House Democrats have released a sweeping 1,018-page reform bill. Key changes proposed by the draft legislation, America’s Affordable Health Choices Act, as described in a four-page summary of the bill, are outlined here.
To enhance coverage and choice, the bill would:
- Implement a health insurance exchange designed to allow individuals and small employers to comparison shop among private and public insurers
- Create a self-sustaining public health insurance option, to be financed only by its premiums
- Prohibit lifetime and annual benefit limits and exclusions for pre-existing health conditions
- Create an “essential benefit package” designed to become the minimum quality standard for employer plans
To help ensure affordability, the bill proposes to:
- Institute “affordability credits” for low- and moderate-income individuals and families that phase out when household income reaches 400 percent of the federal poverty level
- Cap annual out-of-pocket spending on healthcare
- Expand Medicaid eligibility for those with incomes at or below 133 percent of the federal poverty level
To control costs, the bill would:
- Implement major Medicare reform initiatives, including accountable care organizations, medical homes, and bundling of acute and postacute provider payments
- Create new incentives to decrease preventable hospital readmissions
- Make changes in the Medicare Part D prescription drug program, including eliminating the coverage “doughnut hole”
- Reform the sustainable growth rate formula with an update that “wipes away accumulated deficits, provides for a fresh start, and rewards primary care services, care coordination, and efficiency”
- Make changes in Medicare payments to Medicare Advantage Plans and other providers as recommended by the Medicare Payment Advisory Commission
- Develop new tools to fight waste, fraud, and abuse
In addition, the draft legislation proposes to implement various prevention and wellness measures, with cost sharing for preventive services prohibited. Funding to expand the healthcare workforce is also proposed.
Individuals who choose not to obtain health insurance coverage would pay a penalty of 2.5 percent of modified adjusted gross income above a specified level. Employers that do not participate would be required to pay an amount equivalent to 8 percent of each uninsured worker’s wages, with exemptions for small businesses.
The bill would tax high earners to help cover the costs of reform, phasing in with a 1 percent tax for households with incomes of $350,000.
