The Power of A

Last night the President spoke before a joint session of Congress, outlining his goals for comprehensive health care reform and spurring Congress to act and give him a bill to sign before the end of the year.

The speech (seen here) urged Congress to act this year and not delay in offering him legislation to sign, even invoking the efforts of the late-Senator Edward Kennedy (D-MA) to pass comprehensive reform.  The president also addressed some of the topics that had been debated in the August town hall meetings, including end-of-life counseling and illegal immigration, and offered Republicans the opportunity to work with the administration on the reform efforts.  However, he also stated his administration would not accept delays and would “call out” anyone who attempted to intentionally distort his legislation.

You can view analysis and in-depth summaries of the speech itself from Politico, The Washington Post, and The Wall Street Journal, but the president did give some specifics on what a bill he supports would contain.  They include:

-          A price tag around $900 billion that would not add to the deficit in the near- or long-term.

-          An alternative insurance offering to the currently uninsured that would compete with private insurance companies.  This plan could be a government-run public option or government supported cooperatives, but it would only be open to the uninsured and would be nonprofit.

-          Elimination of exclusions for preexisting conditions and a cap on out-of-pocket medical expenses for individuals.  Insurance companies would also be prohibited from dropping individual coverage except in cases of fraud.

-          An individual mandate to have insurance or pay a penalty.

-          State-based testing of medical malpractice reforms, borrowed from the previous administration.

-          Tax credits to small businesses to provide help provide insurance to employees.

-          Creation of a national “high risk” pool for individuals with preexisting conditions that would cover the gap between passage of the health care bill and implementation.

-          Creation of insurance Exchanges that allows low-income individuals and small businesses to “shop” for affordable insurance plans.

What are your thoughts on the president’s speech?

Quick Hits

The text of the Republican response to the speech by Rep. Charles Boustany (R-LA)… The text of the letter sent by Senator Kennedy to the President referenced in the speech… Senate Finance Chair Max Baucus sets the first health care bill hearing the week of September 21… The American Clinical Laboratory Association and medical laboratories meet with (subscription) Senate Finance staff on the new fee targeting them in the health care bill.

Yesterday, the House Democratic leadership unveiled their comprehensive healthcare legislation.  The legislation has a few changes from the discussion draft circulated last month (you can see the changes here) but the major ones include a new surtax on high-income families and a sliding scale penalty for small businesses that do not offer health insurance coverage.  To help associations make sense of the provisions, ASAE below has outlined below what the bill could mean for associations and their employees:

Businesses (Including Associations)

1. Businesses would be required to provide a minimal level of coverage for employees or pay a penalty of 8% of their payroll. The minimum level of coverage is specified in the bill and can be further specified by the Health Benefits Advisory Committee.

2. Employers would be required to contribute 72.5% of the cost of premiums for FTEs’ coverage and 65% of family plans.

3. Five years after the bill is passed, all businesses would be required to meet the minimum coverage standards required of those in the Exchange. Also, employers could no longer place annual or lifetime caps on plans.

4. Employers that offer health insurance must provide a process to automatically enroll employees into their health plan with the lowest premium. Those same employees are eligible to opt-out of the plan.

Small Business

1. Small businesses, based on size, are eligible to participate in the Health Insurance Exchange to find insurance for employees. Companies with ten or fewer employees can participate in the first year, and it expands to 20 or fewer employees in the second year. After the second year, participation can be extended to additional businesses. Businesses that participate in the Exchange have their plans for employees managed by the Exchange.

2. All businesses with payroll under $250,000 are exempt from the employer mandate. Businesses with payroll between $250,000 and $400,000 that do not provide insurance would pay a modified fee based on their payroll size (2% for $250k-$300k; 4% for $300k-$350k; and 6% for $350k-$400k).

3. A tax credit is provided to small businesses that offer health insurance.

Individuals

1. Individuals not covered by their employers may participate in the Health Insurance Exchange to find coverage fitting themselves or their family, either through private insurance or a public insurance plan.

2. “Affordability credits” would be available for individuals and families up to 400% of the federal poverty level ($43,000 for individuals and $88,000 for families) on a sliding scale. The credits would be administered through the Exchange. Families and individuals at or below 133% of the federal poverty level are eligible to be covered by Medicaid.

3. The bill imposes an individual mandate; the penalty for failure to have coverage would be 2.5% of the person’s modified AGI but would not exceed the average cost of a health care policy in the Exchange.

