On October 29, House Democrats unveiled the Affordable Health Care for America Act (H.R. 3962), a 1,990-page bill that blends and updates three versions of previous bills passed by House committees. The $894 billion healthcare reform package will cover 96 percent of Americans; and, according to a news release by the Committee on Ways and Means, is fully paid for. At the unveiling of the bill, House Speaker Nancy Pelosi (D-CA) noted that the bill would immediately close the so-called "donut-hole" in Medicare Part D. The reform bill was stripped of its Medicare payment reform provisions as House leaders instead opted to introduce a separate bill that would permanently reform the physician payment system. The aforesaid Medicare Physician Payment Reform Act (H.R. 3961) replaces the much-criticized sustainable growth rate formula with a new system and repeals a 21 percent fee reduction, scheduled to go into effect for January 2010.
The bill retains the controversial public option by establishing a government-run option, available within the national "Health Insurance Exchange". Under a Pelosi-inspired alteration in the bill, the Secretary of DHHS will administer the public option and NEGOTIATE rates for providers that participate in the public option. The proposed legislation also authorizes start-up loans to assist states with the creation of health insurance co-operatives as an additional option.
The reform bill prohibits insurance rating based on health status or pre-existing conditions. In addition, employers would be required either to provide health insurance to their employees or contribute 8% of their payroll to help cover expenses of employees who seek coverage through a national Exchange (or an optional state exchange). Employers that choose to offer coverage must contribute at least 72.5% of the premium for workers, and 65% for families. Small businesses with annual payrolls below $500,000 are exempt from requirements to offer or contribute to coverage, including the 8% payroll contribution for failure to provide health benefits to workers.
Under the proposed healthcare reform bill, individuals are required to obtain health insurance coverage or pay a fee equal to the lower of 2.5% of their adjusted income above the filing threshold or the average premium on the Exchange. Affordability credits would be available to American citizens and legal residents with incomes up to 400% of the federal poverty level (FPL).
The bill would expand Medicaid coverage to everyone with income at or below 150% of FPL ($33,100 per year for a family of 4) who is not eligible for Medicare. The bill would also require that physicians and other practitioners be paid for primary care services they provide to Medicaid patients at 100% of Medicare rates beginning in 2012. In addition, the bill would reduce Medicaid disproportionate share hospital (DSH) payments to states by a total of $10 billion ($1.5 billion in FY 2017, $2.5 billion in FY 2018, and $6.0 billion in FY 2019).
To pay for the expansions of coverage, the bill would impose a surcharge on taxpayers with adjusted gross income in excess of $1 million (married filing a joint return) and $500,000 (single) at a rate of 5.4%. Beginning in 2011, the bill would reduce Medicare Advantage (MA) payments over 3 years to achieve parity with 100% of Medicare fee-for-service rates.
