Tuesday, November 10, 2009
Tweet[IWS] CRS: PRIVATE HEALTH INSURANCE PROVISION OF H.R. 3962 [30 October 2009]
IWS Documented News Service
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Private Health Insurance Provisions of H.R. 3962
Hinda Chaikind, Specialist in Health Care Financing
Bernadette Fernandez, Analyst in Health Care Financing
Chris L. Peterson, Specialist in Health Care Financing
Paulette C. Morgan, Specialist in Health Care Financing
Mark Newsom, Analyst in Health Care Financing and Insurance
Janemarie Mulvey, Specialist in Aging Policy
October 30, 2009
http://assets.opencrs.com/rpts/R40885_20091030.pdf
[full-text, 33 pages]
Summary
This report summarizes key provisions affecting private health insurance, including provisions to
raise revenues, in Division A of H.R. 3962, the Affordable Health Care for America Act, as
introduced in the House of Representatives on October 29, 2009. H.R. 3962 is based on H.R.
3200, America's Affordable Health Choices Act of 2009, which was originally introduced on July
14, 2009, and was reported separately on October 14, 2009, by three House Committees—
Education and Labor, Energy and Commerce, and Ways and Means.
Division A of H.R. 3962 focuses on reducing the number of uninsured, restructuring the private
health insurance market, setting minimum standards for health benefits, and providing financial
assistance to certain individuals and, in some cases, small employers. In general, H.R. 3962
would require individuals to maintain health insurance and employers to either provide insurance
or pay a payroll assessment, with some exceptions. Several insurance market reforms would be
made, such as modified community rating and guaranteed issue and renewal. Both the individual
and employer mandates would be linked to acceptable health insurance coverage, which would
meet required minimum standards and incorporate the market reforms included in the bill.
Acceptable coverage would include (1) coverage under a qualified health benefits plan (QHBP),
which could be offered either through the newly created Health Insurance Exchange (the
Exchange) or outside the Exchange through new employer plans; (2) grandfathered employment
based plans; (3) grandfathered nongroup plans; and (4) other coverage, such as Medicare and
Medicaid. The Exchange would offer private plans alongside a public option. Based on income,
certain individuals could qualify for subsidies toward their premium costs and cost-sharing
(deductibles and copayments); these subsidies would be available only through the Exchange. In
the individual market (the nongroup market), a plan could be grandfathered indefinitely, but only
if no changes were made to the terms and conditions of that plan, including benefits and costsharing,
and premiums were only increased as allowed by statute. Most of these provisions would
be effective beginning in 2013.
The Exchange would not be an insurer; it would provide eligible individuals and small businesses
with access to insurers' plans in a comparable way. The Exchange would consist of a selection of
private plans as well as a public option. Individuals wanting to purchase the public option or a
private health insurance not through an employer or a grandfathered nongroup plan could only
obtain such coverage through the Exchange. They would only be eligible to enroll in an Exchange
plan if they were not enrolled in Medicare, Medicaid, and acceptable employer coverage as a fulltime
employee. The public option would be established by the Secretary of Health and Human
Services (HHS), would offer three different cost-sharing options, and would vary premiums
geographically. The Secretary would negotiate payment rates for medical providers, and items
and services. The bill would also require that the Health Choices Commissioner to establish a
Consumer Operated and Oriented Plan (CO-OP) program under which the Commissioner would
make grants and loans for the establishment of not-for-profit, member-run health insurance
cooperatives. These co-operatives would provide insurance through the Exchange.
Only within the Exchange, credits would be available to limit the amount of money certain
individuals would pay for premiums and for cost-sharing (deductibles and copayments).
(Although Medicaid is beyond the scope of this report, H.R. 3962 would extend Medicaid
coverage for most individuals under 150% of poverty; individuals would be ineligible for
Exchange coverage if they were eligible for Medicaid.)