4. If an employee’s insurance costs their employer more than 11% of that employee’s AGI, that employee can leave the employer plan and enter the Exchange.

5. Families whose income exceeds $350,000 (or individuals whose income exceeds $280,000 annually) would pay a surtax to finance the reform. Families earning between $350,000 and $500,000 would pay a 1% surtax; those earning between $500,000 and $1,000,000 would pay a 1.5% surtax. Those families earning above $1,000,000 annually would pay a 5.4% surtax. The surtax numbers could increase if the anticipated healthcare revenue does not meet the expected level.

Does the House proposal positively or negatively affect associations?

Quick Hits

HELP Committee passes its version of the healthcare bill… The Blue Dog coalition is not entirely pleased with the House bill, but the Progressive Caucus is… The Wall Street Journal analyzes on how the bill would affect small businesses… House Republicans prepare to release their own healthcare overhaul language… Is the Senate Finance Committee considering stricter reporting on corporations’ 1099 forms to pay for their legislation? (subscription)… Or are they considering a windfall profit tax on private insurers?… President Obama will speak on healthcare in the Rose Garden today with the American Nurses Association.

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”.

As the certainty of a comprehensive health care bill is being questioned by Congress and the media (subscription), the Obama Administration has become increasingly active in pushing Congress to pass legislation this year.

Today, Health and Human Services Secretary Kathleen Sebelius will testify before the House Energy and Commerce Committee, urging Congress to send President Obama health care legislation that does not increase the federal deficit.  The President himself will address the issue head-on by holding a televised town-hall meeting tonight at 10 PM.  On Tuesday Dr. Christine Roemer, Chair of the Council of Economic Advisors, testified before the House Education and Labor Committee on the economic benefits of comprehensive reform.  And last night, Politico reported that White House Chief of Staff Rahm Emanuel and Sebelius met privately with Finance Committee Chairman Max Baucus (D-MT) to discuss health care reform.

On Capitol Hill, both chambers are mired in the details of their separate health care proposals.  The Senate Finance Committee has begun trimming the cost of their bill to bring the total cost under $1 trillion, primarily by scaling back the subsidies to assist people with purchasing health care.  The three House committees of jurisdiction are all holding hearings this week on the “Tri-Com” health care bill.  A wide variety of associations are participating in the hearings, including the American Benefits Council, AARP, U.S. Chamber of Commerce, American Academy of Family Physicians, American Nurses Associations, Federation of American Hospitals, American Association of Homes and Services for the Aging, and American Medical Association.

Quick Hits

ASAE chart on the three Democratic health care proposals….  Hospital associations working with Congress to reduce health care costs (subscription)… Many DC-area nonprofits have low budget reserves… Washington Post-ABC poll on health care finds mixed views on comprehensive reform

According to ASAE’s Policies and Procedures in Association Management, the median association has 10 full time employees, meaning a majority of associations are also categorized as small businesses. Today’s New York Times article on the lack of discussion on health care reform for small business should be uncomfortable for these associations.

According to the article, about half of the nation’s uninsured work for a small business or are self-employed but the major insurance companies lack proposals to address increased coverage for this market. The article suggests that the lucrative nature of providing insurance for the small business market makes insurers hesitant to propose reforms. “These markets generally work,” said Bradley Fluegel of WellPoint in the article. “They are well regulated by states today.”

Michelle Dimarob, manager of legislative affairs for the National Federation of Independent Business (NFIB), disagrees: “If you truly want to build off the strength of the employer-based system and want comprehensive health reform and access to quality affordable health care, why would you only fix the individual market?”

Associations in 2008 faced on average an 11% increase in health care premiums, according to the ASAE Compensation and Benefits Study, so the problems in the small business market hit associations along with for-profit businesses. ASAE is on-board supporting The Small Business CHOICE Act (and the SHOP Act) to help alleviate these problems, but will these proposals get to the heart of the problem? Can allowing small businesses to create insurance pools (in the primary care or catastrophic markets) help alleviate the yearly double-digit premium increases?

Quick Hits

The Obama Administration hints it will not oppose removing the employer tax-exemption on health insurance plans to pay for reform……but it looks like it will leave it to outside groups to push for a “public plan” insurance company……..President indicates affection for MedPAC reform, or creation of a health care federal oversight board……HELP committee bill will include individual mandate and likely public option, according to Sen. Bingaman (D-NM).