The health insurance debate continues: a look at differences between house, senate proposals and how they would affect OEMs

Orthopedic Design & Technology, Sept-Oct, 2009 by Charles E. Schneider

When comparing H.R. 3200 (America's Affordable Health Choices Act of 2009), introduced in the House, with the Affordable Choice Act developed by the Senate's Health, Education, Labor and Pensions (HELP) committee, each bill attempts to introduce mechanisms purportedly to provider greater access to healthcare coverage and lower overall healthcare costs, while infusing competition through the development of a public health plan option. According to the bipartisan Congressional Budget Office (CBO), H.R. 3200 will create a net increase of the federal deficit by approximately $239 billion--from 2010 to 2019, while the CBO estimated in July that the Senate's bill would result in a net health increase of $1 trillion over the 2010 to 2019 period.

* Qualified Health Plans. Key provisions within H.R. 3200 include standards by which health carriers are deemed to be "qualified health benefit plans." Both H.R. 3200 and the HELP Committee bill prohibit coverage exclusions based upon pre-existing conditions, require guaranteed issue and renewal of coverage and limit age rating to a ratio of 2:1. The essential benefits package would cover specified items and services, limit cost sharing, prohibit annual and lifetime limits on covered services, ensure the adequacy of provider networks, and are equivalent (as certified by the Office of the Actuary at the Centers for Medicare and Medicaid Services) to the average prevailing employer-sponsored coverage. The Senate's HELP Committee bill allows for premium rates to vary based upon family composition, community rating area, actuarial value of the benefit package and age rating similar to H.R. 3200.

* Benefits & Insurance Exchange. H.R. 3200 also establishes a health benefits advisory committee that makes periodic recommendations to the U.S. Department of Health and Human Services (HHS) secretary on benefit standards; establishes a national health insurance exchange through which consumers could purchase health insurance, including a public option; and establishes the Health Choice Administration under the executive branch, which administers health plan standards, operates the national health insurance exchange, administers "affordability credits" and related functions. Finally, H.R. 3200 requires all individuals to maintain "acceptable healthcare coverage" (defined as coverage under a qualified health benefit plan).

* Tax Revenue. Individuals will be taxed if they do not maintain acceptable healthcare coverage for themselves or dependent children. H.R. 3200 includes a surtax on individuals' income greater than $350,000 of their adjusted gross income (1 percent) and 1.5 percent of their adjusted gross income between $500,000 and $1 million, and 5.4 percent of adjusted gross income greater than $1 million.

* No Liability Reform. There are no material liability reform provisions within H.R. 3200 or the Senate current bill. Rather, H.R. 3200 incorporates the Physician Payment Sunshine act and requires electronic reporting of value to covered recipients (i.e. physicians).

* Medical Device Registry. Unlike the Senate's bill, H.R. 3200 establishes a National Medical Device Registry to assist with post-market surveillance of safety and patient outcomes in which the device manufacturer must submit information to the registry including the type, model and serial number of the device, safety data, and adverse events. It also would allow for public access to the registry.

One of the most debated portions of proposed legislation includes a national public insurance option. H.R. 3200 requires the HHS secretary to develop a new national public health insurance option to be offered through the exchange, beginning Jan. 1, 2013. Under the direction of the HHS secretary, he or she will establish geographically adjusted provider payment rates, the first three years of which will be based on Medicare rates, with Medicare participating providers receiving an additional 5 percent above the current payment value. The Senate's bill also would require a public option, offered through State Gateways, and requires the HHS secretary to negotiate reimbursement rates with healthcare providers. The Senate's bill would not require physician participation in the program. In a letter from the CBO to Sen. Michael Enzi, (R-Wyo.), dated Sept. 10, the CBO states a public option would "... probably lower private premiums to a small degree" and points out that a public option would likely attract enrollees who, overall, are less healthy than average, which would increase costs within the public option. President Obama delivered an address to Congress on Sept. 9, encouraging quick passage of a comprehensive healthcare bill, including a public option.

As seen in Medicare and some commercial insurance programs, H.R. 3200 adjusts payments to hospitals for preventable re-admissions, with expansion from three conditions to additional conditions as determined by the HHS secretary. Payment adjustments will be based upon risk-adjusted metrics. HHS also is expected to expand bundled payment programs but prohibits physician ownership in new hospitals.