Private Health Insurance Provisions of S. 1679 (CRS Report for Congress)
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| Release Date |
Oct. 15, 2009 |
| Report Number |
R40861 |
| Report Type |
Report |
| Authors |
Hinda Chaikind, Chris L. Peterson, and Paulette C. Morgan, Specialists in Health Care Financing; Bernadette Fernandez, Analyst in Health Care Financing |
| Source Agency |
Congressional Research Service |
Summary:
This report summarizes key provisions affecting private health insurance in S. 1679, the Affordable Health Choices Act, as ordered reported by the Senate Committee on Health, Education, Labor and Pensions (HELP) on July 15, 2009.
Title I of the bill 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, the Senate HELP bill would require individuals to maintain health insurance and employers to either provide insurance or pay a fee in lieu of coverage, 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 qualifying health insurance coverage. Qualifying coverage would include (1) coverage under a qualified health plan (QHP) obtained through the newly created American Health Benefits Gateways; (2) new group or individual coverage that meets or exceeds minimum qualifying coverage; (3) grandfathered employment-based plans; (4) grandfathered nongroup plans; and (5) other coverage, such as Medicare and Medicaid. The Gateways would offer private plans alongside a community health insurance option. Based on income, certain individuals could qualify for subsidies toward their premium costs; these subsidies would be available only through a Gateway. Currently existing plans could be grandfathered indefinitely, if the plan had not been altered to a significant extent. Most of these provisions would be effective one year after enactment, or on the date on which a state has an operating Gateway. A state would be required to have an operating Gateway within four years of enactment, or the Secretary of Health and Human Services would establish one in the state as a federal fallback.
A Gateway would not be an insurer; it would provide eligible individuals and small businesses with access to insurers' plans in a comparable way. A Gateway would consist of a selection of private plans as well as a community health insurance option. A community health insurance option is a public plan created by the Secretary of Health and Human Services that generally meets the requirements that apply to all private Gateway plans. Eligible individuals for a Gateway plan could purchase the community health insurance option or a private health insurance plan. Individuals would be eligible to enroll in a Gateway plan only if they were not eligible for certain other coverage, including coverage through an employer, Medicare, and Medicaid, among others. The community health insurance option established by the Secretary of Health and Human Services (HHS) would offer the essential benefits package plus any state mandated benefits. For the community health insurance option, the Secretary would be required to negotiate with medical providers to set payment rates, subject to limits. Credits to limit the amount of money certain individuals would pay for premiums would be available only within a Gateway.
New plans could also be sold in both the individual and group market outside of the Gateway, but only those new plans that meet the minimum requirements would satisfy the mandates for individuals and employers.
