For Your General Info . . .



Yesterday in his TPM Editor's blog Josh posted this quote attributed to some reader by the initials of BK  . . .

Actually, its greatest point of vulnerability will be the 2012 election, since much of it doesn't take effect until 2013. The mandates that will drive up costs will take effect before then--young people will pay much more since premiums will be equalized for all age groups and private companies will have to cover even sick people. Since there will be no opt-out or no competition, they will be able to charge whatever they want.

By 2012, the exchanges that will get small business owners and employees insured are not supposed to be set up. So basically, all the politically and economically costly things go into effect first, and the beneficial things (insuring people and taking burdens off small business) will not have materialized. It's perfect for demonization.

What stood out to me was what reader BK stated in the above:

The mandates that will drive up costs will take effect before then--young people will pay much more since premiums will be equalized for all age groups and private companies will have to cover even sick people. Since there will be no opt-out or no competition, they will be able to charge whatever they want.

If reader BK comes by and reads this blog I'd advise the individual to specifically read the section on "Individual mandate" -- specifically in H.R. 3962 below dealing with mandates and the date of implementation.

Plus, BK should not overlook "Expansion of public programs" and the section dealing with "Establish a temporary national high-risk pool to provide health coverage to individuals (and spouses and dependents) with pre-existing medical conditions. Individuals who have been denied coverage, offered unaffordable coverage, have an eligible medical condition or who have been uninsured for at least six months will be eligible to enroll in the national high-risk pool" and it's effective date of implementation.

In addition the individual should take a real close read of the section below dealing with "Changes to Private Insurance" -- specifically in H.R. 3962 dealing with "Require review of increases in health insurance premiums prior to implementation of the increases." and the associated date that requirement will take effect. (Hint: when the bill is signed and becomes Public Law as in effective upon enactment)

Another section that may be of interest to BK in "Changes to Private Insurance" -- specifically in H.R. 3962 is;  "Remove the anti-trust exemption for health insurers and medical malpractice insurers." (Effective upon enactment)

So ...

Here is the latest rundown from the Kaiser Foundation interactive side-by-side comparison tool on what and when key provisions are purportedly set to go into effect.


Expansion of public programs

H.R. 3962

• Expand Medicaid to all individuals under age 65 (children, pregnant women, parents, and adults without dependent children) with incomes up to 150% FPL. Provide Medicaid coverage for all newborns who lack acceptable coverage and provide optional Medicaid coverage to low-income HIV-infected individuals (with enhanced matching funds) until 2013 and for family planning services to certain low-income women. In addition, increase Medicaid payment rates for primary care providers to 100% of Medicare rates by 2012. Require states to submit a state plan amendment specifying the payment rates to be paid under the state's Medicaid program. The coverage expansions (except the optional expansions) and the enhanced provider payments will be financed with 100% federal financing through 2014 and 91% federal financing beginning in year 2015. (Effective January 1, 2013)
• Repeal the Children's Health Insurance Program (CHIP) and require CHIP enrollees with incomes above 150% FPL to obtain coverage through the Health Insurance Exchange beginning in 2014. CHIP enrollees with incomes between 100% and 150% FPL would be transitioned to Medicaid and states would receive the CHIP enhanced match rate for children above current levels and up to 150% FPL. Require a report to Congress with recommendations to ensure that coverage in the Health Insurance Exchange is comparable to coverage under an average CHIP plan and that there are procedures to transfer CHIP enrollees into the exchange without interrupting coverage or with a written plan of treatment. (Report due by December 31, 2011)

Baucus Bill:

• Expand Medicaid to all individuals (children, pregnant women, parents, and adults without dependent children) with incomes up to 133% FPL (to be implemented in 2014). Adults with incomes between 100-133% FPL will have the option of obtaining coverage through Medicaid or with federal subsidies through the exchange. All newly eligible adults will be guaranteed a benchmark benefit package that at least meets the minimum creditable coverage standards. Require states to provide premium assistance to any Medicaid beneficiary with access to employer-sponsored insurance if it is cost-effective for the state. To finance the coverage for the newly eligible (those who were not previously eligible for a full benchmark benefit package or who were eligible for a capped program but were not enrolled), states will receive an increase in the federal medical assistance percentage (FMAP). Initially, the percentage point increase in the FMAP will be 27.3 for states that already cover adults with incomes above 100% FPL and 37.3 for other states. These percentage point increases will be adjusted over time so that by 2019, all states will receive an FMAP increase of 32.3 percentage points for the newly eligible. High need states--those with total Medicaid enrollment that is below the national average for enrollment as a percentage of the state population and unemployment rates of 12% or higher for August 2009--will receive full federal funding for the newly eligible for five years.
• Require states to maintain current income eligibility levels for children in Medicaid and the Children's Health Insurance Program (CHIP) until 2019. CHIP benefit package and cost-sharing rules will continue as under current law. Beginning in 2014, states will receive a 23 percentage point increase in the CHIP match rate up to a cap of 100% and a .15 percentage point increase in the Medicaid match rate. CHIP-eligible children who are unable to enroll in the program due to enrollment caps will be eligible for tax credits in the state exchanges.

