• House Energy and Commerce Committee approves "Affordable Health Choices Act" H.R. 3200
• Senate Finance gets new CBO numbers

• HR policy association provides reform recommendations
• 11 million uninsured are from middle class families: Kaiser
• Family insurance premiums topped $12,000 per year in 2008
• Poverty status, insurance coverage are greatest indicators of health status

House Energy and Commerce Committee Approves "Affordable Health Choices Act", H.R. 3200

On July 31, the House Energy and Commerce Committee completed markup of H.R. 3200, the Affordable Health Choices Act, and approved the bill by a vote of 31-28. The bill retains a public health insurance option to be offered along with private health insurance plans in a health care exchange.

An amendment offered by Rep. Anthony Wiener (N.Y.) with six cosponsors to replace the current bill with a single-payer option was withdrawn when Rep. Henry Waxman (Cal.), the committee chairman, announced that Speaker of the House Nancy Pelosi (Cal.) had agreed to allow the full House to vote on the single payer proposal.

Other major amendments to the 1,026-page bill would do the following:

• Qualified Health Benefits Plan (QHBP) - all health insurance plans, including employer-sponsored ones, would have to offer an essential benefits package including inpatient and outpatient hospital care, physician services, prescription drugs, maternity and well-baby and well-child care, mental health and substance abuse coverage parity with physical health, and preventive care with no cost sharing. A QHBP could not require insured cost sharing exceeding $5,000 for individual and $10,000 for family coverage, or set annual or lifetime coverage limits. Furthermore, provider networks would have to be "adequate," and plans would have to meet a minimum medical loss ratio or provide a rebate to enrollees.
• HIPAA-permitted preexisting condition exclusion periods would be reduced from 12 months to three months (but from 18 months to nine months for late enrollment), and the look-back period for a condition for which medical advice, diagnosis, care, or treatment was recommended or received within the period immediately prior to the enrollment date would be reduced from six months to 30 days.
• The bill would incrementally implement the percent of payroll that a small firm that does not offer a QHBP would have to pay from 2% for firms with more than $500,000 to $585,000 in payroll for the preceding year up to 6% for a firm with more than $670,000 to $750,000 in payroll.
• The bill would lower to 400% the maximum percent of federal poverty level income that may qualify for a federal premium subsidy.
• The bill would prohibit providing federal funds to "bail out" the public health insurance plan and would require that a public plan operate on a "level playing field" with private plans in the exchange.
• The bill would exempt from punitive taxes for failure to enroll in "acceptable coverage" all veterans of the military who are enrolled in the Veterans Administration health program, and allows them to purchase a second coverage through the health care exchange.
• The bill would make it a violation of the Food and Drug Administration Act for brand name drug makers to "pay to delay" market introduction of generic versions of a drug.

The House has now recessed until after Labor Day, when it will merge the three committees' versions before H.R. 3200 goes to a floor vote.

Senate Finance gets new CBO numbers

Meanwhile, Senate Finance Committee chair Sen. Max Baucus (Mont.) said that his Committee had received a Congressional Budget Office (CBO) report that estimates the cost of a negotiated Finance Committee proposed bill "below $900 billion over ten years, covers 95% of all Americans by 2015 and is fully offset." Mr. Baucus added that the CBO estimates also showed a reduction in the federal deficit after ten years and an increase in employer-sponsored coverage.

The Finance Committee is trying to finish its work on health reform by the Senate's August recess, which begins after August 7.

Reportedly, three Republicans and three Democrats on the committee are working on a proposal that would replace a public plan option with nonprofit cooperatives and impose a tax on health insurance policies with premiums that exceed $25,000. Sens. Chuck Grassley (Iowa) and Mike Enzi (Wyo.) both have suggested that the Finance Committee might have to wait until after the August recess to finish its work.

HR policy association provides reform recommendations

In a July 28 letter, the HR Policy Association provided 20 recommendations to Congress on health care reform. The HR Policy Association represents human resources officers from more than 280 large employers that employ more than 10 million employees and spend approximately $75 billion annually on purchasing health care for employees and dependents.

According to the HR Policy Association, "Our members agree with the widely held belief that the cost trend of providing quality health care to employees, dependents, and retirees in the United States is not on a sustainable path. They firmly believe that the nation must act to contain costs, improve quality, and expand access to our health care system to all Americans in order to maintain our nation's well-being and global competitiveness. For these reasons, HR Policy Association fully supports comprehensive health care reform."

In the letter, the HR Policy Association offered 20 recommendations on how to achieve health care reform, including the following:

Improved savings for private payers

• Preserve ERISA preemption. According to the HR Policy Association, Congress should preserve full ERISA preemption, which allows multistate employers to develop and administer benefit plans under uniform rules.
• Allow employers offering coverage to provide benefits without new federal benefit mandates. The letter noted that health care reform that includes specific benefit mandates on employers would undermine their ability to manage their health care plans, pursue innovative approaches to control costs, and improve quality. Also, the HR Policy Association opposes health care reform that imposes expensive minimum benefit requirements on employers that force them to offer rich benefit plans with costs that neither employers nor beneficiaries can afford.
• Make Medicare and Medicaid information available to private payers. The HR Policy Association would like health care reform legislation to allow Medicare and Medicaid to release claims and other relevant data with provisions to protect patient privacy, not provider privacy. This would help the private sector combine private and public information to create comprehensive profiles of provider and health care plan performance that facilitate informed patient decision-making.

