What is Happening with Proposed Reforms?

House of Representative's Healthcare Reform Bill, H.R. 3962 Bill, (updated 11/20/09)

H.R. 3962 "The Affordable Health Care for America Act" is the House of Representative's combined healthcare reform bill. The text of the bill can be located at: http://docs.house.gov/rules/health/111_ahcaa.pdf.

This bill was released to the public on October 29, 2009. The bill was approved on Nov. 7, 2009.

The list items in bright red reflects what is different from H.R. 3200.

To view the mental health and substance use disorders coverage in the healthcare reform bills, click here.

To see how healthcare reform will affect you in the greater Cincinnati area, click here.

The topics covered within this bill are:

• Coverage and Choice
• Affordability
• Shared Responsibility
• Controlling Costs and Quality Improvement
• Prevention and Wellness
• Workforce Investments

COVERAGE AND CHOICE

• Establishes health insurance exchanges so that individuals and businesses can comparison-shop for insurance.
• Establishes a public health insurance option that will be subject to the same market reforms as private insurance companies and will be self-sustaining (that is, financed only by premiums).
• Guarantees coverage and implements insurance market reforms so that insurance can no longer refuse coverage based on a person's health status or preexisting condition. The bill also limits the insurance industry’s ability to charge higher rates based on health status, gender, or other factors.
• Establishes essential benefits for everyone. The benefits will include preventive services, mental health services, and dental and vision for children. It also caps the amount an individual or family spends on covered services during a year to reduce medical bankruptcies.
• Establishes loans for states to assist in the development of co-operatives as another option for health coverage. States will also be allowed to contract with other states to allow insurance policies to be available across state lines.
• Ends antitrust exemption for health insurers which should increase competition.
• Establishes a voluntary, public, long-term care insurance program that supports individuals that develop functional limitations. This program is called Community Living Assistance Services and Support (CLASS) and was originally in the Senate HELP Committee healthcare reform bill.
• Creates a $10 billion fund for a temporary reinsurance program to offset costs for employers supporting retirees ages of 55-64.
• Prohibits employers from reducing retiree benefits, unless a reduction in also made to active employees.
• Prohibits the use of federal funds to pay for or cover abortions. Reciepients of federal subsidies and purchasers of the public option have to buy a seperate plan for abortion coverage.

AFFORDABILITY

• Provides sliding-scale, affordability credits for low- and moderate-income individuals and families up to 400% of federal poverty guidelines ($43,000 for an individual and $88,000 for a family of four in 2009).
• Caps annual out-of-pocket spending to reduce medical bankruptcy. The maximum for an individual is $5,000 and $10,000 for a family.
• Expands Medicaid to individuals and families with incomes below 150% of federal poverty guidelines ($29,326.50 for a family of four in 2009). Provider payment rates would be increased to encourage provider participation. The expansion and increased rates would initially be fully funded by the federal government and transition to include a 9% contribution from the states starting in 2015.
• Modifies Medicare to make it more affordable for individuals. The proposed changes would fill the coverage gap, also known as the "donut hole" in the Part D drug program, eliminate cost-sharing for preventive services, and increase payments to providers.

SHARED RESPONSIBLITY

• Requires that individuals have insurance coverage or pay a penalty of 2.5% of the individual’s modified adjusted gross income during the time not covered
• Requires that employers offer insurance coverage to all employees and pay 72.5% of the premium for a full-time individual or 65% of a family plan for a full-time employee
• Requires businesses that do not provide health insurance benefits to contribute 8% of the businesses payroll to an insurance fund
• Small businesses with payrolls less than $500,000 are exempt from the employer mandate. The 8% requirement will be phased in for employers with payrolls between $500,000 and $750,000.
• Small business tax credits are available for businesses with fewer than 10 employees and $20,000 or less in average wages.

CONTROLLING COSTS AND QUALITY IMPROVEMENT

• Changes Medicare payment structure
  • Establishes the Center for Medicare and Medicaid Innovation to purse additional payment and delivery system reforms
  • Adjusts payments for skilled nursing facilities
  • Adjusts payments based on geographic location
  • Adjusts Medicare DSH (Disproportionate Share Hospital) payments to hospitals for caring for high numbers of uninsured, since reducing the number of uninsured will reduce the hospitals uncompensated care costs
  • Adjusts provider payments to match their actual costs
  • Pays an additional 5% to a provider who practices in an “efficient area,” a county whose per capita rate (the amount Medicare spends per patient) is in the lowest fifth percentile in the nation
  • Reduces payments to hospitals for readmissions and provides bundled payments for post acute care services
  • Reduces unnecessary referrals to doctor-owned medical facilities by requiring providers who financially invested in the facility to disclose that relationship to referred patients, allowing the patient to make a personal judgment about the necessity of the referred service.
• Changes to Medicaid
  • Prohibits cost-sharing for prevention services
  • Primary care services must be paid at 100% of Medicare rates. The federal government will cover 100% of the increased rate until 2014, and then 90% thereafter.
  • Covers nurse home visitation services for first-time mothers
  • Reduces Medicaid DSH payments by $10 billion over 3 years
  • Pilots the medical home models for medically fragile children
• Establishes the Healthcare Fraud and Abuse Fund
• Reduces paperwork of providers, patients, and businesses
• Creates a Compartive Effectiveness Research (CER) Center to conduct, support, and synthesize CER

PREVENTION AND WELLNESS

• Expands the number of community health centers
• Prohibits co-pays or cost sharing for preventive services, such as annual checkups, physicals, etc.
• Creates community prevention programs
• Increases funding of public health departments
• Establishes new data collection efforts to identify and address racial, ethnic, regional, and other health disparities
• Creates a grant program to help small and mid-size employers implement or strengthen workplace wellness programs
• Establishes a grant program to support school-based health centers

WORKFORCE INVESTMENTS

• Increases National Health Service Corps
• Increases training of primary care doctors, including scholarships and loans for doctors to practice in physician shortage areas

Paying for Healthcare Reform

Cost Savings

• Efficiencies in Medicare
  • Eliminating overpayments to private Medicare Advantage plans ($156 billion)
  • Incorporating productivity adjustments into Medicare payment updates for hospitals ($102 billion)
  • Pharmaceutical changes for Medicare recipients ($110 billion)
  • Other Medicare reforms ($100 billion)

Taxes

• A tax of 5.4% on annual adjusted gross income (AGI) over $500,000 for individuals and families with an annual AGI over $1,000,000. The tax will not apply to the first $500,000 or $1,000,000 earned by the individual or family, respectively.
• Eliminates the tax deduction for employers who receive a government subsidy for providing retiree prescription drug coverage
• Implements an excise tax of 2.5% on medical devices