Contents
Status of House Legislation.........................................................................................................1
Overview of H.R. 3962 ...............................................................................................................1
Overview of Report.....................................................................................................................2
Background ...............................................................................................................................4
Reforms Prior to Full Implementation on January 1, 2013 ...........................................................7
Individual and Employer Mandates .............................................................................................8
Individual Mandate ...............................................................................................................8
Employer Mandate: Health Coverage Participation Requirements .........................................9
Small Business Credit ................................................................................................... 11
Private Health Insurance Market Reforms ................................................................................. 11
Qualified Health Benefits Plans (QHBPs) ........................................................................... 11
Health Care Choice Compacts.............................................................................................12
Essential Benefits Package..................................................................................................13
Health Benefits Advisory Committee ............................................................................14
Health Insurance Exchange .......................................................................................................14
Exchange Structure .............................................................................................................14
Individual and Employer Eligibility for Exchange Plans ................................................15
Benefit Packages in the Exchange .................................................................................16
Public Health Insurance Option...........................................................................................17
Consumer Operated and Oriented Plan (CO-OP) Program...................................................18
Premium and Cost-Sharing Credits......................................................................................19
Individual Eligibility for Premium Credits and Cost-Sharing Credits .............................19
Calculation of Premium Credit ......................................................................................20
Calculation of Cost-Sharing Credit................................................................................21
Selected Revenue Provisions Relating to Private Health Insurance ............................................21
Eliminate Employer Deduction for Retiree Coverage Eligible for Federal Subsidy ..............22
Modifications to Tax-Advantaged Accounts Used to Pay for Health Care Expenses.............23
Other Provisions .................................................................................................................24
Abortion .......................................................................................................................24
Medical Malpractice .....................................................................................................25
End-of-Life Planning ....................................................................................................25
Tables
Table 1. Annual Contribution Requirements In Lieu of Offering Health Insurance ....................10
Table 2. Determination of Affordable Premium Amount, by Percentage of Income
Relative to Poverty Level .......................................................................................................20
Table 3. Cost-Sharing Credits: Average Percentage of Covered Benefits Paid by Plan, and
Out-of-Pocket Maximum, by Income Tier ..............................................................................21
Table 4. Selected Revenue Provisions of H.R. 3962...................................................................22
Appendixes
Appendix. Timeline of Implementation Dates Under Division A of H.R. 3962 Prior to
Full Implementation on January 1, 2013.................................................................................27
Contacts
Author Contact Information ......................................................................................................29
Acknowledgments ....................................................................................................................29
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
_______________________________
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
________________________________________________________________________
Congressional Research Service (CRS)
Private Health Insurance Provisions of H.R. 3962
Hinda Chaikind, Specialist in Health Care Financing
Bernadette Fernandez, Analyst in Health Care Financing
Chris L. Peterson, Specialist in Health Care Financing
Paulette C. Morgan, Specialist in Health Care Financing
Mark Newsom, Analyst in Health Care Financing and Insurance
Janemarie Mulvey, Specialist in Aging Policy
October 30, 2009
http://assets.opencrs.com/rpts/R40885_20091030.pdf
[full-text, 33 pages]
Summary
This report summarizes key provisions affecting private health insurance, including provisions to
raise revenues, in Division A of H.R. 3962, the Affordable Health Care for America Act, as
introduced in the House of Representatives on October 29, 2009. H.R. 3962 is based on H.R.
3200, America's Affordable Health Choices Act of 2009, which was originally introduced on July
14, 2009, and was reported separately on October 14, 2009, by three House Committees—
Education and Labor, Energy and Commerce, and Ways and Means.
Division A of H.R. 3962 focuses on reducing the number of uninsured, restructuring the private
health insurance market, setting minimum standards for health benefits, and providing financial
assistance to certain individuals and, in some cases, small employers. In general, H.R. 3962
would require individuals to maintain health insurance and employers to either provide insurance
or pay a payroll assessment, with some exceptions. Several insurance market reforms would be
made, such as modified community rating and guaranteed issue and renewal. Both the individual
and employer mandates would be linked to acceptable health insurance coverage, which would
meet required minimum standards and incorporate the market reforms included in the bill.
Acceptable coverage would include (1) coverage under a qualified health benefits plan (QHBP),
which could be offered either through the newly created Health Insurance Exchange (the
Exchange) or outside the Exchange through new employer plans; (2) grandfathered employment
based plans; (3) grandfathered nongroup plans; and (4) other coverage, such as Medicare and
Medicaid. The Exchange would offer private plans alongside a public option. Based on income,
certain individuals could qualify for subsidies toward their premium costs and cost-sharing
(deductibles and copayments); these subsidies would be available only through the Exchange. In
the individual market (the nongroup market), a plan could be grandfathered indefinitely, but only
if no changes were made to the terms and conditions of that plan, including benefits and costsharing,
and premiums were only increased as allowed by statute. Most of these provisions would
be effective beginning in 2013.
