The Power of A

Yesterday, the Senate Health Education Labor and Pensions (HELP) Committee passed its health care legislation out of committee in a 13-10 vote.  This is the first comprehensive health care bill to be passed from committee in this Congress.  The major differences between the HELP bill and yesterday’s released House bill include: a role for associations as navigators, a definition of small business using number of employees not payroll, and different penalties for the individual and employer mandates.  ASAE has taken a look at the amended legislation (you can see a summary here) and has prepared this quick guide to the affects of the legislation on associations and individuals:

Businesses (Including Associations)

1.  All businesses must provide health insurance to their employees. Those who fail to cover at least 60% of their full time employees’ (FTEs’) monthly premiums are subject to a $750 annual fine for each uninsured FTE, with the first 25 exempted.

2.  Professional and trade associations, unions, and chambers of commerce can contract with their states to serve as “navigators” for the Affordable Health Benefits Gateway (see description under Individual). Associations and other groups would receive federal funding through the states to educate members and the public on how to receive insurance through the Gateway.

3.  The bill raises the federal limit for the amount an employer can reward employees for participating in wellness programs from a 20% premium discount to 30%.

Small Businesses

1.  All employers with fewer than 25 employees are exempt from the employer mandate and are eligible for the program credits described below.

2.  Beginning in 2010, businesses with 50 or fewer FTEs that pay 60% or more of their employees’ premiums would be eligible to receive a tax credit for three consecutive years. The size of the credit would be based on number of employees, types of coverage, and amount of time the employer paid over 60% of the premiums.

Individuals

1.  The bill mandates that everyone have insurance coverage or pay a $750 per year fee.

2.  The bill allows individual states to create Affordable Health Benefits Gateways. These would be insurance exchange mechanisms that individuals and qualified employers can find the right plan for them. If a state fails to establish a Gateway the Department of Health and Human Services can create a Gateway in that state. Gateways can be regional and state-specific.

3.  Low- and moderate-income individuals and families would receive credits to help with purchasing insurance through the Gateway. The credits would be on a sliding scale of up to 400% of the federal poverty level.

4.  The self-employed who do not receive a Gateway-insurance credit are eligible to receive the small business credit for employers with 50 or fewer FTEs.

5.  Individuals would have the option of keeping their current health care plan, shopping for a health care plan outside of an exchange, or shopping for a health care plan within the Gateway in the person’s state. The Gateway would include private and public options.

6.  The age for a dependent to stay on a health insurance plan is increased to 26 years of age.

In addition, details of the soon-to-be-released Senate Finance Committee bill have slowly been released (subscription).  According to reports, the committee bill will not have a public plan, but will instead include language authorizing the creation of health care co-operatives as an alternative to traditional private insurance plans.  In addition, the bill would be paid for in part by a windfall tax on private insurance companies; this idea gained public support from two additional key Senators yesterday.  ASAE will prepare a summary of the Finance Committee bill when it is released, so keep The Power of A bookmarked for the latest information.

Quick Hits

The committee hearing schedule for the House Education & Labor, Energy & Commerce, and Ways & Means Committees… House Republican Leader Boehner’s office releases a chart describing the House bill… the American Medical Association continues its debate internally (subscription) on the public plan… Will the Blue Dogs go along quietly with the Democratic leadership on the House bill?

Update - A link to the just released House bill can be found here, and a summary of the legislation here.  The committee also has guidance documents for employers, on the public plan, and other aspects at the Education & Labor committee website.  Check back for ASAE’s summary of the legislation for associations.

Original Post - A ticking clock may be the best image to describe yesterday’s developments in health care in both chambers.

House Democratic leaders are expected to unveil their comprehensive health care legislation today.  The legislation was supposed to be unveiled last week but protests from the Blue Dog caucus and over how to pay for the legislation derailed the timeline temporarily.  ASAE will post an analysis of the legislation on the Power of A, specifically looking at if it addresses Blue Dog concerns over small business costs and how the bill raises revenue.  According to Congress Daily (subscription), the Blue Dogs and House Democratic leader have already failed to compromise on an employer mandate for small business, with leadership setting an exemption for companies with payroll under $250,000, which Blue Dog leadership feels excludes too many small businesses.

