Democratic House Leaders Roll Out Health Care Reform Proposal

On Friday, House Democrats released a discussion draft of health care reform legislation, the New York Times reports.

The bill’s authors said the legislation would provide coverage for 95% of U.S. residents. According to the New York Times, the bill did not include details on how much it would cost or how it would be funded.

The proposal — drafted by House Education and Labor Committee Chair George Miller (D-Calif.), House Energy and Commerce Committee Chair Henry Waxman (D-Calif.) and House Ways and Means Committee Chair Charles Rangel (D-N.Y.) — includes:
• A public option run by HHS that would offer three or four policies with different benefit levels. The option would initially use Medicare fee schedules, paying most providers at Medicare rates plus about 5%, with fees later being negotiated by the HHS secretary;
• A limit on what physicians could charge patients in the public insurance plan, similar to how Medicare can cap physicians’ charges (Pear/Herszenhorn, New York Times, 6/20);
• The creation of national and/or state-based health insurance exchanges for individuals and small businesses (Young, The Hill, 6/19);
• An individual mandate, and a tax on those people “without acceptable health care coverage” that would be based on an individual’s income and could not exceed the average cost of a basic health insurance policy. There would be an exemption for people that can prove financial “hardship”;
• A requirement that most employers provide coverage to employees or pay a fee equivalent to 8% of their payroll;
• Subsidies to help purchase coverage for U.S. residents with incomes of between 133% and 400% of the federal poverty level;
• A provision to prevent private insurers from denying coverage or charging higher premiums to people with pre-existing conditions (New York Times, 6/20);
• A cap on insurers’ profit and administrative margins at 15% of revenue premiums, also known as the minimum loss ratio (Armstrong [1], CQ Today, 6/19);
• An expansion of Medicaid eligibility to U.S. residents with incomes of up to 133% of the federal poverty level (Smith, Reuters, 6/19);
• An increase in Medicaid payments to primary care physicians;
• A reversal of scheduled cuts to Medicare physicians’ payments;
• The creation of a new federal agency that would regulate health insurance and be led by a “health choices commissioner,” who would be appointed by the president (New York Times, 6/20);
• A provision that would eliminate the “doughnut hole” in the Medicare prescription drug benefit by requiring rebates from drugmakers;
• A cap on out-of-pocket costs to curtail medical bankruptcies (Dennis, Roll Call, 6/19); and
• A requirement that the public option be subject to the same rules as private plans (Edney, CongressDaily, 6/19).
According to the New York Times, the proposal is more expansive than the legislation being drafted in the Senate by the Senate Finance Committee and the Senate Health, Education, Labor and Pensions Committee (New York Times, 6/20).
Although the bill does not include an official cost estimate, the Los Angeles Times reports that the measure could cost more than $1 trillion (Levey, Los Angeles Times, 6/20).
House Majority Leader Steny Hoyer (D-Md.) said that the measure does not include a cost estimate because “we are reluctant to ask the Congressional Budget Office for a score” until “we have a final product.” However, Hoyer said, “whatever we do will be fully paid for.”
House Democrats said they would pay for the plan by slowing the growth of Medicare and imposing new, unspecified taxes (New York Times, 6/20).
Lawmakers also are considering taxing employer-sponsored health benefits above a specified level (Los Angeles Times, 6/20). Other possible tax increases include:
• A value-added tax;
• Increased taxes on higher-income U.S. residents;
• A higher Medicare payroll tax;
• A tax increase on sugary sodas; and
• An increase on the alcohol tax (The Hill, 6/19).
While pay/go rules require that the entire cost of the bill be offset, House Democrats plan to waive the rules for the reform bill, CQ Today reports (Wayne, CQ Today, 6/19).
According to the New York Times, Democratic House leaders likely would be able to pass their measure in the House on a party-line vote.
This week, the three House committees with jurisdiction over health care reform plan to hold up to six hearings on the measure (New York Times, 6/20).
House Speaker Nancy Pelosi (D-Calif.) has set a July 31 deadline for passing health care reform legislation (The Hill, 6/19).
Waxman said the leaders hope to get the legislation to President Obama by October (Armstrong [2], CQ Today, 6/19).
Broadcast Coverage
American Public Media’s “Marketplace” on Friday reported on the House Democrats’ plan. The segment includes comments from Rangel and White House Office of Management and Budget Director Peter Orszag (Keith, “Marketplace,” American Public Media, 6/19).
NPR’s “All Things Considered” on Friday reported on the House Democrats’ plan, including its timeline and prospects for passage (Rovner, “All Things Considered,” NPR, 6/19).

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