Health Care Reform Update (as of March 22, 2010)

As you are no doubt aware, on March 21st, the U.S. House of Representatives passed the Senate health care reform bill, HR 3590 (the Patient Protection and Affordable Care Act) by a vote of 219 to 212.  The passage by the House is a huge step forward toward meaningful health care reform, and the outlook from here looks very positive. 

The bill will be implemented in phases. When fully phased in, 95 percent of eligible Americans would have coverage, compared with 83 percent today.

Below is a summary of key provisions contained in the reform bills:

• COST: According the Congressional Budget Office, the plan will cost $940 billion over ten years, but will reduce the federal deficits by $143 billion in the next 10 years.
• MEDICAID: Expansion of Medicaid to everyone below 133% of the Federal Poverty Level ($29,327 for a family of four). This means that starting in 2014, childless adults would be covered by Medi-Cal for the first time. The federal government would pay 100 percent of costs for covering newly-eligible individuals through 2016.
• HEALTH PLAN TAX:  Most nonprofit Safety Net Health Plans (including SFHP) will be exempt from the $67 billion insurer excise tax, safety net-type health plans are defined.
• EXPANSION PROGRAMS:  Allows states to create health coverage programs for people with incomes from 133% to 200% FPL, but who are not eligible for Medicaid.  Permits states to obtain a five-year waiver of certain new health insurance requirements if the state can demonstrate that it provides health coverage to all residents that is at least as comprehensive as the coverage required under an Exchange plan, and that the state plan does not increase the federal budget deficit. (Effective January 1, 2017)
• PUBLIC OPTION:  No public option is included, but people purchasing coverage through the new insurance exchanges would have the option to sign up for national plans overseen by the federal office that manages the health plans available to members of Congress. Those plans would be private, but one would have to be nonprofit.
• MAINTENANCE OF EFFORT: Prohibits states from limiting eligibility or making cuts to Medi-Cal programs in order to receive federal funding (MediCaid funding match).
• S-CHIP:  Require states to maintain current income eligibility levels for children in Medicaid and the Children’s Health Insurance Program (CHIP) until 2019 and extend funding for CHIP through 2015.  The CHIP benefit package and cost-sharing rules will continue as under current law. Beginning in 2015, states will receive a 23 percentage point increase in the CHIP match rate, up to a cap of 100%. CHIP-eligible children who are unable to enroll in the program due to enrollment caps will be eligible for tax credits in the state exchanges.
• Establishes the Community-based Collaborative Care Network Program to support consortiums of health care providers to coordinate and integrate health care services, for low-income uninsured and underinsured populations. Funds are appropriated for five years beginning in FY 2011.
• INSURANCE MANDATE: Almost everyone is required to be insured or else pay a fine, which takes effect in 2014. There is an exemption for low-income people.
• SPECIAL STATE DEALS:  If the Senate approves a package of changes, a special deal that would have given Nebraska 100 percent federal financing for newly eligible Medicaid recipients in perpetuity would be eliminated. A different, one-time deal, negotiated by Democratic Senator Mary Landrieu for her state, Louisiana, worth as much as $300 million, still remains.
• INSURANCE MARKET REFORMS: Starting this year, insurers would be forbidden from placing lifetime dollar limits on policies, from denying coverage to children because of pre-existing conditions, and from canceling policies because someone gets sick. Parents would be able to keep older kids on their coverage up to age 26. A new high-risk pool would offer coverage to uninsured people with medical problems until 2014, when the coverage expansion goes into high gear. Starting in 2014, insurers would be prohibited from denying coverage to people with medical problems or charging them more and insurers could not charge women more.
• PRESCRIPTION DRUGS: Gradually closes the "doughnut hole" coverage gap in the Medicare prescription drug benefit by 2020.

While these changes will have a positive impact on our goal toward universal coverage, the direct effect on our programs is still unknown.  It appears that employers and individuals would have the option to purchase insurance through the new exchanges, or be eligible for tax credits or Medi-Cal. Undocumented individuals would not benefit from this reform bill, therefore programs such as Healthy San Francisco and Healthy Kids would still be needed.

This is a historic time for our nation.  While we eagerly await more details and decisions on health care reform, we feel confident that we are taking the right steps towards preparing SFHP to be a leader in the effort to ensure high quality healthcare for all.