Understanding Health Care Reform

Updated November 9, 2009

As the House and Senate continue to negotiate the details of the 2009 Health Care Reform bills, many inaccurate accounts of the provisions have been reported. This guide is intended to clear away the confusion and provide the facts as they are supplied by the legislative committees themselves.

Whether you are for or against Health Care Reform, this guide will provide a clear picture on what is and is not included in the reform bills. At this time, there are several bills in both the House and Senate, each of which has differences in policy. Keep in mind that bills can be rewritten in part or in whole before signed into law. The House and Senate bills must be combined before passage. This guide provides an overview of H.R. 3200 and S.1679. These bill are just a starting point and will surely see revisions.

We will continue to update this guide as the bills progress through the legislative process.

Please select a quick link (or scroll down):

What is the Disability Community looking for in Health Care Reform?

For a side-by-side comparison of the House and Senate Reform Bills, developed by the Disability Coalition for Healthcare Reform, visit www.paraquad.org/Policy/documents/11-10-09analoflegislation.pdf.

The Disability Coalition for Healthcare Reformis looking for reform that will provide guaranteed, affordable health coverage for all with a choice of private or public plans that cover all medically necessary services. More specifically, the coalition will support a bill that will:

End the two-year waiting period for Medicare

    [The house bill promises to improve low-income subsidy programs in Medicare]

Provide Medicaid health care coverage to all Americans living at or below 100% of the federal poverty level
A person earning $10,830 is priced out of the insurance market.

    [The house bill would expand Medicaid to individuals and families with incomes at or below 133 percent of the federal poverty level.]

    [The senate bill does not specify new Medicaid limits.]

Eliminate pre-existing condition exclusions and rating based on age, health status and gender
Because of unfair insurance practices, many families cannot buy insurance even if they can afford it.

    [Both the house and senate bill would guarantee coverage and disallow insurance companies from denying coverage based on an individual's health status or pre-existing health conditions.]

Include subsidies for lower-income Americans who cannot afford health care costs
80% of the uninsured are from working families. We need affordable options so all Americans can access care and take their child to a doctor when needed.

    [Both the house and senate bill will provide credits to offset the cost of premiums and co-pays to Individuals and families with income less than 400% of the federal poverty level ($43,000 for an individual or $88,000 for a family of four).]

Reform the long-term care system to increase choice and access to home and community-based services
Very little funding is provided for long-term care supports in the home. Taking individuals out of their homes and forcing them into nursing homes costs everyone more money and breaks families apart.

    [It does not appear as though the house bill makes any changes to the long term care system. Advocacy is still needed to ensure that this administration sees the benefit of providing home-based care.]

    [The senate bill includes a provision for Community Living Assistance Services and Supports (CLASS), which would provide employed individuals an option to participate in an insurance program that would provide a cash benefit to purchase long-term community living assistance.]

Health Care Reform: Fact vs. Fiction

Before we get into the details of the bill itself, we would like to first address a few myths and misinformation that has been circulating since it's introduction:

Following are a few facts offered by the American Association of Retired Persons and the American Association of People with Disabilities to help clear the confusion.

  • FACT #1: Medicare will not be ended, and no benefits or services will be cut. The cuts discussed are strictly to reduce wasteful spending and are not designed to cut benefits.

  • FACT #2: No legislation currently in Congress would mandate the rationing of care. There is concern that a government-run program will result in only certain treatments being covered. While no plan, private or public, will cover all treatment options, the public plan will simply act to inform the patient and doctor on the best course of treatment for a particular condition.

  • FACT #3: There is no provision of any piece of legislation that would promote euthanasia of any kind.

  • FACT #4: Access to Medicaid would be expanded. All non-elderly people earning at or below 133% of poverty - about $14,400 for an individual, and $29,300 for a family of four - would be eligible under the new bill.

  • FACT #5: Insurance companies would no longer be allowed to discriminate against people with disabilities by denying coverage or adjusting premiums for pre-existing conditions or by capping benefits.

  • FACT #6: The Government would increase coverage of necessary supports like durable medical equipment (wheelchairs, walkers, canes, etc.) and therapy services.

To get a clearer picture on what Health Reform will and will not do, visit the White House's Health Insurance Reform Reality Check website online at www.whitehouse.gov/realitycheck.

