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Health Insurance Reform Update

Since Congress returned from its August recess, a major piece missing from the healthcare reform picture has been put into place, the Senate Finance Committee bill.

The Senate Finance Committee, chaired by Senator Max Baucus of Montana, made public its legislative proposal,  “America’s Healthy Future Act of 2009,” a few weeks ago.  At the time of this writing, some key provisions of the bill are:

  • Prohibits pre-existing condition exclusions, lifetime caps, and rescissions in all individual and small group policies (phased in over five years for small groups).  Note: for more information on lifetime caps, click here.
  • Creates state-based exchanges for purchasing insurance in the individual or small group markets. 
    • Requires four standardized policies to be offered through the exchanges (ranging from “bronze” to “platinum”), along with a “young invincible” plan, which provides catastrophic coverage for those 25 years old and younger. 
      • Requires all insurers in the individual and small group market to at least offer gold and silver policies, and to offer only policies that comply with the exchange policy standards, whether sold in or outside of the exchanges.
      • Requires standardized enrollment and marketing procedures for plans sold through the exchanges.
  • Creates a temporary high-risk pool with subsidized premiums for individuals with pre-existing conditions who have been uninsured for at least six months, until the exchanges are established.
  • Requires that all U.S. citizens have health insurance (individual mandate) with tax penalties, based on income, for those who don’t comply.
  • Phases in refundable and advanceable premium credits for individuals and families with incomes between 100% and 400% of the federal poverty level (FPL), beginning in 2013. (The 2009 poverty level is $22,050 for a family of four.)
  • Provides cost sharing subsidies to individuals and families with income between 100% and 200% of the FPL.
  • Phases in expansion of Medicaid eligibility to those with incomes up to 133% of the FPL, beginning in 2014.
  • Assesses fees for employers with more than 50 employees that don’t offer coverage;  requires employers with 200 or more employees to automatically cover all employees.
  • Provides premium subsidies to small employers with fewer than 25 employees and creates a national small employer reinsurance pool to cover 80% of claims between $15,000 and $90,000, indexed to medical inflation. 

As of this writing, the Senate Finance Committee is currently meeting to mark up the bill and consider the more than 500 amendments that were filed.  On September 29, the Committee voted to not include the controversial public option plan (government plan to be sold through the exchanges alongside the private insurer plans), but versions of the public option were included in the four other healthcare reform bills.

Once the bill is passed by the Finance Committee, it will be reconciled with S. 1679, the Affordable Health Choices Act, which was passed by the Senate Health, Education, Labor and Pensions (HELP) Committee in July.  One bill will be brought for a vote on the Senate floor this fall.  The Senate leadership has given a target date of mid-October for floor consideration, but that is likely to be delayed. President Obama has requested a bill on his desk by the end of the year, so the next few months will continue to be very active on the health reform front. 



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