The Exchange would not be an insurer; it would provide eligible individuals and small businesses
with access to insurers' plans in a comparable way. The Exchange would consist of a selection of
private plans as well as a public option. Individuals wanting to purchase the public option or a
private health insurance not through an employer or a grandfathered nongroup plan could only
obtain such coverage through the Exchange. They would only be eligible to enroll in an Exchange
plan if they were not enrolled in Medicare, Medicaid, and acceptable employer coverage as a fulltime
employee. The public option would be established by the Secretary of Health and Human
Services (HHS), would offer three different cost-sharing options, and would vary premiums
geographically. The Secretary would negotiate payment rates for medical providers, and items
and services. The bill would also require that the Health Choices Commissioner to establish a
Consumer Operated and Oriented Plan (CO-OP) program under which the Commissioner would
make grants and loans for the establishment of not-for-profit, member-run health insurance
cooperatives. These co-operatives would provide insurance through the Exchange.
Only within the Exchange, credits would be available to limit the amount of money certain
individuals would pay for premiums and for cost-sharing (deductibles and copayments).
(Although Medicaid is beyond the scope of this report, H.R. 3962 would extend Medicaid
coverage for most individuals under 150% of poverty; individuals would be ineligible for
Exchange coverage if they were eligible for Medicaid.)
Contents
Status of House Legislation.........................................................................................................1
Overview of H.R. 3962 ...............................................................................................................1
Overview of Report.....................................................................................................................2
Background ...............................................................................................................................4
Reforms Prior to Full Implementation on January 1, 2013 ...........................................................7
Individual and Employer Mandates .............................................................................................8
Individual Mandate ...............................................................................................................8
Employer Mandate: Health Coverage Participation Requirements .........................................9
Small Business Credit ................................................................................................... 11
Private Health Insurance Market Reforms ................................................................................. 11
Qualified Health Benefits Plans (QHBPs) ........................................................................... 11
Health Care Choice Compacts.............................................................................................12
Essential Benefits Package..................................................................................................13
Health Benefits Advisory Committee ............................................................................14
Health Insurance Exchange .......................................................................................................14
Exchange Structure .............................................................................................................14
Individual and Employer Eligibility for Exchange Plans ................................................15
Benefit Packages in the Exchange .................................................................................16
Public Health Insurance Option...........................................................................................17
Consumer Operated and Oriented Plan (CO-OP) Program...................................................18
Premium and Cost-Sharing Credits......................................................................................19
Individual Eligibility for Premium Credits and Cost-Sharing Credits .............................19
Calculation of Premium Credit ......................................................................................20
Calculation of Cost-Sharing Credit................................................................................21
Selected Revenue Provisions Relating to Private Health Insurance ............................................21
Eliminate Employer Deduction for Retiree Coverage Eligible for Federal Subsidy ..............22
Modifications to Tax-Advantaged Accounts Used to Pay for Health Care Expenses.............23
Other Provisions .................................................................................................................24
Abortion .......................................................................................................................24
Medical Malpractice .....................................................................................................25
End-of-Life Planning ....................................................................................................25
Tables
Table 1. Annual Contribution Requirements In Lieu of Offering Health Insurance ....................10
Table 2. Determination of Affordable Premium Amount, by Percentage of Income
Relative to Poverty Level .......................................................................................................20
Table 3. Cost-Sharing Credits: Average Percentage of Covered Benefits Paid by Plan, and
Out-of-Pocket Maximum, by Income Tier ..............................................................................21
Table 4. Selected Revenue Provisions of H.R. 3962...................................................................22
Appendixes
Appendix. Timeline of Implementation Dates Under Division A of H.R. 3962 Prior to
Full Implementation on January 1, 2013.................................................................................27
Contacts
Author Contact Information ......................................................................................................29
Acknowledgments ....................................................................................................................29
______________________________
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.
Stuart Basefsky
Director, IWS News Bureau
Institute for Workplace Studies
Cornell/ILR School
16 E. 34th Street, 4th Floor
New York, NY 10016
Telephone: (607) 255-2703
Fax: (607) 255-9641
E-mail: smb6@cornell.edu
****************************************
# posted by SBasefsky : 9:32 AM
