Thanks to Ezra Klein at the American Prospect, he caught wind of this draft health care proposal which was just released yesterday from the Senate Committee on Finance. Ezra Klein said that the public option was discussed on page 13, so I went there first, of course. Here it is below the jump:
SECTION III: Public Health Insurance Option
Current Law
There is currently no federal public health insurance option for non-disabled individuals under 65 years of age. Medicare, however, is an example of a federal public health insurance option for the aged and certain disabled individuals. Under Medicare, Congress and the Centers for Medicare and Medicaid Services (CMS) in the Department of Health and Human Services (HHS) determine many parameters of the program including eligibility rules, financing (including determination of payroll taxes, and premiums), required benefits, payments to health care providers, and cost sharing amounts. Despite the public nature of this program, CMS subcontracts with private companies to carry out much of the administration of the program.
Proposed Option A
There are several major issues that must be resolved in detailing a public health insurance option. The first issue is how providers will be reimbursed for services they provide to enrollees of the public option. The second is whether or not the public option will be required to establish provider networks or can it compel providers to participate. The third is whether the public option will be required to have reserve funds to cover their incurred but not reported claims. The fourth is whether or not the premiums collected by the public option will be required to cover costs or can shortfalls will be subsidized by the federal treasury. Finally, there is the issue of administration of the public option and whether it will be done by a federal agency or by a third party. Three separate options for a public health insurance plan are described below.
Approach 1: Medicare-Like Plan
This proposal would establish a "Medicare-like" public health insurance option to be offered through the Exchange. The public option would be administered by a new agency within the Department of Health and Human Services (HHS). Eligibility rules, markets, and income-related tax credits for the public option would mirror those for all other plans offered through the Exchange. Medicare providers would be required to participate in the public option, and would be paid Medicare rates plus 0-10%. Rating rules would apply to the public option in the same way that they apply to plans offered through the Exchange in the non-group and small group markets. (Rating rules restrict the variation in price of insurance policies according to the risk of the person or group seeking coverage and are explained in the section on non-group market rating rules and risk adjustment.)
Risk adjustment would apply to the public option in the same way that it applies to plans offered through the Exchange in the non-group and small group markets. (Risk adjustment is an adjustment in the payment for an insurance policy which reflects the expected variation in expenditures of sicker or healthier individuals. See the section on non-group market rating rules and risk adjustment.) The public option would incorporate any medical delivery system reforms adopted from the overall reform effort. The public option would not have solvency requirements. The public option would start and accept enrollees on the same date that the Exchange begins.
Approach 2: Third Party Administrator <--this is the so-called Schumer public-option compromise.</p>
Proposal 2 would be similar to Proposal 1 with the following differences. First, instead of being operated by HHS, the public option would be administered through multiple regional third-party administrators (TPAs) who would be required to report to the Secretary. This governance structure will be separate from the agency overseeing competition among other private plan options. Second, the TPAs would be required to establish networks of participating medical providers. Payments for participating providers would be negotiated by the TPAs. Lastly, the public health insurance option would be required to have reserve funds.
Approach 3: State-Run Public Option
Proposal 3 envisions a State-run public option. This option could either be mandatory or optional for States but the details of its administration will be left to the States. One possible option for the States might be to allow individuals to purchase coverage through the State employee plans.
Proposed Option B
Option B does not include a public health insurance option and instead relies on private options in a reformed and well regulated private market.
There's more of the proposal on regulating private insurance plans in statewide markets, and they're drawing upon much of the health insurance reforms in Massachussetts in this draft proposal, for instance the establishment of a Health Insurance Exchange upon the Massachussetts Connector. Here's more from the white paper on this:
All health insurance plans in the non-group and small group market would be required, at a minimum, to provide a broad range of medical benefits, including but not limited to, preventive and primary care, emergency services, hospitalization, physician services, outpatient services, day surgery and related anesthesia, diagnostic imaging and screenings, including x-rays, maternity and newborn care, medical/surgical care, prescription drugs, radiation and chemotherapy, and mental health and substance abuse services, which at least meet minimum standards set by federal and state laws. In addition, plans could not include lifetime limits on coverage or annual limits on any benefits and cannot charge cost-sharing (e.g., deductibles, copayments) for preventive care services. Another option would be to allow plans to charge nominal cost-sharing for prevention services.
All insurers would be required to offer all four of the following benefit options:
• High option would have an actuarial value (defined as the percentage of health care
expenses paid by the plan) of 93 percent;
• Medium option would have an actuarial value of 87 percent;2
• Low option would have an actuarial value of 82 percent.
• Lowest option would have an actuarial value of 76 percent.
Each plan design would be required to apply parity for cost-sharing for treatment of conditions within each of the following categories of benefits: (1) inpatient hospital, (2) outpatient hospital, (3) physician services, and (4) other items and services, including mental health services. Each plan design would also be required to meet the class and category of drug coverage requirements specified in Medicare Part D. Generally, Part D plans must offer two drugs in each class or category. The Secretary could allow some flexibility in plan design to encourage widely agreed upon cost and quality effective services but could discourage plan designs that could lead to
adverse selection.
Participating insurers in the Exchange would be required to charge the same price for the same products in the entire service area as defined by the state regardless of how an individual purchases the policy (i.e., whether the policy is purchased from the exchange, from a broker or directly from the insurance carrier).
There's a proposed tax credit for low-income tax payers who purchase health insurance through the proposed Health Exchange.
The proposal would provide a tax credit for low income taxpayers who purchase health insurance through the Exchange. The tax credit would be refundable and paid in advance. The tax credit would be in the form of a "premium subsidy" that would help offset the cost of purchasing health insurance. The tax credit would be available for individuals (single or joint filers) with modified adjusted gross income ("MAGI") between 100 and 400 percent of the federal poverty level (FPL).
The level of coverage subsidized would depend on the individual's MAGI. The individual would be required to pay a premium capped at a specified percentage of MAGI that increases as the individual’s MAGI increases. The tax credit is available to individuals between 100 and 400 percent of FPL. The subsidized coverage would be divided into three levels: high benefit option for individuals with MAGI between 100 and 200 percent of the FPL; medium benefit option for individuals with MAGI between 200 and 300 percent of the FPL, and low benefit option for individuals with MAGI between 300 and 400 percent of the FPL.
The subsidized coverage would be tied to the premium for the second lowest cost option in the individual's area for the level of coverage subsidized. Individuals would be able to buy a higher level of coverage but they would pay the full difference in the premium. As an individual's MAGI increases, the tax credit phases out on a linear scale.
Another option might be that the premium credit would be an amount calculated based on the enrollment-weighted average premium of the qualified low coverage option offered in the service area to be determined by the Secretary of Health and Human Services. In addition, there would be cost sharing assistance to limit the amount of cost-sharing an individual is required to pay up to the valuation of the high coverage option for those between 100 and 200 percent of FPL and the medium coverage policy for those between 200 and 300 percent of poverty. The tax credit would be effective for months of coverage beginning on or after January 1, 2013 (or sooner if possible).
There's also a lot more in this proposal here, so click away, kossacks, and let me know what you think below!
Also, if you think this deserves a wider read by everyone here at Dailykos, please feel free to recommend this diary. Thank you!
Don't forget to call Senator Baucus at (202) 224-2651 to let him know that you WANT a Medicare-like public option in his proposal!
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