House Bill - Health Insurance Exchange

Hi again -

Today's feature will be the first 215 pages of the House Bill. This is the part of the bill that focuses on the Health Insurance Exchange Program. The rest of the bill - about 800+ pages is about health care reform which we'll touch on later.

As you'll see - the key points of the House Bill pretty much match the key points of Obama's Vision, that we discussed earlier.

OK so here we go: Let's start with the basics.

The Health Insurance Exchange will offer an affordable health insurance option for the people who fall through the cracks in our system - those who don't qualify for any other plan whether it's Medicaid, CHIP, Tri-care, VA, Medicare or an Employers'-offered health plan.

It offers an affordable essential benefit plan package with some consumer protections. It would consist of private insurance companies and a public option. For those of you who don't know what a Public Option is - it's basically an insurance plan ran by a government agency - which would have to meet all the requirements of the private insurance companies so as to guarantee a fair playing field.

This health plan would make the individual, the employers, the insurance companies and the government responsible and accountable for insuring all Americans in one way or another.

If you like your current insurance plan, you can keep it. You can keep your doctor as well.
If at any time your employer decides not to provide insurance for you, or if you lose your job, there will be other options. You can shop for a more affordable plan - and odds are the company you're insured with already will have a package available in the Health Insurance Exchange.
Many companies will be grandfathered in - and they will have 5 years to meet the requirements of the Exchange.

The government will be offering subsidies/credits to individuals - those who can't afford the insurance premiums or the co-payments - those too poor to qualify for Medicaid, but those who still can't afford the premiums. Employers who qualify as small businesses who offer health insurance to their employees will also have some tax credits/subsidies - some as high as 50% of the premiums paid. Also a very nice incentive - if after the year is done and all the figures are in, and the Exchange finds out that we actually saved money during the year - ie) a low medical loss ratio - the money will be returned to the people. This is to insure that our health care dollars are used for health care - not going into some fat cat's pockets.

OK - interjection here: speaking of fat cats - did you know that Blue Cross/Blue Shield of Michigan's Executives -just 2 of them - CEO and CFO - gave themselves $1,286,000 in bonuses in 2008 - that's on top of their over $1 Million Salaries - right before laying off 1000s of workers and instituting salary freezes on lower employees in the beginning of 2009. Crazy huh?

Companies will also get money to help convert their medical records to electronic records. You know where I stand on this - everyday we struggle with those darn computers and it's software - but information technology will save so much money in duplication of services and a reduction in medical errors. It will also help us establish best clinical practice standards. Check out some of my figures on the previous subject - earlier in my blog.

Again the companies participating in the Health Insurance Exchange will have to abide by certain rules. They have to be licensed in the State they want to participate in. States can run their own Exchange if they like. They have to participate in risk pooling so that no one company will be burdened with the sickest or poorest population.

Companies must offer a basic plan and may offer an enhanced plan, a premium plan or a premium plus plan. The basic plan must include Hospitalization, Dr's Visits, Clinic Visits, ER Visits, Dr's Fees, Equipment and Supplies, Maternity and Free Well Baby and Preventative Services.

They can't drop or deny any one's coverage for health reasons - pre-existing conditions, use of insurance, age, race, lifestyle, etc... There won't be any lifetime or annual caps on amounts needed for coverage. There is protection for age, family size and geography ratings - at no time can the premiums be more than a 2:1 ratio. Benefits will not be taxed. And the rules can't interfere with Union contracts.

As of governance, there will be a Health Care Commissioner that will be in charge of running the exchange, enforcing rules and monitoring compliance. There will be an Ombudsman who will be there for the people if they have any questions, grievances, etc...

Everyone will have a medical ID card - that may be scannable - so that when someone shows up at a hospital or doctor's office, we'll know they're covered and what kind of coverage they have - who their doctor is, etc...

In year 1 - which is down the road, I think 2013 - only uninsured individuals and small employers with less than 10 employees can join.

In year 2, everyone above plus employers with less than 20 employees can join. Plus anyone who is paying more than 11% of their yearly income in premiums may join.

In year 3, everyone above plus larger employers as determined may join.

So I don't see that there will be a mass exodus of people leaving their current plans to run to the exchange - at least not in the first 3 years.

Now onto the responsibility part - every one sharing in paying for the system - which I'm all for.

The people, us, will have annual out of pocket expenses - a max. of $5000.00 for individuals and $10,000.00 for families. I, personally still think this is too much. I realize that a lot of families are paying much more than this in deductibles, co-insurances and co-pays. I guess I'm just spoiled by the plan I have. Now, this is not to say that your employer will then downgrade what you have already. If you don't have a yearly deductible now, you won't then. This is just a max. that the Exchange companies can ask for. If someone chooses not to be insured, there will be a tax penalty of 2.5% of their adjusted gross income for the year - or the premium amount they would have paid - whichever is less. Now, there is leeway with this penalty - if it's a hardship, there's a loophole.

Employers in the Exchange must pay at least 72.5% of the employee's premium and 65% of the family premium for full-time employees. It will be pro-rated for part-time employees.
There will be a tax penalty for those employers who don't cover their employees. If the employers have an annual payroll of between $250,000 - $300,000, their penalty will be 2%; if between $300,000 - $350,000, it will be 4%; if between $350,000 - $400,000, it will be 6%; and for any company with an annual payroll over $400,000, the penalty will be 8%. This penalty will help defray the additional costs of the Exchange having to insure the people.

And now the big question - where do we get the money to fund all this?

Well I know there is great discussion on this matter. There are some possibilities floating around out there - I think we'll save a great deal in reform - just in electronic records, there may be some redistribution of Medicare Advantage money, the drug companies may be offering to help with the donut hole money, the richest Americans may not get their big tax deductions - and the richest 1% people in America will have an increase in their taxes. According to the House Bill, the richest people in America will be taxed as follows: Now - keep in mind these percentages apply only to the money they make over this limit in Adjusted Gross Income. So, anyone making between $350,000 - $500,000 annually will be taxed an additional 1%; anyone between $500,000 - $1 Million will be 1.5% and anyone over $1 Million will be taxed 5.4%. So if someone makes more than $1 Million in Adjusted Gross Income in any given year, the amount over $1 Million would be taxed by 5.4%. Their first Million would not be taxed further. FYI - according to compiled figures, this tax would only affect 1.9% of Californians. And for my home state of PA, this would only affect 1% of the population. Oh and by the way, this percentage is just part of tax cuts that the Bush administration has given to the richest Americans since 2001 - and it extends until 2010. This richest 1% will receive over $700 Billion dollars in tax cuts before it's over - so I think they can afford to give some of it back. Do you know many of these people?? I sure don't.

OK so lots to process in only 215 pages. Again though, I don't see a lot of bad stuff - maybe the annual limits of $5000 and $10,000. All I know, as a health care professional, is that everyone has to be covered. I don't care exactly how we get there - but we need to. Not only do all Americans need coverage, they deserve it. Our companies and our nation can not continue to compete in the global market without taking the health care equation into account.

Any ideas? You know if anyone out there has any ideas - whether better or worse or how to get there - on paper or money-wise, speak up. Let's do it together.

Take Care - more later. I'm reading Max Baucus's Call to Action plan today. I must say I'm liking what I'm reading so far.