The Senate Finance Committee released three “policy options” papers, and accepted public comment very briefly. The details, filling more than 150 pages single-spaced, were not conjured up de novo, but owe much to the briefing books of the Clinton Task Force on Health Care Reform.
We’ve seen the no administrative or judicial review feature before. It also fits in well with the concept of a federal health board, modeled on the Federal Reserve, promoted by Tom Daschle and others. This would apply to such critical items as the definition of “quality” and the method for calculating “value-based payments.”
The Health Fed’s “guidelines” would be backed up by enhanced fines—$10,000 per instance of “medically improper or unnecessary care” (AAPS News, June 2009, p 2).
The second paper outlines insurance reforms, including the establishment of Exchanges. One of their functions would be to decertify and remove health benefit plans that didn’t satisfy their criteria. Minimum benefits would be set, and would include mental health and substance abuse services. There would be no lifetime limits on coverage or annual limits on benefits, and no (or only nominal) cost sharing for “preventive” benefits.
The “public health insurance option” would, like Medicare, be administered by private carriers. Under approach #1, a “Medicare-like plan,” Medicare providers would be required to participate and would be paid Medicare rates plus 0-10%.
The “shared responsibility” section discusses the “personal responsibility coverage requirement” (individual mandate). Insurers as well as individuals would be required to report months of qualified health coverage to the Internal Revenue Service. The penalty would be a phased-in excise tax up to 75% of premiums, with exemptions for undocumented aliens, individuals whose lowest-cost option exceeded 10% of income, and some others.
A proposed “pay or play” employer requirement would include an excise tax based on gross receipts.
Because of evidence showing that the elderly are very price sensitive, and that a $10 copayment increase led to a 20% decrease in physician office visits, the plan would eliminate Medicare copayments for certain certified preventive services (and thus increase demand and expenditures).
The plan to reduce “health disparities” would standardize collection of data on ethnicity and primary language, and require more data on treatment of the disabled. Standards for culturally and linguistically appropriate health care services (CLAS) would be extended to private insurers in the Health Insurance Exchange.
Savings and revenue options are discussed in the third policy paper. Certain sectors (such as imaging and home health services) and geographic areas in which spending per beneficiary is above a certain threshold, are targeted for payment cuts. Assets such as automobiles and cash savings would be considered as well as income in determining beneficiary cost sharing or subsidy.
A very lucrative target for funding is the “tax expenditure” (exclusion from tax) of employer-provided benefits. The deductibility of medical expenses exceeding 7.5% of adjusted gross income, health savings accounts, flexible spending arrangements, and health reimbursement arrangements are also being scrutinized. Additional excise taxes, as on sugar-sweetened drinks, are being proposed.
The short summary is: more taxes, more mandates, more controls, more penalties.
A Republican alternative, the Patient’s Choice Act, is proposed by Sen. Tom Coburn, M.D. (R-OK), Sen. Richard Burr (R-NC), Rep. Paul Ryan (R-WI), and Rep. Devin Nunes (R-CA).
The bill would provide a refundable, advanceable tax credit to apply to the purchase of health insurance. It is not a net overall tax increase or decrease; it just redistributes the tax break (as to people who don’t pay income or payroll taxes) and puts an upper limit on it. John Goodman writes that the bill would cut the number of uninsured in half while remaining revenue neutral; in contrast, the Obama plan would require an increase of $1.5 trillion in spending over 15 years for the same reduction in the uninsured. www.john-goodman-blog.com/the-republican-health-plan.
Congressman Ryan has posted frequently asked questions.
Under the Coburn plan, insurance Exchanges would be voluntary—but would require guaranteed issue. Purchase of insurance across state lines would be permitted—through interstate compacts and interstate pooling arrangements. Transparency is promised for both price and quality information, through a public-private partnership—a new bureaucracy called the Healthcare Services Commission.
Viewing the short and long summaries prepared by Sen. Coburn’s office, the intention is to put “health care decisions in the hands of patients.” As to why American medicine fails so many patients, Coburn says, “The answer begins and ends with government intervention.”
The plan does not have a “public plan” or individual or employer mandates. Unfortunately, it does laud the Massachusetts plan, and it includes a number of government interventions, including subsidies, “prioritizing,” defining metrics and benefits, and “realigning incentives.”