Changes to Private Insurance

H.R. 3962

• Establish a temporary national high-risk pool to provide health coverage to individuals (and spouses and dependents) with pre-existing medical conditions. Individuals who have been denied coverage, offered unaffordable coverage, have an eligible medical condition or who have been uninsured for at least six months will be eligible to enroll in the national high-risk pool. Premiums for the high-risk pool will be set at not higher than 125% of the prevailing rate for comparable coverage in the state and could vary by no more than 2:1 due to age; annual deductibles will be limited to $1,500 for an individual; and maximum cost-sharing will be limited to $5,000 for individuals. (Effective January 1, 2010 and until the Health Insurance Exchange is established)
• Individuals eligible for COBRA continuation coverage may retain COBRA coverage until the Exchange is established or they obtain acceptable coverage. (Effective upon enactment)
• Limit health plans' medical loss ratio to not less than 85% to be enforced through a rebate back to consumers and prohibit plans from imposing aggregate dollar lifetime limits on coverage. (Effective January 1, 2010) Prohibit insurers from rescinding coverage except in cases of fraud. (Effective July 1, 2010)
• Adopt standards for financial and administrative transactions to promote administrative simplification. (Effective upon enactment)
• Require review of increases in health insurance premiums prior to implementation of the increases. (Effective upon enactment)
• Provide dependent coverage for children up to age 27 for all individual and group policies. (Effective January 1, 2010)
• Limit pre-existing condition exclusions for group policies prior to implementation of the insurance market reforms by shortening the period plans can look back for pre-existing conditions from six months to 30 days and shortening the period plans can exclude coverage of certain benefits from 12 months to three months. (Effective January 1, 2010)
• Prohibit reductions to retiree benefits unless reductions also apply to current employees. (Effective upon enactment)
• Prohibit coverage purchased through the individual market from qualifying as acceptable coverage for purposes of the individual mandate unless it is grandfathered coverage. Individuals can purchase a qualifying health benefit plan through the Health Insurance Exchange. (Effective January 1, 2013)
• Impose the same insurance market regulations relating to guarantee issue, premium rating, and prohibitions on pre-existing condition exclusions in the insured group market and in the Exchange. (See creation of insurance pooling mechanisms). (Effective January 1, 2013)
• Improve consumer protections by establishing uniform marketing standards, requiring fair grievance and appeals mechanisms and accurate and timely disclosure of plan information. (Effective January 1, 2013)
• Create the Health Choices Administration to establish the qualifying health benefits standards, establish the Exchange, administer the affordability credits, and enforce the requirements for qualified health benefit plan offering entities, including those participating in the Exchange or outside the Exchange.
• Permit states to form Health Care Choice Compacts to facilitate the purchase of individual insurance across state lines. (Effective January 1, 2015)
• Remove the anti-trust exemption for health insurers and medical malpractice insurers. (Effective upon enactment)

Baucus Bill (No dates set for implemetation):

• Impose the same insurance market regulations relating to guarantee issue, premium rating, prohibitions on pre-existing condition exclusions, risk adjustment, and rescissions in the individual market, in the exchange, and in the small group market, phasing in the new rules for small group market over five years. (See new rating and market rules in Creation of insurance pooling mechanism.)
• Require health plans to report the proportion of premium dollars spent on items other than medical care and require plans to compile information on coverage in a standard format.
• Require all new policies (except stand-alone dental, vision, and long-term care insurance plans) to comply with one of the four benefit categories, including those offered through the exchanges and those offered outside of the exchanges. Require health plans in the individual and small group markets to at least offer coverage in the silver and gold categories. Existing individual and employer-sponsored plans do not have to meet the new benefit standards. (See description of benefit categories in Creation of insurance pooling mechanism.)
• Require small employers to provide a plan with a deductible that does not exceed $2,000 for individuals and $4,000 for families unless contributions are offered that offset deductible amounts above these limits. This deductible limit will not affect the actuarial value of bronze plans and does not apply to "young invincible" plans. (See description of benefit categories in Creation of insurance pooling mechanism.)
• Allow states the option of merging the individual and small group markets.
• Create a temporary reinsurance program to help stabilize premiums during the first three years of operation of the exchanges when the risk of adverse selection due to enforcement of the new rating rules and market changes is greatest. Finance the reinsurance program through mandatory contributions by health insurers.
• Allow insurers to offer a national health plan with a uniform benefits package in the states in which they are licensed.  National plans would be required to offer plans with silver and gold benefit packages and would be exempt from state benefit requirements. Allow states to opt out of the national plan.
• Permit states to form health care choice compacts and allow insurers to sell policies in any state participating in the compact. Insurers selling policies through a compact would only be subject to the laws and regulations of the state where the policy is written or issued.

