If you want to know what's in the health care bill currently being considered by Congress, the best thing to do is to read the bill.
Now, the bill (H.R.3200, otherwise known as "America's Affordable Health Choices Act of 2009") as introduced in the house is very large, but since the most controversial part of this is a provision for a "public option" for health care coverage, that is the part we examine here.
Where to Find It
The public option for health care coverage is found in Title II, Subtitle B of H.R. 3200.
The Context of Title II
Title II itself establishes a Health Insurance Exchange. Within Title II, Subtitle A defines the Exchange, Subtitle B defines the Public Health Insurance Option, and Subtitle C defines Individual Affordability Credits which help reduce the premium cost of individuals based on their income.
Health Insurance Exchange
Basically, the exchange will consist of multiple insurance offerings from various qualified health benefits providers (read: private health insuranc companies). The public option will be added to the exchange, subject to the same rules as private companies face.
This Exchange exists seperately from the current insurance market for individuals and employers. In order to participate in the exchange, individuals or employers must be eligible.
Individual Qualification for the Exchange
Individuals who currently have good employer-provided full-time health benefits where the employer pays a good portion of the bill are NOT elibible for the Exchange.
Likewise, individuals covered by Medicare, Medicaid, VA or armed forces health care coverage are excluded.
Once you are eligible for the exchange, you remain eligible until you qualify for Medicare or Medicaid.
Employer Eligibililty
Employers can participate in the Exchange, starting with smaller employers, then going to larger employers after a transitional phase-in period of a few years.
In the first year, only employers with 10 or fewer employees are eligible. In the second year, employees with 20 and fewer employees are eligible. In year 3, all employers can be eligible.
Once an employer is eligible, they remain eligible no matter how many employees they have. Employers can choose to terminate their eligibility by offering a group health plan.
Benefit Levels
Each coverage provider in the exchange will offer at least a basic coverage plan, but there may be optional offerings of Enhanced, Premium, and Premium Plus levels of coverage.
Open Enrollment and Special Enrollment Periods
Open enrollment will be at least 30 days sometime between September and November of each year - very similar to the way employers currently do it.
Special enrollment can occur when an individual loses coverage, has a change in marital or dependent status, moves to a different service area, or has a significant change in income.
Individuals receiving subsidized coverage or who are enrolled in a terminated plan may be automatically enrolled in a plan that matches them, but it does not have to be the public option.
Premiums
Individuals enrolling in coverage through the Exchange pay the chosen provider for their premiums directly.
Funding for the Exchange
Funding for the operation of the exchange, as well as affordability credits that help individuals reduce their premiums will come from 4 main sources:
- Taxes on individuals who don't obtain acceptable coverage
- Employment taxes on employers not providing acceptable coverage
- Excise tax on failures to meet certain health coverage requirements
- Appropriations from the general treasury
State-based exchanges
States that so choose, may create their own health insurance exchanges if they meet satisfactory criteria, and these exchanges will take the place of the federal exchange.
Finally - talking about the public option
Now that you understand how the exchange is going to work, understand that the public option is going to be exclusively offered through the Exchange.
In order to compete on a level playing field, the public health insurance option is required to comply with all of the same requirements as the private plans.
In fact, section 221(c) explicitly allows the government to contract out the administration of the public option, but all insurance risk stays with the government.
Public Plan Premiums
Premium amounts will be geographically adjusted, and set at levels that fully finance the costs of care, plus administrative costs.
Start-up Reserves
In order to provide sufficient reserves to cover claims, the government will provide the public plan with $2 billion, WHICH IT WILL PAY BACK to the treasury over 10 years.
Payment to Providers
Payment rates to doctors and other health care providers will be based on the payment rates for Medicare, then adjusted as needed to ensure enough participating providers. Services not typically covered by Medicare, such as well-child visits will be determined by an administrative process.
For the first 3 years, the public option will offer 5% greater reimbursement rates as an incentive for participation by providers.
All providers currently accepting Medicare become providers under the public option unless they opt out.
Providers will either be preferred providers (willing to accept the payment rate as payment in full) or participating non-preferred (may charge a certain amount more, up to a cap, the difference payable by the individual).
WHERE IS THE SOCIALISM?!?!?
So far, what we've described of the public option is nothing more than a common PPO plan. The only difference being that the public version will charge only enough to make it self-sufficient, and will not try to make a profit.
Individual Affordability Credits
Here is where the government comes in to help people who can't afford their premiums.
If an individual is eligible for the Exchange and their income is below a certain level, but they are not Medicaid eligible, they will be able to apply for affordability credits. The amount of the credit is the amount by which the premium exceeds their ability to pay. The credit is paid directly to the insurance provider, and never in the form of cash to the individual.
The credit can only be used for the basic plan offering in the first two years, but in later years it can be applied to premium plans
The credit does NOT have to be used for the public plan, but can be used to purchase coverage under any of the plans.
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