2009 through 2019. The resolution allows Medicare physician payment legislation, that would likely prevent cuts to physician payment rates for two years, to be exempt from the deficit-neutral requirement.

The budget resolution also allows for the ability to consider health care reform legislation under the reconciliation process. Reconciliation is a procedure that Congress may use to make it easier to pass budget bills related to tax and entitlement spending programs. A reconciliation bill can not be filibustered as debate is limited to 20 hours, and this allows a bill to be passed quickly with a simple majority vote.

Tags: Health care reform, health care reform agreement