Senator Edward Kennedy's health committee released a health care reform plan that offers a government-run insurance program option, with an annual fee on companies with more than 25 employees that don’t provide health coverage.
William Chirolas -- World News Trust
June 2, 2009 -- Senator Edward Kennedy's health committee released a health care reform plan that offers a government-run insurance program option, with an annual fee on companies with more than 25 employees that don’t provide health coverage of $750 per employee ($375 for part-time workers). The plan would cost only $611.4 billion over 10 years and cover an estimated 97 percent of all Americans, according to the Congressional Budget Office.
Kennedy, a Massachusetts Democrat, and Senator Chris Dodd, a Connecticut Democrat, said in a letter to committee members, "Like the president and a strong majority of Americans, we believe that a strong public option is an important component of any health reform bill that keeps costs down, expands coverage and offers American families a wide variety of affordable options."
CBO's prior estimate that 15 million who had coverage through their employer would lose coverage is now only 150,000 because of the employer mandate.
The government's costs would be covered by a combination of higher taxes and cuts in projected Medicare and Medicaid spending through negotiation of rates and premiums. Subsidies for low-income individuals and families are the same for the public plan and private insurance companies. The employer fee is forecast to generate $52 billion over 10 years, helping the funding of the subsidies to those who cannot afford insurance, while also discouraging employers from dropping existing benefit plans.
It appears getting to 60 votes in the Senate may have put some backbone into Democrats.
The Senate Help Committee revised plan is weaker than the Tri-Committee House draft bill, but is still a good bill.
The House bill has a public option for all Americans, with subsidies available, in some amount, up to 400 percent of the poverty level, and with both caps on out-of-pocket expenses and no deductibles or co-pays for preventative care, while ending pre-existing conditions underwriting and requiring employers to pay 72 percent of premium costs for all full-time employees, and 65 percent of the costs for a family policy.
The Senate Help Committee bill public option is a "Community Health Insurance Option" run by the Department of Health and Human Services, established with a loan, to be repaid, to the plan to pay the first three months claims as the first three months revenue was used to capitalize it, using the same excessive loss protections in Medicare Part D, with premiums to be set to be sufficient without any further cost to the government, as the plan would be required to follow the same rules as private plans in benefit definition, consumer protection, and in basing premiums on local costs.
Its cost-containment features include the same type of large purchase negotiation power that has been used by large corporations to hold down costs, with a ceiling of paying no more than average local rates. BUT it's only available to the uninsured and to those in small businesses with 50 or fewer employees, and to those whose plan costs more than 12.5 percent of their annual salary.
The large purchase negotiation power is limited as it can not use use Medicare bargaining rates, and unlike under Medicare, medical providers aren't required to participate and could refuse to accept the public option payment. And finally, the House's 72 percent of premiums to be paid by employers becomes only 60 percent. I would like the no deductibles or co-pays for preventative care of the House Bill to be become law, if we are not able to end the current fee-for-service model and go to a model that pays on capitation and quality of care.
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William Chirolas brings 40 years of real-world business experience in local, state, national, and international tax, pensions, and finance to the world of blogging. A graduate of MIT, he calls the Boston area home, except when visiting kids and grandkids.