U.S. Senate Finance Committee Presents Health Care Bill

September 16, 2009 (PLANSPONSOR.com) - Senate Finance Committee Chairman Max Baucus (D-Montana) on Wednesday presented a health care reform plan that would require Americans to purchase coverage, would require employers that do not provide coverage to employees to reimburse the government for tax credits, and does not include a government-run insurance option.

Provisions of the America’s Healthy Future Act would:

  • Create health care affordability tax credits to help low and middle income families purchase insurance in the private market;
  • Provide tax credits for small businesses to help them offer insurance to their employees;
  • Allow people who like the coverage they have to keep it;
  • Reform the insurance market to end discrimination based on pre-existing conditions and health status;
  • Eliminate yearly and lifetime limits on the amount of coverage plans provide;
  • Create Web-based insurance exchanges that would standardize health plan premiums and coverage information to make purchasing insurance easier;
  • Give consumers the choice of non-profit, consumer owned and oriented plans (co-op); and
  • Standardize Medicaid coverage for everyone under 133% of the federal poverty level.

Other provisions aim to improve the quality of care, increase efficiency within the health care system, and lower health care costs, as well as promote preventive health care and wellness.

A press release said the plan would cost $856 billion over ten years, which would be fully paid for mostly through increased focus on quality, efficiency, prevention, and adjustments in federal health program payments, without adding to the federal deficit.

The health care reform plan would create a personal responsibility requirement for health care coverage, with exceptions provided for a variety of reasons including religious conscience (as defined in Medicare) and an exemption for undocumented workers. Individuals who fail to obtain coverage, with some exceptions, would be subject to a penalty based on income.

The America's Healthy Future Act would not require employers to offer health insurance; however, effective January 1, 2013, all employers with more than 50 employees who do not offer coverage would have to reimburse the government for each full-time employee (defined as those working 30 or more hours a week) receiving a health care affordability tax credit in the exchange. The reimbursement would equal 100% of the average exchange subsidy up to a cap of $400 per total number of employees whether they are receiving a tax credit or not.

Under the proposal, an advanceable, refundable tax credit would be provided for low and middle-income individuals to subsidize the purchase of health insurance. The credits would be based on the percentage of income the cost of premiums represents, rising from 3% of income for those at 100% of the federal poverty level to 13% of income for those at 300% of the FPL.

The proposal would provide a tax credit to small businesses that offer health insurance to their employees. In 2011 and 2012, eligible employers can receive a small business credit for up to 35% of their contribution. Once the exchanges are up and running in 2013, qualified small employers purchasing insurance through the exchanges can receive a tax credit for two years that covers up to 50% of the employer's contribution.

The act would create state-based Web portals, or "exchanges" that would direct consumers purchasing plans on the individual market to every health coverage option available in their zip code. The exchanges would offer standardized health insurance enrollment applications, a standard format companies would use to present their insurance plans, standardized marketing materials, and a call center for customer support. The exchanges would also enable users to determine whether they are eligible for health care affordability tax credits or public programs and would enable consumers without access to the Internet to enroll through the mail or in person in a variety of locations.

Small businesses would have access to state-based Small Business Health Options Program (SHOP) exchanges. These exchanges - like the individual market exchanges would be Web portals that make comparing and purchasing health care coverage easier.

Other provisions of the America's Healthy Future Act would:

  • Shift incentives in Medicare to reward better care, not just more care;
  • Aggressively fight fraud, waste, and abuse in Medicare;
  • Provide free annual "wellness visits" for Medicare participants and their doctors to focus on prevention;
  • Eliminate out ? of ? pocket costs for screening and prevention services in Medicare;
  • Create incentives in Medicare and Medicaid for completing healthy lifestyle programs;
  • Increase federal Medicaid funding for states that cover recommended preventive services and immunizations for enrollees at no extra cost;
  • Increase the number of primary care doctors in the system;
  • Encourage all of a patient's doctors to coordinate care and reduce duplication and waste;
  • Create incentives for health care providers to improve quality by using safer, more cost effective health technology like electronic medical records; and
  • Increase health care research so doctors know what care works best for which patients.

A complete summary of the Act, including a link to the full text of the proposal, is here .