On the Senate side, Senate Finance Chair Max Baucus has told his committee that their health care bill’s unveiling will be Thursday (subscription), according to ranking member Charles Grassley (R-IA).  While Baucus publicly has denied this timeline, he has come under increased pressure from the White House and Democratic leadership to release his committee’s bill.  Yesterday, White House officials held a conference with Baucus, Ways & Means Chair Charlie Rangel (D-NY), Senate Majority Leader Harry Reid (D-NV), and Speaker Nancy Pelosi (D-CA) to coordinate their efforts on health care reform.  According to the Associated Press, the president told Baucus directly that he wanted a bill publicly announced by the committee before the end of the week.  When it is released, ASAE will post a summary on this site.

Quick Hits

Congressional Republicans hone talking points on potential health care legislation… HELP Committee approves amendment for 12-year exclusivity window before generic versions of biologic drugs can be marketed… Senator Grassley is profiled by Wall Street Journal and targeted by Health Care for America… Insurance associations hold health care “fly-in”.

Six associations have been selected by ASAE & The Center for Association Leadership’s Associations Advance America (AAA) Committee to receive the 2009 Summit Award - ASAE’s highest honor for associations that implement innovative community-based programs.

Part of the AAA Awards Program, the Summit Award symbolizes the very best efforts designed by associations across the country in areas like public education/information, economic development, business and social innovation, skills training/development and civic and volunteer activities. The six Summit Award Recipients for 2009 were selected from a field of 38 Award of Excellence winners from two earlier AAA judging rounds this year.

This year’s winners are:

American Academy of Ophthalmology
EyeCare America (ECA) Seniors EyeCare Program
Oakland, CA

Independent Insurance Agents of New Mexico
SafeTeen New Mexico
Albuquerque, NM

Iowa Dental Association
Iowa Mission of Mercy
Des Moines, IA

Massachusetts League of Community Health Centers
Massachusetts Community Health Center Primary Care Provider Loan Repayment Program
Boston, MA

School Nutrition Association
Vote for School Lunch 2008 - Presidential Edition
Alexandria, VA

Women’s Basketball Coaches Association
WBCA Pink Zone
Lilburn, GA

The Summit Award winners will be recognized at the annual ASAE Summit Awards Dinner, taking place September 29, 2009.  For more information about the Summit Awards Dinner, contact ASAE at 202.626.2703 or publicpolicy@asaenet.org.

Quick Hits

The healthcare timetable is no more, according to Senator Reid… The Senate Finance Committee tries to find a way to pay for its health care reform bill… HELP Committee debates amendments (subscription) to its public plan and employer mandates… Majority Leader Reid clarifies his comments from yesterday to key Senate Republicans… Health care reform from the perspective of one state’s small business community.

1.  The Congressional Budget Office (CBO) scores a modified Health Education Labor and Pension (HELP) Committee health care proposal at $611.4 billion, but the bill would still leave 34 million Americans without insurance.

2.  The plan includes a public option and an employer mandate with a $750-per-employee penalty for the uninsured.

3.  Read the Kennedy/Dodd letter to the committee here.

4.  Senator Charles Schumer (D-NY) continues to modify his public plan proposal.

5.  American Medical Association supports “an American Model” of public and private insurance companies.

6.  President Obama held a health care roundtable in Annandale, Virginia yesterday to promote reform legislation.

In an interview with the Associated Press, Maine Senator Olympia Snowe (R-ME) outlined her support for a public plan with a trigger option as a possible compromise to the stalemate over inclusion of a public plan in comprehensive health care reform.

The trigger option would mean a government-run insurance company would only come into existence if private insurance companies failed to enact specified reforms. Senator Snowe stated her opposition to a public plan that is immediately created, saying: “If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market … the public option will have significant price advantages”

However, in the interview she expressed a desire to reform the insurance market. “I don’t think we can entirely depend on the private insurance market to deliver. They haven’t delivered thus far, and that’s why we’re in the predicament we’re in today,” she said.

Also this morning, Politico obtained a Senate Health Education Labor and Pension (HELP) Committee document outlining its proposal for a public plan in its legislation. The proposal would be a weaker version of the House version of the public plan, but more government-oriented than the co-op proposal. Details of the “Community Health Insurance Option” can be found here, but highlights include:

- The public plan would be an offering to the bill’s insurance exchange, and would follow the same rules as private insurers except the federal government would set reserve requirements.

- For the first three months, the government (specifically HHS) would pay the plan’s claims. This would be considered a loan to be repaid by the plan.

- The payment rates paid by the public plan would be no more than the local average of private rates, but could be less.

- There is no requirement that a health care provider participate in the plan.

