| Early in the morning on Christmas Eve, the Senate passed H.R. 3590, known as the Patient Protection and Affordable Care Act of 2009. When Congress returns in the new year, a conference committee will attempt to reconcile differences between the Senate version and the version that passed the House in November.
One positive change in the version approved by the Senate is the indexing of a new $2,500 limit on health flexible spending accounts cap for inflation (an earlier version of the bill did not include indexing). Some of the key issues to be resolved during the conference discussions include the role of the states in the new exchanges that are being created, the structure of the exchanges, and the financing of the measure, in addition to the more high-profile issues of a government-run public plan and federal funding of abortion services. |
| Other important provisions in the bill include:
• A minimum loss ratio requirement (MLR) that applies to all fully insured plans including grandfathered plans as of January 1, 2011, which may negatively impact coverage choice and affordability, especially during the transition time prior to 2014 when insurers will have all of the same expenses they have today, plus transition expenses. The MLR in this bill is now set 85% for large-group plans and 80% for individual and small-group plans (100 and below). • New annual health insurance premium taxes of over $6 billion per year to be enforced on 2010 contracts that have already been priced and sold. In 2011, consumers will probably be hit with taxes for two years at one time. • An individual mandate requirement that will make it more financially advantageous for many healthy Americans to forgo coverage until they are sick and then utilize the guaranteed-issue protections to obtain coverage. • Strict modified community premium rating requirements (including age bands of 3:1) that will apply to all fully insured plans under the latest version of the bill. This means all fully insured groups are required to abide by the modified community rating provisions, regardless of their size. • The exchange structure proposed in the bill gives much authority to the secretary of Health and Human Services and may make the exchanges complex for consumers and costly to for states administer. • New employee voucher provisions to allow choice between employer coverage and the exchange, but which could actually hurt participation in employer-based health insurance plans. These provisions will require employers to give vouchers to use in the individual market or exchange to certain lower-income employees who would normally be ineligible to purchase subsidized coverage through the exchange instead of participating in the employer-provided plan. • An expansion of the federal Medicaid program to individuals up to 133% of the Federal Poverty Level. This will be financially crippling in the long run to our already struggling state governments, may displace millions of Americans from private coverage and further exacerbating the public program cost-shift to privately insured Americans. • The creation of a new federal long-term care program that threatens the private long-term care insurance market and is inadequately financed. • Proposed cuts in funding the Medicare Advantage program. |
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