LegiStorm

Summary:

This report summarizes key provisions affecting private health insurance in H.R. 3200, America's Affordable Health Choices Act of 2009, as ordered reported by House Committees on Education and Labor, Ways and Means, and Energy and Commerce. Specifically, this report focuses on Division A (or I) of H.R. 3200 from those committees. Division A of H.R. 3200 focuses on reducing the number of uninsured, restructuring the private health insurance market, setting minimum standards for health benefits, and providing financial assistance to certain individuals and, in some cases, small employers. In general, H.R. 3200 would require individuals to maintain health insurance and employers to either provide insurance or pay a payroll assessment, with some exceptions. Several insurance market reforms would be made, such as modified community rating and guaranteed issue and renewal. Both the individual and employer mandates would be linked to acceptable health insurance coverage, which would meet required minimum standards and incorporate the market reforms included in the bill. Acceptable coverage would include (1) coverage under a qualified health benefits plan (QHBP), which could be offered either through the newly created Health Insurance Exchange (the Exchange) or outside the Exchange through new employer plans; (2) grandfathered employment based plans; (3) grandfathered nongroup plans; and (4) other coverage, such as Medicare and Medicaid. The Exchange would offer private plans alongside a public option. Based on income, certain individuals could qualify for subsidies toward their premium costs and cost-sharing (deductibles and copayments); these subsidies would be available only through the Exchange. In the individual market (the nongroup market), a plan could be grandfathered indefinitely, but only if no changes were made to the terms and conditions of that plan, including benefits and cost-sharing, and premiums were only increased as allowed by statute. Most of these provisions would be effective beginning in 2013. The Exchange would not be an insurer; it would provide eligible individuals and small businesses with access to insurers' plans in a comparable way. The Exchange would consist of a selection of private plans as well as a public option. Individuals wanting to purchase the public option or a private health insurance not through an employer or a grandfathered nongroup plan could only obtain such coverage through the Exchange. They would only be eligible to enroll in an Exchange plan if they were not enrolled in other acceptable coverage (e.g., from an employer, Medicare, and generally Medicaid). The public option would be established by the Secretary of Health and Human Services (HHS), would offer three different cost-sharing options, and would vary premiums geographically. For the public option, the Ways and Means and Education and Labor versions would have the Secretary set payments to health care providers based on Medicare payment rates, while the Energy and Commerce version would require the Secretary to negotiate rates with medical providers. The Energy and Commerce version also would establish a federal grant and loan program to assist the establishment and initial operation of health insurance cooperatives. Such cooperatives would be state-licensed, non-profit, member-run organizations not sponsored by the state, and offer coverage through the Exchange. Only within the Exchange, credits would be available to limit the amount of money certain individuals would pay for premiums and for cost-sharing (deductibles and copayments). (Although Medicaid is beyond the scope of this report, H.R. 3200 would extend Medicaid coverage for most individuals under 133¿% of poverty; individuals would generally be ineligible for Exchange coverage if they were eligible for Medicaid.)