The House Bill: Affordable Health Care for America Act

Introduced on October 29, 2009, this bill combines the previous bills passed by the The House Committees on Education and Labor, Ways and Means, and Energy and Commerce. The bill is designed to slow the growth in out-of-control costs, introduce competition into the health care marketplace to keep coverage affordable and insurers honest, protect people’s choices of doctors and health plans, and assure all Americans access to quality, stable, affordable health care.

Choice

If you like your current coverage, you can keep it! You will not be forced to join a public coverage option. This bill provides more options that are intended to create competition and therefore, drive down prices. Following are a few ways in which this bill will improve choice.

  • Health Insurance Exchange - The "exchange" will serve as a marketplace for individuals and small employers to comparison shop among private and public insurers.

  • A Public Health Insurance Option - This option will provide greater choice and affordability through competition with private plans. The plan will be subject to the same market reforms and consumer protections as private plans and will be paid for solely via its premiums.

  • Guaranteed Coverage - Insurance companies will no longer be able to deny coverage based on an individual's health status - everyone will be insurable. Additionally, they will no longer be able to exclude coverage of treatments for pre-existing health conditions.

  • Market Reforms - Lifetime and annual limits on benefits will be prohibited. Insurance companies will also no longer have the ability to charge higher rates due to health status, gender, or other factors other than age, geography and family size.

Affordability

This bill would ensure that health care would no longer be out of reach for low- and moderate-income individuals and families:

  • Affordability Credits - Individuals and families with income less than 400% of the federal poverty level ($43,000 for an individual or $88,000 for a family of four) and whose employers do not offer coverage or the premium costs exceed 12% of income, will be granted credits to offset the cost of premiums and co-pays. Credits are not available to Medicare or Medicaid beneficiaries. Specific out-of-pocket maximums are added to protect individuals at each income tier.

  • Caps on Annual Out of Pocket Spending - Individuals will no longer have to fear bankruptcy due to unaffordable medical expenses. Caps will ensure more manageable out-of-pocket expenses. Individuals will have an annual limit of $5000, while couples will have a limit of $10,000. Lower caps are available to those who receive affordability credits.

  • Expansion of Medicaid - Individuals and families with incomes at or below 150 percent of the federal poverty level will be eligible for an expanded and improved Medicaid program.

  • Improvement of Medicare - New provisions will fill the donut hole, over time in the Part D drug program and eliminate cost-sharing for preventive services. It is projected that the solvency of Medicare will be extended 5 yers by cracking down on waste, fraud and abuse.

Shared Responsibility

This bill does not place the burden of providing and obtaining health care on any one entity, but rather requires that every individual and business share the responsibility in ensuring affordable coverage. A big fear associated with the reform is the burden it will place on employers. Regulations are in place to ensure that employers with the smallest payrolls will not be required to offer coverage or contribute on behalf of their workers.

  • Individuals will be required to obtain a health plan or risk being penalized a small percentage of their modified adjusted gross income above a specified level. Those with incomes less than $9350 for individuals and $18,700 for couples will be exempt from the penalty. Hardship waivers can be sought.

  • Employers will have the option of providing health insurance coverage for their workers or contributing funds on their behalf. Employers that choose to contribute will pay an amount based on eight percent of their payroll. Employers must contribute at least 72.5% of the premium for workers and 65% of the premium for families

  • Small Businesses, with payrolls less than $500,000 are exempt from the employer contribution requirement. A sliding scale to determine the contribution will be in effect for businesses with payrolls between $500,000 and $750,000. Businesses with payrolls above $750,000 will be required to pay 8%.

The Senate Bill: S. 1679 - Affordable Health Choices Act

Introduced July 15, 2009, the Affordable Health Choices Act seeks to make quality, affordable health care available to all Americans, reduce costs, improve health care quality, enhance disease prevention, and strengthen the health care workforce.

Following are the provisions we feel are specifically relevant to individuals with disabilities. For a detailed overview of every provision, please visit HELP Committee Affordable Health Choices Act - Detailed Summary.

Effective Coverage for All Americans

  • Insurance Market Reforms - Rates will not be permitted to vary based on gender, class of business, or claims experience. Insurance approval and renewal will be required, unless insurance fraud is detected.

  • Prohibiting Discrimination Against Individual Participants and Beneficiaries Based on Health Status - Coverage terms cannot be based upon an individuals health status, medical condition (including physical and mental illness) or disability.

