Description of Policy Options Expanding Health Care Coverage: Proposals to Provide Affordable Coverage to All Americans

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Description of Policy Options

Expanding Health Care Coverage:Proposals to Provide Affordable Coverage to All Americans

Senate Finance CommitteeMay 14, 2009

TABLE OF CONTENTS

SECTION I: Insurance Market Reforms .................................................. 2

Non-Group and Micro-Group Market Reforms ............................................................. 2Small Group Market Reforms ........................................................................................ 3Health Insurance Exchange ............................................................................................ 4Transition ....................................................................................................................... 7Role of State Insurance Commissioners ........................................................................ 7

SECTION II: Making Coverage Affordable ............................................. 8

Benefit Options .............................................................................................................. 8Low-Income Tax Credits ............................................................................................. 10Small Business Tax Credits ......................................................................................... 12

SECTION III: Public Health Insurance Option ...................................... 13SECTION IV: Role of Public Programs .................................................. 14

Medicaid Coverage ...................................................................................................... 14Children’s Health Insurance Program (CHIP) ............................................................. 19Quality of Care in Medicaid and CHIP ........................................................................ 22Other Improvements to Medicaid ................................................................................ 23Medicaid Disproportionate Share (DSH) Hospital Payments ..................................... 32Dual Eligibles ............................................................................................................... 34Medicare Coverage ...................................................................................................... 37

SECTION V: Shared Responsibility ........................................................ 39

Personal Responsibility Coverage Requirement .......................................................... 39Employer Requirement ................................................................................................ 41

SECTION VI: Prevention and Wellness .................................................. 43

Promotion of Prevention and Wellness in Medicare ................................................... 43Promotion of Prevention and Wellness in Medicaid ................................................... 46Options to Prevent Chronic Disease and Encourage Healthy Lifestyles ..................... 47Employer Wellness Credits .......................................................................................... 48

SECTION VII: Long Term Care Services and Supports ................................. 49SECTION VIII: Options to Address Health Disparities .................................. 56

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Senate Finance Committee

Expanding Health Care Coverage: Proposals to Provide Affordable Coverage to All Americans

The U.S. is the only developed country that does not guarantee health coverage for all itscitizens, with 46 million uninsured and another 25 million underinsured. Today, the cost of caring for the uninsured is largely borne by those with insurance; providers charge higher pricesto patients with private coverage to make up for uncompensated care, and these costs are passedon to consumers in the form of increased premiums. A high-performing health system wouldguarantee all Americans affordable, quality coverage regardless of age, health status, or medicalhistory. This document outlines policy options for providing affordable health care coverage forall Americans.Proposals included in this document would ensure that the insurance market functionseffectively. Reforms proposed for the individual and small group markets would ensure acompetitive insurance market in which plans compete on price and quality rather than on theirability to segment risk and discriminate against individuals with pre-existing health conditions.Proposals contemplated in this document would also make purchasing health insurance coverageeasier and more understandable by establishing a gateway or marketplace where Americanconsumers could easily compare and purchase the coverage that best fits their needs.To ensure that coverage is affordable, this document outlines a proposal for targeted tax creditsfor low-income individuals and small businesses. And for the most vulnerable populations,policy options described here would improve public programs by covering those at the lowestend of the income scale who are least likely to have private coverage through an employer.Once affordable, high-quality, and meaningful health insurance options are available to allAmericans through their employer or the new gateway, individuals would have a personalresponsibility to have health coverage. This step is necessary for insurance market reforms tofunction properly and to end the cost shifting that occurs within the system. It is expected thatthe vast majority of American employers would continue to provide coverage as a competitivebenefit to attract employees.Finally, this document outlines proposals to promote prevention and wellness services in publicprograms. By encouraging healthy behaviors, these policy options make a first step in movingour health system away from a focus on treating disease toward one focused on preventingdisease.This document and the options described in it are intended to spur discussion regarding proposedoptions for policies that the committee is scheduled to act on in June. While these proposedoptions are jointly offered for discussion, not all the options in this document have the support of Chairman Baucus or Ranking Member Grassley.

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