Health Reform: Major Congressional Proposals Joshua Goldberg State Coverage Initiatives National Meeting Albuquerque, NM July 30, 2009

Congressional Action Timeline - Finance White Paper – Nov HELP Committee Draft – June House Tri-Committee Draft – June HELP Markup – June 17 – July 15, 2009 Committee Adoption by July 4 Recess - Floor Passage by August Recess - - Hearings and Roundtables

Building Blocks of Reform Insurance Market Reforms Individual Mandate / Employer Mandate Guaranteed Issue / No preexisting conditions Federal rating rules No annual or lifetime limits Minimum benefits package Health Insurance Exchange Facilitate plan comparisons and purchase Low income subsidies Defined benefit packages Risk adjustment Public Plan Competing against private plans Medicaid Expansion 133% FPL

HELP Committee Insurance Market Reforms Individual mandate –Federal tax penalty defined by Secretary –Exemptions defined by Secretary Employer mandate –Employers with more than 25 employers must provide “adequate coverage” and contribute 60% of premium –$750/employee annual penalty Guaranteed issue No preexisting condition exclusions Adjusted community rating –Age (2:1 maximum) –Geography No annual or lifetime limits

HELP Committee Health Insurance Exchange States may establish “Gateways” Federal government operates if states do not establish Functions: –Certify participating plans –Administrative simplification –Risk adjustment –Enroll individuals in plans –Administer subsidies Sliding scale subsidy up to 400% FPL “Navigators” to assist with plan selection Benefit mandates maintained, states must pay additional cost for subsidies Secretary to establish essential health benefits

HELP Committee Public Plan “Community Health Insurance Option” Offered through Gateways Administered by HHS Provider reimbursements negotiated Subject to solvency standards Follows same benefit and consumer protection rules as other Gateway plans State advisory council

HELP Committee Transition Planning grants to states Grandfathering: –Group and individual coverage in effect before enactment –No new enrollments

House Tri-Committee Health Choices Commissioner Heads “Health Choices Administration” Develop new federal standards for: –Marketing –Grievances and appeals –Network adequacy –Prompt pay –Coordination of benefits & subrogation –Medical loss ratios No guidance in statute for federal standards

House Tri-Committee Insurance Market Reforms Individual mandate –2% federal tax penalty on income after standard deduction and exemption –Secretary to provide exemptions Employer mandate –8% payroll tax –Must provide 72.5% actuarial value coverage of basic benefit package Guaranteed issue No preexisting condition exclusions Adjusted community rating –Age (2:1 maximum) –Geography No annual or lifetime limits New federal consumer protection standards

House Tri-Committee Health Insurance Exchange National Exchange w/ state option –State must apply and fulfill functions of exchange –Commissioner may approve Facilitate comparison and enrollment in plans All plans are individual plans –Participating employers are list-billed No individual plans may be sold outside exchange Carriers submit annual bids to participate Commissioner specifies benefits each year –Health Benefits Advisory Committee makes recommendations Exchange administers subsidies –Sliding scale subsidies up to 400% FPL –Apply to premiums and cost sharing

House Tri-Committee Public Plan Offered through Gateways Administered by HHS Providers initially reimbursed at Medicare levels –5% bonus if provider participates in both programs –Flexibility added over time Follows same benefit and consumer protection rules as other Exchange plans

House Tri-Committee Transition Grandfathering –Individual No new enrollment Dependents may be added –Group Transitioned to new rules within 5 years

Senate Finance Still awaiting a final document for consideration Bipartisan discussions are continuing

Senate Finance Market Reforms Individual Mandate Guaranteed issue No preexisting condition exclusions Adjusted community rating-7.5:1 max –Age –Geography –Tobacco No lifetime or annual limits 4 tiers of plans

Senate Finance Health Insurance Exchanges State-based exchanges –Individual and small group Facilitate comparison and enrollment

Senate Finance Outstanding Issues Financing Employer mandate Public plan