  • Coverage of Preventive Health Services - Insurers must cover the cost of preventive health services endorsed by the U. S. Preventive Services Task Force.

  • No Lifetime or Annual Limits - No individual or group health insurance policy will be permitted to establish lifetime or annual limits on the dollar value of benefits for any enrollee or beneficiary.

Available Coverage for all Americans

  • Creation of the American Health Benefit Gateway - Each state will have a gateway through which individuals and businesses may voluntarily purchase affordable health insurance coverage, including public health insurance. Plans offered via the gateway, must meet the standards outlined above.

  • Keep Your Existing Coverage - Individuals will not be required to purchase a plan through the gateway and may keep their existing coverage.

Affordable Coverage for all Americans

  • Individual Health Coverage Credits - Plans obtained through the Gateway will provide premium credits to any individual or family earning less than 400% of the poverty level. Those with the lowest incomes with receive the highest credits.

  • Small Business Health Options Credit - Beginning in 2010, employers with 50 or fewer full time workers who pay 60 percent or more of their employees' health insurance premiums will be permitted to receive credits of up to $2,000 per employee to subsidize coverage.

Shared Responsibility for Health Care

  • Individual Responsibility - All individuals will be required to obtain health insurance coverage. Exceptions will be made for individuals who will experience an exceptional financial hardship or who dot have access to affordable coverage. Penalties for those without exemptions will be charged a penalty not to exceed $750 per year.

  • Employer Responsibility - Employers with more than 25 employees who do not offer qualifying coverage or who pay less than 60 percent of their employees' monthly premiums are subject to a $750 annual fee per uninsured full-time employee and $375 per uninsured part-time employee. For employers subject to the assessment, the first 25 workers will be exempted. Employers with 25 or fewer employees are exempt from penalties.

Community Living Assistance Services and Supports (CLASS)

CLASS creates a new national insurance program to help working adults who have or develop functional impairments to remain independent and remain part of their communities. Financed through voluntary payroll deductions, this program will remove barriers to independence and choice by providing a cash benefit to individuals unable to perform two or more functional activities of daily living. Cash benefits will be paid into a Life Independence Account to purchase non-medical services and supports needed to maintain a beneficiary's independence at home or in another residential setting, including home modifications, assistive technology, accessible transportation, homemaker services, respite care, personal assistance services, home care aides, and added nursing support.

Access to Preventive Services and Creating Healthier Communities

  • Right Choices Program - The Right Choices Program would provide chronic disease health risk assessment, a care plan, and referrals to community-based resources for low-income, uninsured adults until universal insurance coverage is made available through the Gateway.

  • Wellness for Individuals with Disabilities - Amends the Americans with Disabilities Act to establish standards for accessibility of medical diagnostic equipment to individuals with disabilities.

Paying for the Reform

With any reform comes the question of "Who is going to pay for it?"

Under the House bill, there are three taxes that will cover the cost of the reform.

  • Tax #1: Individuals Without Acceptable Health Care Coverage - People who do not obtain insurance will be penalized via a tax based on the lesser amount of (a) the national average cost of a basic healthcare plan, or (b) two percent of their adjusted gross income. Some economists have argued that this tax would be a violation of President Obama's campaign pledge to not raise taxes on people who make less than $250,000. It is unclear whether the president supports this provision or if it will make it into the final version.

  • Tax #2: Employers Who Choose Not to Provide Health Insurance for Their Employees - Any employer with a payroll above $500,000 will be required to offer health insurance to their employees. If they choose not to offer coverage, they will be required to pay a tax based on their payroll amount.

  • Tax #3: Surcharge on the Rich - A tax at the rate of 5.4 percent will be imposed on any individual that has an income at or above $500,000.

Sources:

Affordable Health Care Act for America- edlabor.house.gov/blog/2009/10/affordable-health-care.shtml
Prepared by the House Committee on Education and Labor

The Health Care Bill's Tax Increases - www.opencongress.org/articles/view/1187-The-Health-Care-Bill-s-Tax-Increases

HELP Committee Affordable Health Choices Act - Detailed Summary - http://help.senate.gov/DetailedSummary.pdf
Prepared by the U.S. Senate Committee on Health, Education, Labor, and Pensions

Open Congress: H.R.3200 - America's Affordable Health Choices Act of 2009 - www.opencongress.org/bill/111-h3200/show

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