What is Happening with Proposed Reforms?

Patient Protection and Affordable Care Act H.R. 3590, (updated 03/22/10)

On December 24, 2009, the Senate passed the Patient Protection and Affordable Care Act, H.R. 3590.

H.R. 3590 was originally a House bill that extended the first-time home buyer credit for military personnel and veterans. The Senate took that bill and rewrote the healthcare reform proposal on top of it, calling it the Substitute Amendment of H.R. 3590. To read the final bill, please visit http://thomas.loc.gov/cgi-bin/bdquery/z?d111:H.R.3590:.

H.R. 3590 is divided into 9 Titles. This document includes a summary of Titles I and II, which are the two that cover health insurance changes. To read a summary of the remaining Titles, click the above bill reference.

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.

Title I: Quality Affordable Health Care for All Americans
Title II: Role of Public Programs

Title I- Quality Affordable Healthcare for all Americans

A. Regulates how insurance companies can structure their premiums in the group and individual markets.

• Prohibits lifetime or annual limits.
• Prohibits insurance companies from cancelling coverage.
• Requires that prevention services not have a co-pay.
• Requires insurance companies to report on their programs to improve health outcomes, such as care coordination and chronic disease management.
• Requires insurance companies to report the total premium revenue that is spent on clinical services and quality.
• Establishes a consumer assistance program in each state.
• Reviews premium increases annually and allows states to exclude insurance providers whose increases are unjustified from the state exchange.

B. Establishes new programs to immediately assist consumers.

• Creates a temporary insurance program for individuals with a pre-existing condition who are currently uninsured and early retirees ages 55-64. These programs expire when the state exchanges are operational.
• Develops an internet site for consumers to compare insurance options.
• Accelerates the adoption of electronic transactions between health providers and insurance companies.

C. Requires the following health insurance market reforms:

• Limits premium variation, allowing only family size, location, benefit package, age and tobacco use to be considered.
• Guarantees insurance coverage and renewal.
• Prohibits insurance plans from discriminating against a pre-existing condition or poor health status.
• Requires all plans in the small and individual market to include an essential benefit package.
• Permits individuals to maintain current coverage.

D. Expands coverage options

• Requires that qualified health plans be certified by the state exchange and offer the minimum benefits package.
• Establishes requirements for the essential benefits package; this package must be equal in scope to a typical employer plan.
• Prohibits out-of-pocket costs to be higher than Health Savings Account limits.
• Establishes four levels of coverage in the individual and small group markets: Bronze, Silver, Gold and Platinum.
• Allows catastrophic plans for individuals under 30 or unable to afford coverage; the plan must cover the essential benefits package and three primary care visits.
• Establishes abortion coverage guidelines:
  • Cannot be mandated as part of the essential benefits package.
  • Cannot be offered in the public plan, unless it can be shown that according to three different accounting standards that no federal funds will be used.
  • Permits states to require coverage as an additional benefit, but bare all costs and ensure federal funds are not used.
  • Requires a state exchange to offer one plan with abortion coverage and one without.
  • Prohibits tax credits or subsidies to be used to pay for abortions.
  • Permits private insurers to provide abortion coverage provided they can separate out federal funds so they do not pay for abortions.

E. Establishes state insurance exchanges, called "American Health Benefit Exchanges"

• Establishes certification criteria for qualified health plans with a rating system.
• Creates an annual open enrollment period.
• Allows states to require additional benefits, at the state's expense.
• Establishes several consumer assistance requirements, such as a toll-free hotline and website.
• Requires exchanges to must be self-sustaining by 2015.

F. Provides start-up loans to establish member-run nonprofit insurance plans that can offer qualified health plans. These loans may not be awarded to existing insurance plans or governmental agencies.

G. Requires a Community Health Insurance Options (nonprofit insurance options), with an opt-out for states.

• Covers essential health benefits; states may add more.
• Sets geographically adjusted premium rates which are expected to cover costs.
• Negotiates provider payment rates which cannot be higher than private qualified plans.
• Provides a start-up fund that must be paid back with interest within 10 years
• Permits the Secretary to contract with a nonprofit to administer the program.

H. Allows states to establish basic health plans for individuals who do not qualify for Medicaid and earn less than 200% FPG.

I. Allows states to contract with other states to allow insurance plans to cover more than one state.

J. Requires states to establish a nonprofit reinsurance program to help cover high-risk individuals.

K. Establishes premium tax credits and reduces cost-sharing for individuals.

• Refundable tax credit and lower out of pockets maximums for those earning between 100 and 400% FPG.
• Prohibits any credits for those not lawfully present in the U.S.
• Prohibits credit as being counted as income.

L. Establishes tax credits for small employers with fewer than 25 employers and average annual wages less than $40,000.

M. Requires individuals to have health insurance beginning in 2014.

• Penalties increase each year beginning with a $95 fine in 2014 to a $750 fine in 2016 or 2% of income.
• Hardship exemptions will be available.

N. Requires large employers (more than 200 employees) to automatically enroll full-time employees.

• If the employer's plan does not meet minimum standards, an employee may purchase insurance through an exchange.
• Employers with more than 50 employees not offering insurance with at least one employee receiving a tax credit will pay either a $750 fine per every full-time employee or a $3,000 fine per employee receiving a tax credit.

Title II- Role of Public Programs

A. Expands Medicaid eligibility for all individuals with incomes less than 133% of FPG.

• Federal funds will pay 100% of the coverage for newly eligible individuals through 2016; state's share of the cost will eventually reach 32.3% by 2019.
• Rescinds the Medicaid Improvement Fund funding from 2014-2018.

B. Increases the CHIP match rate by 23% during 2014-2019.

C. Establishes new long-term care options.

• Allows Medicaid to cover community-based attendant services.
• Requires spousal impoverishment protections.
• Expands State Aging and Disability Resource Centers.

D. Modifies payments for prescription drugs offered through Medicaid and expands access to some drugs.

E. Reduces the Disproportionate Share Hospital (DSH) allotments by 50% once a state's uninsurance rate decreases by 45%. The DSH will continue to decline as more individuals have coverage.

F. Improves coordination of care for individuals eligible for Medicaid and Medicare.

G. Establishes quality improvement measures for Medicaid.

• Develops quality measures for adults with Medicaid, similar to the ones developed for children under CHIP.
• Prohibits payment for services treating a condition created by the healthcare provider.
• Provides options for the states to develop medical homes for those with chronic illnesses.
• Studies bundled payments in eight states.
• Studies global payment structures in five states.
• Pilots pediatric Accountable Care Organizations.
• Pilots billing Medicaid for medical services in mental hospitals for emergency psychiatric conditions (currently, mental hospitals do not bill Medicaid).

H. Provides additional funding for the following maternal and child health programs:

• Home visitation programs for moms and infants.
• Education research on postpartum depression.
• Adolescent responsibility and abstinence education.
• Healthcare power of attorney planning for children transitioning out of the foster care system.