Quick Hits

White House Press Secretary Robert Gibbs gives a non-committal answer (subscription) to whether the president is open to taxing employer-provided health care… the Small Business Coalition for Affordable Healthcare releases its first YouTube video… a list of other groups advertising (subscription) over the Congressional recess.

The “employer mandate” issue is one of the most controversial aspects of comprehensive health care reform, and yesterday the Senate Health Education Labor and Pension (HELP) Committee released two proposals that it sent to the Congressional Budget Office (CBO) for cost scoring.

The proposal (which can be seen here) has two options.  The first would require employers to pay a flat amount for each employee that is not covered under the employer’s plan at an adequate level.  The fee would help offset the cost of credits for insurance provided through the bill’s health insurance exchange.  The second targets employers that can afford to provide coverage but chose not to do so.  The concept would be the federal government recouping the cost of providing Medicaid coverage for eligible employees.  Both plans would exempt “small business,” which is currently undefined.

Noticeably absent is a proposal that would tax a percentage of a company’s payroll, or the “pay or play model”.  The Bureau of National Affairs (BNA) quotes a Democratic aide as saying that while the pay or play proposal was sent to the CBO for scoring, it is no longer considered a viable option.

On the House side, the Energy and Commerce Committee will hold another hearing on the “Tri-Committee” comprehensive health care bill.  Associations testifying before the committee include America’s Health Insurance Plans, American Academy of Family Physicians, American College of Cardiology, American Health Care Association, American Nurses Association, Medical Association of Georgia, National Association of Community Health Centers, and National Association of Health Underwriters.

Quick Hits

Baucus proposes a scaled-back version (subscription) of the plan to limit charitable deduction… The Obama family will join five nonprofits today at Fort McNair as part of their United We Serve effort… The President held his health care town hall last night… Members of Congress invoke their own health care stories to color their position on the debate… Controversy over a Senate Commerce Committee report on insurers’ charges for out-of-network treatments.

Over the past 24 hours, a series of events has moved the question of how to pay for health care reform to the forefront of the debate.  The following timeline shows how this issue has become the biggest roadblock to comprehensive health care reform:

•   On June 15, the Congressional Budget Office (CBO) sent a letter to Senator Kennedy (D-MA) and the Health Education Labor and Pensions (HELP) Committee scoring their draft proposal as costing $1 trillion over 10 years but only covering an additional 16 million Americans.  This plan lacked firm language on a public plan or an employer mandate
•   On June 16, CBO also released a score of an unreleased Senate Finance Committee proposal, placing its cost at $1.5 trillion over ten years.  Committee Chair Max Baucus (D-MT) responded that the scored proposal was two weeks old.
•   CBO also told the committee that the president’s plans for expanding health coverage would add to the nation’s federal debt without offsets.  The letter states “without meaningful reforms, the substantial costs of many current proposals to expand federal subsidies for health insurance would be much more likely to worsen the long-run budget outlook than to improve it.”

With these updates, the Democratic leadership has been exploring new ways to pay for their health care plans.  CongressDaily obtained a document circulated by Ways and Means Committee Democrats with a series of proposals to pay for their legislation.  In addition to listing removing the tax-exemption for employers and increasing the tax on soda and alcohol, the document lists the following new ideas as “pay-fors”:

- Reducing deductions taken by pharmaceutical companies for prescription drug advertising expenses
- A 2 percent surtax on individuals earning more than $200,000 and households with $250,000 or more in adjusted gross income
- A 0.375% increase in the Medicare tax on both employers and employees, which will be controversial with small businesses
- Valued-Added Tax (VAT) on goods and services similar to a tax imposed by most European countries.

Interestingly, the limit on charitable tax deductions proposed by the president is not in the document, likely due to the resistance from members of the caucus.

Quick Hits

CBO Director says health care reform is a “hard slog” in USA Today… House Energy and Commerce Committee will release health care bill Thursday or Friday and “it will include some numbers”… The House Republican task force on health care releases its health care outline (details from ASAE to come)… Former U.S. Senate majority leaders Howard Baker, Tom Daschle, and Bob Dole release their bipartisan health care reform plan.

On Tuesday afternoon, the Senate Health, Education Labor and Pension (HELP) Committee Democrats as well as their House counterparts released the details and language for their respective health care bills.

