Comparison of Health Care Reform Bills:

House Tri-Committee, Senate Finance Committee and Senate HELP Committees

In our efforts to track and understand the proposed health care reform legislation currently pending in Congress, the Rocky Mountain Action Coalition (RMAC) has produced this comparison of the three major Democratic bills.  We have used the Side-by-Side Comparison of Major Health Care Reform Proposals produced by the Kaiser Family Foundation as our source.

First, some basics.  All three bills mandate that all individuals have health insurance.  They all set up insurance exchanges, or gateways. All private health insurance that meets the Federal standards would be listed on the Exchange, where buyers can compare the different policies and choose which one they want. All policies have to offer the essential benefits defined by the Federal Government. The insurance has to accept all buyers, regardless of preexisting conditions, guarantee renewal regardless of health status, and the premiums cannot be higher for sicker people.

1.    Individual Mandate: All 3 bills mandate that all individuals have qualifying health care insurance. Enforced through tax penalties tied to income (House, HELP) or excise tax equal to lowest premium (Finance). Exemptions granted for various reasons.

2.    National Health Insurance Exchange: All 3 bills create health insurance exchanges, also called Gateways, for individuals and small employers to purchase insurance. The exchanges are state-based in Senate HELP bill, national or state in House bill, national or regional in Senate Finance bill. Senate HELP and House Bills exclude persons receiving employer based insurance, Medicare and Medicaid from receiving benefits through the exchange. The Senate HELP bill also excludes those on TRICARE.

3.    Employer Requirements:  Pay or Play: House and Senate HELP bills require employers to provide insurance or pay an annual fee for each employee. Employers must pay at least 60% (Senate HELP) or more (House) of employee’s premiums. House and Senate HELP Bills exempt small employers, but definitions differ. Senate Finance bill may or may not include a Pay or Play provision.

4.    Medicaid Expansion: All 3 bills expand Medicaid to higher income levels, to 115% (Senate Finance), 133% (House) or 150% (Senate HELP) of Federal Poverty Level (FPL).

5.    CHIP: All three bills see the Children’s Health Insurance Program being replaced by the new Exchange or Gateway.  Details vary.

6.    Pre-Medicare Retirees: Senate Finance Bill offers Medicare buy-in for ages 55-65 until Exchange is functioning; removes 2-yr. Medicare waiting period for disabled. For employers who keep pre-Medicare retirees on their health plans, House and Senate HELP Bills create a temporary re-insurance program for retirees ages 55-64 until Exchange is set up. Program will reimburse employers for 80% of retiree claims.

7.    Public Plan Option: House and Senate HELP Bills create a public plan subject to the same rules as the private plans. These plans are designed to compete with private insurance plans and would be offered on the Exchange. Public plans must be financed through premiums. The amended House bill and Senate HELP bill have public plan negotiate rates with providers rather than using Medicare rates.

8.    Subsidies to Individuals: House and Senate HELP Bills limit annual premiums to 10%-12.5% of income for individuals with incomes less than 400% FPL. Senate Finance Bill provides refundable tax credits. Credits in all three bills are for purchase of insurance on the Exchange only, except that House bill allows individuals with employer based coverage to receive credits to offset premiums and cost-sharing if premiums exceed 11% or 12% of income. The amount of cost-sharing is limited for incomes up to 400% FPL in the House bill, up to 150% FPL in the Senate HELP bill.

9.    Changes to Private Insurance: All plans must guarantee issue and renewability of insurance and must provide a basic set of benefits. House and Senate HELP bills prohibit pre-existing condition exclusions. Premium variations are limited in all 3 plans. House bill limits plan premiums to a 2:1 ratio for age. House bill requires plans to provide consumers with information allowing them to choose among the plans and participate in open enrollment.

10.    Benefit Design: All three bills require government to define basic benefit package.  House and Senate Finance bills specify four levels of benefits. Optional plans with benefits above the basic benefits are allowed. All 3 bills prohibit annual or lifetime limits on coverage. House plan limits annual cost sharing to $5,000 per individual and $10,000 per family. Senate HELP plan requires dependent coverage to age 26.

11.    Role of States: The Senate HELP bill requires states to set up and administer the Exchanges. The Senate Finance bill requires states to provide oversight protections for health care plans. The House plan requires states to facilitate enrollment in participating insurance plans. The Senate HELP and House plans require states to facilitate enrollment in the expanded Medicaid plans.

12.    Cost Containment: All 3 bills emphasize the use of electronic transactions to reduce cost and improve quality. All also emphasize reducing fraud and waste in public plans. Senate Finance and House Bills require restructuring of Medicare Advantage plans. Senate HELP and House bills call for adoption of standards to simplify health insurance administration.

13.    Improving Quality: All 3 bills have a lot of material on this topic. Senate Finance and House Bills bundle payments for in-patient hospital services and post acute care. All 3 bills require the development of quality measures for the delivery of health care services. Senate Finance and House Bills provide for bonus payments to primary care providers (specifically in Medicare & Medicaid in the House bill).

14.    Prevention/Wellness: All 3 bills emphasize community based wellness activities. Senate Finance and House Bills want to improve prevention by only covering proven preventative services in Medicare and Medicaid.

15.    Long-Term Care: Senate Finance Bill improves the availability of long term care through changes in the Medicaid program requirements. The Senate HELP bill establishes a national voluntary insurance program for long term care (CLASS). The House E&C Committee also adopted the CLASS plan.

16.    Medical Education: All 3 bills reform Graduate Medical Education to increase the supply of primary care providers and nurses.

17.    Medicare Changes: House Bill makes improvements to Medicare with incentive payments for primary care services, eliminates cost sharing for preventative services, requires drug manufacturers to provide a 50% discount on brand-name prescriptions in the doughnut hole and allows Medicare to negotiate discount drug prices with the drug manufacturers. Senate Finance and House bills use Medicare to test new payment systems to increase quality and efficiency.

18.    Financing: The Senate Bills do not address financing. The House bill anticipates financing the program through cuts to Medicare and Medicaid and a surcharge on individuals with incomes above $280,000 and families above $350,000.

In comparing the bills, the House bill appears to be the most complete and well thought out of the three. The Senate Finance and HELP Bills could probably be meshed into one Bill without much effort. However, at this time, the Senate Finance bill has yet to be finalized and could change from the information currently available. RMAC should support the House Bill because it provides the best benefits for pre-retirement persons. If we could get Medicare catastrophic coverage added to the house Bill, it would accomplish most of what retirees need also.

The most troubling aspects of the House bill are proposed cuts to Medicare.  So far, all that’s been written about proposed cuts in Medicare spending do not cut benefits.  There may be cuts to some providers, because of the changes in the way providers are to be paid, but the House bill also resets the pay base, which we think means that overall level of payments would not go down, other things being equal.  But, it becomes discriminatory against seniors if there are two unequal pay schedules to health care providers, with lower pay for Medicare and higher pay for everyone else. 

Rocky Mountain Action Coalition
http://www.rmac-co.org/
August 16, 2009