Benefit design:

H.R. 3962

• Create an essential benefits package that provides a comprehensive set of services, covers 70% of the actuarial value of the covered benefits, limits annual cost-sharing to $5,000/individual and $10,000/family, does not require cost-sharing for preventive services, and does not impose annual or lifetime limits on coverage. The Health Benefits Advisory Council, chaired by the Surgeon General, will make recommendations on specific services to be covered by the essential benefits package as well as cost-sharing levels. Prohibit abortion coverage from being required as part of the essential benefits package; require segregation of public subsidy funds from private premiums payments for plans that choose to cover abortion services beyond those for which public funding is permitted (public funding of abortions is permitted to save the life of the woman and in cases of rape or incest); and require there be no effect on state or federal laws on abortions. (Health Benefits Advisory Council report due one year following enactment; essential benefits package becomes effective January 1, 2013)
• All qualified health benefits plans, including those offered through the Exchange and those offered outside of the Exchange (except certain grandfathered individual and employer-sponsored plans) must provide at least the essential benefits package. (Effective January 1, 2013)
• Require a report on including oral health benefits in the essential benefits package. (Report due one year following enactment)

Baucus Bill (No dates set for implementation):

• Create minimum creditable coverage that provides a comprehensive set of services, covers 65% of the actuarial value of the covered benefits, limits annual cost-sharing to $5,950/individual and $11,900/family, does not impose annual or lifetime limits on coverage, and is not more extensive than the typical employer plan. Require the Secretary to define and annually update the benefit package through a transparent and public process. (See description of benefit categories in Creation of insurance pooling mechanism.)
• Prohibit abortion coverage from being required as part of the minimum benefits package; require segregation of public subsidy funds from private premium payments for plans that choose to cover abortion services beyond Hyde--which allows coverage for abortion services to save the life of the woman and in cases of rape or incest; and require there be no effect on state or federal laws on abortions.

Individual mandate:     

H.R. 3962

• Require all individuals to have "acceptable health coverage". Those without coverage pay a penalty of 2.5% of their adjusted income above the filing threshold up to the cost of the average national premium for self-only or family coverage under a basic plan in the Health Insurance Exchange. Exceptions granted for those with incomes below the filing threshold (in 2009 the threshold for taxpayers under age 65 is $9,350 for singles and $18,700 for couples), religious objections and financial hardship. (Effective January 1, 2013)

Baucus Bill:

• Require U.S. citizens and legal residents to have qualifying health coverage. Enforced through a tax penalty of $750 per adult per year. The penalty will be phased-in according to the following schedule: $0 in 2013; $200 in 2014; $400 in 2015; $600 in 2016; and $750 in 2017. Exemptions will be granted for financial hardship, religious objections, American Indians, and if the lowest cost plan option exceeds 8% of an individual's income or if the individual has income below 133% of the poverty level.

Premium subsidies to employers

H.R. 3962

• Provide small employers with fewer than 25 employees and average wages of less than $40,000 with a health coverage tax credit for up to two years. The full credit of 50% of premium costs paid by employers is available to employers with 10 or fewer employees and average annual wages of $20,000 or less. The credit phases-out as firm size and average wage increases and is not permitted for employees earning more than $80,000 per year. (Effective January 1, 2013)
• Create a temporary reinsurance program for employers providing health insurance coverage to retirees over age 55 who are not eligible for Medicare. Program will reimburse employers for 80% of retiree claims between $15,000 and $90,000. Payments from the reinsurance program will be used to lower the costs for enrollees in the employer plan. Appropriate $10 billion over ten years for the reinsurance program. (Effective 90 days after enactment)

Baucus Bill:

• Provide small employers with fewer than 25 employees and average annual wages of less than $40,000 that purchase health insurance for employees with a tax credit.
• Phase I : For tax years 2011 and 2012, provide a tax credit of up to 35% of the employer's contribution toward the employee's health insurance premium if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $20,000. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 25% of the employer's contribution toward the employee's health insurance premium.
• Phase II : For tax years 2013 and later, for eligible small businesses that purchase coverage through the state exchange, provide a tax credit of up to 50% of the employer's contribution toward the employee's health insurance premium if the employer contributes at least 50% of the total premium cost or 50% of a benchmark premium. The credit will be available for two years. The full credit will be available to employers with 10 or fewer employees and average annual wages of less than $20,000. Tax-exempt small businesses meeting these requirements are eligible for tax credits of up to 35% of the employer's contribution toward the employee's health insurance premium.
• Create a temporary reinsurance program for employers providing health insurance coverage to retirees ages 55 to 64. Program will reimburse employers or insurers for 80% of retiree claims between $15,000 and $90,000. Appropriate $5 billion to finance the program.

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Again: Here is the link to the interactive tool

kff.org/healthreform/sidebyside.cfm


And I truly hope for BK and Josh (and anyone else who bothers to read this) that this helps clarify the effective dates of implementation in relationship to the various sections of this bill.


~OGD~
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