A heavily anticipated health-reform proposal released Sept. 16 by Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, contains many provisions that are consistent with policy established by the American College of Physicians. It also strays from ACP policy on a number of key points.
The committee has begun debate and consideration of amendments to the proposal, which failed to gain the endorsement of its Republican members. In a preliminary estimate, the Congressional Budget Office said that Baucus's bill would cost $774 billion over the next 10 years and would reduce the federal budget deficit by a net $49 billion over the same period, from 2010 through 2019.
Bob Doherty, ACP's senior vice president of governmental affairs and public policy, noted that close to 600 amendments to the legislation have been proposed. "We really don't know what the final bill will look like, and we're scouring those amendments right now," he said.
Under the draft, all U.S. citizens and legal residents, with limited exceptions, would be required to purchase health insurance coverage. Each state would have to establish an "exchange" through which individuals and small groups would be able to obtain insurance.
As an alternative to a "public plan option," the proposal would authorize $6 billion in funding to create nonprofit, "consumer-operated and -oriented plans," or CO-OPs.
To make coverage affordable and ensure uniform benefits, the proposal would establish four benefit levels: bronze, silver, gold and platinum, with bronze being the most basic and least costly. Each plan would be required to offer an array of medical, surgical and diagnostic services, including preventive and primary care.
A separate "catastrophic only" policy is envisioned for adults age 25 and younger.
Insurers serving the individual and small-group markets would be subject to a number of market reforms. Most notably, plans would be prohibited from excluding or rescinding coverage based on pre-existing health conditions. Individual market reforms would take effect in 2013; small-group reforms would be phased in over five years, beginning in 2013.
According to a report by the nonprofit Center on Budget and Policy Priorities, the Baucus plan provides more limited subsidies than either the Senate Health, Education, Labor and Pensions (HELP) Committee plan or House Bill 3200.
Beginning in 2013, individuals and families earning up to 300 percent of the federal poverty level would be eligible for a refundable tax credit when they buy coverage through a state exchange. (In 2009, 300 percent of poverty is $32,490 for an individual or $66,150 for a family of four.)
In 2014, tax credits would also be available to lower-income individuals and families that make between 100 and 133 percent of poverty. People who are Medicaid-eligible and opt to purchase insurance through the exchange would receive a premium subsidy in lieu of Medicaid coverage, according to the center's report.
The credits would be based on the percent of income the premiums represent, rising from 3 percent of income for those at 100 percent of poverty to 13 percent for those at 300 percent of poverty.
"The Baucus plan could leave many people who are eligible for subsidies facing fairly steep insurance premiums and cost-sharing charges that they could have difficulty affording," the report noted. For example, a family of three making $46,000 a year, or about 250 percent of poverty, would have to pay roughly $4,800, or 10.5 percent of its income, to purchase insurance, before any deductibles and co-payments, it said. That same family would pay $2,600 under the HELP bill and $3,700 under the House bill, the center's report added.
In a letter to Baucus, ACP President Dr. Joseph Stubbs said, "We urge you to ensure that the subsidies in the final bill are sufficient to ensure that an individual mandate does not impose an economic hardship on persons who would be required to buy coverage."
In response to concerns raised about affordability, Baucus released a revised bill Sept. 22 that would increase the subsidies and reduce the maximum out-of-pocket expense required of individuals and families.
The Baucus bill also addresses certain payment reform and care-delivery issues.
Beginning in 2011, primary-care physicians would receive a 10 percent bonus under Medicare for office visits and other designated services.
However, though ACP has repeatedly called on Congress to eliminate Medicare's "sustainable growth rate" (SGR) formula, the Baucus plan offers no permanent fix. Rather, it replaces the scheduled 21 percent rate reduction in 2010 with a 0.5 percent increase.
"The legislation just kicks the can down the road in terms of a sustainable growth rate solution," Doherty said.
Other features of the Baucus plan include:
- A provision making Medicare's Physician Quality Reporting Initiative mandatory, with possible penalties for providers who fail to report successfully under the program.
- Non-binding language expressing the Senate's intent that states be encouraged to develop alternatives to the current civil litigation system. (Baucus's committee does not have jurisdiction over medical liability reforms.) Unlike the House version, however, the bill does not provide funding to address medical liability reform.
- A proposal to create a new Medicaid state plan option that would allow enrollees with at least two chronic conditions or one chronic condition and the risk of developing a second to designate a provider as their "health home." ACP believes that all enrollees should be eligible to participate, not just those with chronic conditions.