02 July 2009

The HELP bill

The Senate HELP (Health, Education, Labor & Pensions) Committee took a sort of a mulligan today after an embarrassing miscue last week in which an incomplete bill was released for scoring by the Congressional Budget Office (CBO) and came back costing a trillion dollars and covering less than a third of the uninsured.   That was a pretty big PR setback for reform, and generated a lot of right-wing talking points against the bill, but it was all pretty meaningless as it wasn't the final bill being scored.   Finally today, a more-or-less complete version of the bill (PDF) is out, and it looks pretty good.

Key features:
  • Cost is in line with expectations at $1 to $1.3 trillion over ten years ($600 billion with an assumed $400-700B in expanding Medicaid to 150% FPL).
  • Coverage is near universal, about 97% of population, with 21 million newly insured and 20 million more in expanded Medicaid.  Illegal immigrants not covered, of course.
  • There is an employer mandate with a "pay or play" clause, with exclusions and/or credits for small businesses.
  • There is an individual mandate with a meaningful penalty of not less than half the cost of insurance for those who can afford but do not purchase insurance.
  • There is a "weak" public plan, which I think is a good thing, called the "Community Health Insurance Option."
  • There is a limited health insurance exchange ("Gateways") administered by the states; these exchanges require community rating, guaranteed issue (i.e. no more pre-existing conditions exclusions) and prohibit recissions.  Very nice!

The Public Plan:
  • Will be run by the department of Health and Human Services (which also runs Medicare).
  • Will be voluntary for providers to participate or not.
  • Will reimburse providers based on the average commercial payer rate in a region, which will be periodically renegotiated.
  • Will be funded by premiums costs, not by taxpayer subsidies.
  • Has "risk corridor premiums" to prevent dumping of sick patients into the plan.
  • Start-up costs will be provided by the government in the form of a loan which must be be repaid over time.

Overall, this follows Chuck Schumer's principles for a "level playing field" public plan.  It won't get much republican support, I think, but it is clearly designed to rebut the criticisms that this is intended to be a back-door to a single payer system. 

While the public plan looks fair and good, I am a little concerned about the employer mandate.  The penalty for employers who do not offer insurance is $750 per employee per year, which is much more than the Massachusetts employer contribution but a lot less than the 8% of payroll that I've heard elsewhere.  However, even this weak mandate would supposedly generate about $50 billion towards subsidies for purchasing insurance for low-income workers.

The exchanges sound like they have some limitations on which employers or consumers can participate in them, which would limit their scope a bit, unfortunately.  And the subsidies in this bill aren't as generous as in the original draft -- they kick in at 400% of FPL instead of 500% as they did before, I think.

Sharp-eyed Orac notes that woo-meister Tom Harkin slipped in some free riders for purverors of snake oil and other alternative practitioners.

I have not seen any clear funding sources outlined as yet.

In terms of the pure politics, this is looking like the most likely to get enacted of the various plans circulating in Congress.  The House's bill is very liberal and has a strong public plan which would pay medicare-like rates. The Senate Finance bill is looking like a fairly conservative and less comprehensive bill. This may be the "compromise" position which finally gets through.  If this is what we wind up with, it's by no means perfect or complete, but it's pretty darn good.

Note:

I have not read the bill itself yet, so this is cobbled together from multiple sources.  Here they are for your edification and education:

Tim Foley Change.org -- probably the most comprehensive summary
Jon Cohn at TNR Here and Here -- he runs the numbers well
Politico
Ezra has more details
Igor at the Wonk Room






9 comments:

doc said...

Until a source of money is found that covers the "only" $1,000,000,000,000 cost, it is just another useless piece of fantasy. And unfortunately, there are only 2 sources of money :
taxes (your and my money)
inflationary printing of money and deficit spending(money from our pockets). So have at your fantasy. As long as the gov't is in it, it will be more expensive, more restrictive, more inefficient than you can even imagine. As one pundit said, Gov't health care...the efficiency of Amtrak and the sensitivity of the IRS.

Nurse K said...

Tell me why you think 100% of companies who offer private insurance (which costs WAY more than $750/employee/year--it's at least that per month for crappy insurance) won't just kick everyone off their insurance plan and tell them to go on public insurance. I'm a hardcore pro-America, pro-freedom capitalist, and I'd totally do that because otherwise I couldn't stay in competition with my competitors whose cost of maintaining an employee were much lower.

The only way that I WOULDN'T do this as a capitalist would be if the govt insurance was so crappy that it didn't cover much, no one took it, or my employees largely wouldn't be eligible (which doesn't appear to be the case for anyone based on income).

It's July 4th...I figure we could fund this by selling the colonies back to England since we'd end up with the NHS (crappy, inefficient, long waits) in a few years anyway.

shadowfax said...

K,

As I implied, the $750 penalty is a pretty weak mandate. I, too, worry that it is inadequate.

The theory, BTW, is that skilled workers with decent jobs that provide value to their employers will still get health care as a benefit because their employers don't want them to go work somewhere else with better benefits. Again, I worry that $750 is not sufficient incentive there, but that's what the actuaries have said (the HELP committee didn't pull that number out of thin air.)

BTW, if you'd been paying attention you'd know that employers dropping health insurance would not result in employees being dumped on public insurance. Those folks would go the the Insurance Exchange "Gateway" (which I think is to be state-run) and they would pick the insurance product there that they liked and that fit their budget. It could be the public option, but it could just as easily be Aetna, BCBS, Unitedhealth, whatever. If consumers have the choice, what's to fear?

Nurse K said...

Well when you can subsidize the public choice with a trillion bucks of taxes, it's PROBABLY going to be cheaper and few people will choose something that is more expensive and of similar quality. Either that, or the private insurers will have to lower their prices so much that maybe they'll end up like the banks eventually...they'll become fiscally unsound.

Speaking of which, actuaries also determined who would be a good or a bad mortgage loan risk for banks, and that seemed to work out okay minus the entire banking and financial system of the civilized world collapsing, so the $750 "actuary" number isn't really convincing at this point.

This plan is just a socialized health insurance plan with an extra step of people having to "choose" something subsidized by a trillion + dollars after their employers kick them off their insurance. Choice is fine as long as their as there is no public plan subsidized by my tax money. I don't really want to subsidize/pay for any more peoples' health insurance, especially those who make a reasonable amount of money.

eRobin said...

I'm worried that the HELP bill does more to keep people out of the public plan than it does to allow it to compete on a level playing field. It may be doomed to fail. The House bill is my preference.

shadowfax said...

K,
"Well when you can subsidize the public choice with a trillion bucks of taxes"

Did you not read the post? The HELP bill is not subsidized; it is self-sustaining via premiums, with start-up costs financed via a loan (as opposed to via a grant of taxpayer money).

Look, if you want to argue against some fantasy bill that does not actually exist, then by all means do so. But just be aware that there is a real proposal moving forward which is not the one you are describing.

eRobin,

Yes, this is a big compromise for the Dems to offer a weak public plan. I actually think this is one of those rare cases where a compromise produced better policy, in that I think a strong public plan would have too drastic an impact on providers.

eRobin said...

The reason I like the House bill is that the public health insurance plan option phases in over three years, which I think cushions the blow. I'm not sure how the public plan per se would hurt providers but I know that everyone ox is going to have to be gored if we're going to get costs down. That's going to be painful but not as painful as we think (I think). And it will happen over something like ten years, during which time, we should be seeing improved outcomes so that should make the whole thing more bearable.

eRobin said...

P.S.

really enjoy your blog.

showed my kids the x-ray of the hand, which had the desired scared-straight effect. the one who is thinking about being a GP was especially loving it.

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