The HELP Committee bill details began to leak last week but yesterday’s release was the most detailed information to date. The bill avoids three major issues: details on a public insurance plan, requirements for employers to pay for employee premiums, and proposals on generic biologics. However, the outline of the bill contains a variety of options on the controversial points, meant to stimulate discussion on the most contentious aspects of the bill. In addition to the details discussed in the June 8^th post, the legislation includes:

• The creation of navigators, or associations and membership organizations that assist individuals and businesses in the use of the Gateways. This is similar to language used in the SHOP Act. (Title I, Subtitle B)
• Limitations on health status ratings within a geographic region based only on family composition, the value of the benefits package, and age (no more than 2:1). (Title I, Subtitle A)
• The creation of Affordable Health Benefit Gateways in each state, or insurance exchanges at the state level. If a state fails to establish a Gateway, the Secretary of Health and Human Services is required to create an exchange in that state. States can form regional Gateways in multiple states. (Title 1, Subtitle B)
• Expansion of Medicaid eligibility based on the recommendations of the Senate Finance Committee. (Title I, Subtitle B)
• Tax credits for small business under 25 or fewer employees, and whose average wages are under $40,000 per year. (Title I, Subtitle C)
• A variety of wellness encouragement programs, such as requiring some restaurants to post caloric count of foods and expansion of loan forgiveness programs for medical specialists. (Title III)

The Chairs of the three relevant House committees outlined the basics of their reform legislation in a message to House Democrats and announced the bill would be named for Rep. John Dingell (D-MI). The bill would include many aspects of the HELP bill and includes a “pay or play” employer mandate and a public insurance plan. The outline lacked any details on completely financing the reforms. Energy & Commerce Committee Chairman Henry Waxman (D-CA) reiterated in his comments their goal of having the bill on the floor by July.

Quick Hits

The Joint Committee on Taxation sends a letter to the Senate Finance Committee outlining potential savings based on some suggested health care proposals… Tri-Caucus (the Congressional Black, Hispanic, and Asian Pacific American Caucuses) unveils its list via legislation of required health care components… Ezra Klein breaks down the various types of public plan… The Obama Administration PAYGO plan and health care.

Late Friday the staff for the Senate Health, Education, Labor and Pensions (HELP) Committee released their draft language and principles for their health care reform legislation. The language had been hinted in previous weeks, so there were few surprises.

The bill includes:
• A mandate for individuals to purchase insurance as well as a mandate for employers to provide insurance for employees.
• A provision that employers who did not provide a minimum amount of (undefined) coverage for their employees would have to make a payment on behalf of the employees (“pay or play”).
• The creation of a public plan to compete with private insurers.
• Language prohibiting insurers from using “preexisting conditions” in determining coverage and prohibiting insurance rating by gender or claims history.
• The creation of an “American Health Benefits Gateway”, a health insurance exchange run by states to show insurance options available for individuals and employers.
• Extension of Medicaid eligibility to those up to 150% of the federal poverty level.
• A tax credit (not defined) for small employers that pay a certain percentage of the employee’s health care premiums.
• An extension of family coverage to individuals up to 26 years of age (most insurers drop family coverage currently between the ages of 18 and 22).
The draft language contains many “liberal” proposals, and the reaction from business and insurance groups is understandably concerned. In addition, this weekend the President has stepped up his advocacy in favor of expansive health care reform, focusing his weekly radio/internet addresson health care.

While it is doubtful this exact legislative language would be passed into law, the Kennedy bill is trying to set the extreme for reform on which to allow negotiations to be based. For nonprofits, some of the areas of interest in this draft are:
• How will a “pay-to-play” mandate affect their HR benefits? If all employers are required to provide insurance (and there is no exemption for small business), how will this affect their benefits packages to employees?
• How will employers participate in state exchange programs (the American Health Benefits Gateway)?
• If there is an individual mandate, how will employees going outside of their employer for health insurance affect the employer’s insurance plan?
• What is the tax credit and requirements for small businesses?
ASAE will continue to look at the draft language and issues surrounding it, and use this area to provide regular updates for members.
Quick Hits
The House Energy and Commerce Committee also released some details of its health care bill on Friday… The Roll Call health care reform insert(subscription) comes out today, and is full of opinions on reform. ASAE member Nancy Brown of the American Heart Association is a contributor to the issue… The New York Times compares the state insurance exchange with proposed national exchanges… The Congressional Black Caucus writes a letter to the president endorsing the public option… The video of CNBC’s interview with Senators Baucus (D-MT) and Grassley (R-IA).