Senate HELP Committee Introduces Affordable Health Choices Act

The Health, Education, Labor, and Pensions (HELP) Committee, chaired by Senator Edward Kennedy, has released a draft health reform bill. The HELP Committee is one of two committees in the Senate with jurisdiction over health reform. The Finance Committee, that also has jurisdiction over health reform in the Senate, previously released three documents outlining policy options under consideration for health reform legislation anticipated to be introduced by the committee later this month. Key components of the HELP Committee draft proposal include:

· Individual and Group Insurance Market Reforms: Health plans may not impose pre-existing condition exclusions, must accept all individuals and employers that apply for coverage, and may not base premiums on health status, gender, class of business, or claims experience. Premium rates may only vary by rating area, family structure, actuarial value of benefits, and age. Health plans must establish reimbursement incentives for quality, provide coverage for preventive care, provide dependent coverage for children through the age of 26, and are prohibited from establishing annual or lifetime benefit limits.

· American Health Benefit Gateways: Establishes “Gateways” or health insurance exchanges at a state level for individuals and employers to compare and enroll in health insurance coverage. Gateways will also assist eligible individuals in enrolling in Medicaid, CHIP, or other federal health programs for which they may be eligible. Participation in a Gateway is voluntary. A “Medical Advisory Council” is to be established to make recommendations on the criteria for a minimum benefit set and the conditions under which coverage is considered affordable for individuals and families at different income levels.

· Affordability: Three different levels of cost sharing are to be established for qualified health plans offered in a Gateway. Premium credits for the purchase of qualified health plans will be provided on a sliding scale for individuals and families with incomes up to 500 percent of the federal poverty level. Medicaid eligibility is to be expanded to 150 percent of the federal poverty level. A health insurance credit or subsidy will be available to small employers with fewer than 50 fulltime employees who have an average wage of $50,000 or less.

· Shared Responsibility: Individuals will be required to have health insurance coverage and will be assessed a “shared responsibility payment” through the tax system for every month that they are without coverage. An exemption will be available for individuals without access to affordable coverage. Although the bill language is silent on an employer mandate the committee summary of the bill poses various options for the committee to consider, including a requirement that employers that do not contribute a certain percentage towards the cost of employee health coverage would be required to pay a fee. Small employers are exempt.

· Health Information Technology: Requires the development of standards-based, interoperable systems to facilitate the electronic enrollment of individuals in federal and state health and humans services programs. Awards grants to state or local governments to develop new or adapt existing technology to simplify the enrollment and eligibility processes across a range of health and human services programs.

· Long-Term Care Services and Supports: Establishes the “CLASS” program which is a voluntary long term care insurance program to provide cash benefits, advocacy services, and counseling for individuals who have functional limitations expected to last more than 90 days. The program is funded through beneficiary premiums paid into a fund managed by the Secretary of the Treasury. Employers who automatically enroll employees will receive a 25 percent premium credit.

· Government-Sponsored Plan: A public plan will be created to compete with private insurers in the “Gateway”. Although not included in the bill language, the committee summary discusses that under the public plan, reimbursement rates for providers would be set at Medicare rates plus ten percent.