Improving savings for government plans

• Medicare and Medicaid payment reform. According to the HR Policy Association, Medicare and Medicaid payments should phase out the current fee-for-service system for most service providers and move toward a methodology that makes systems of providers accountable for the cost and quality of their care.
• Revise Medicare and Medicaid benefit designs to adopt best practices. The HR Policy Association also would like to see Medicare and Medicaid benefits redesigned to utilize best practices in benefits management and design.
• Establish an independent body to oversee Medicare provider quality and reimbursement. The letter also noted that to reform Medicare, Congress should create an independent commission to oversee and determine Medicare reimbursement policy.

For more information, visit http://www.hrpolicy.org/downloads/2009/Ltr_to_Congress_and_hc_recs.pdf.

11 million uninsured are from middle class families: Kaiser

While 66% of the nation's elderly uninsured are from low-income families, (24%) 11 million come from the middle class, according to a recent report from the Kaiser Family Foundation. The July 2009 report, Health Care and the Middle Class: More Costs and Less Coverage, defined the middle class as a family of two to four individuals having incomes between 200% and 400% of the federal poverty level, which is approximately $44,000 to $88,000 in 2009.

Kaiser noted that 70% of the growth in the uninsured between 2004 and 2007 came from the middle class, which underscores the erosion of employer-sponsored coverage. In fact, while nearly three out of four middle class families are insured through their employer's coverage, such coverage is in jeopardy as unemployment levels have climbed from 4.9% in December 2007 to 9.5% in June 2009.

In addition, the growth in health insurance premiums has made health care coverage less affordable for millions of Americans. Between 2000 and 2008, the cumulative increase in health insurance premiums (119%) grew more than three times faster than wage increases (34%). Kaiser noted that the average annual family contribution for employer-sponsored coverage has risen to $3,354. For a family of four earning $50,000, that contribution would consume 7% of their pretax income.

According to Kaiser, many middle class working-age adults are having financial problems that they say have been caused by the recession. One in six reported that they or someone in their family have lost a job, and 10% have lost their health care coverage.

For more information, visit http://www.kff.org/healthreform/upload/7951.pdf.

Family insurance premiums topped $12,000 per year in 2008

The cost of insuring a family of four with an employer-sponsored health care plan in the United States averaged $12,298 in 2008, according to a recent report from the Department of Health and Human Services' Agency for Healthcare Research and Quality (AHRQ).

The agency's new data for private industry also showed that the annual premium for covering an employee and one family member, known as an "employee-plus-one" plan, averaged $8,535, while the annual premium for a plan that only covered the employee averaged $4,386. The agency's information is published in MEPS Statistical Brief 251: Employer-Sponsored Single, Employee-Plus-One, and Family Health Insurance: Selection and Cost, 2008.

Almost 20 million of the 62.5 million workers enrolled in employer-based insurance in 2008 had family plans, while about 11 million had employee-plus-one plans. The 31.5 million remaining workers had single-coverage plans.

The AHRQ's 2008 private-industry data also revealed the following:

• Nationally, workers enrolled in family plans last year contributed an average of $3,394 toward the cost of their premiums, compared with $2,303 for an employee-plus-one plan and $882 for a single-coverage plan.
• Across all states, workers in Florida contributed the most for a family plan ($4,412) while Indiana workers contributed the least ($2,472). For employee-plus one plans, New Hampshire workers contributed the most and Idaho workers the least ($3,005 and $1,736, respectively). For single coverage, New Hampshire workers again contributed the most ($1,264) and workers in Hawaii contributed the least ($451).
• Employers paid the entire premium amount for approximately 22% of workers with single-coverage plans. In contrast, employers paid the entire premiums for only 11% of workers with family plans and 9% of those with employee-plus-one plans.

For the complete report, visit http://www.meps.ahrq.gov/mepsweb/data_files/publications/st251/stat251.pdf.

Poverty status, insurance coverage are greatest indicators of health status

Not surprisingly, the number of adults age 55 and older who suffered from fair or poor health status, chronic conditions, and "unhealthy" practices generally increased with advancing age. However, poverty status and health insurance coverage were more indicative of health status, physical and social functioning, health care use, and health behaviors. These were among the conclusions of the National Health Statistics Report, Health Characteristics of Adults Aged 55 Years and Over: United States, 2004-2007.

The U.S. Census Bureau projects that by the year 2030, adults age 65 and older will represent 20% of the U.S. population, while the group age 55 and older will constitute nearly one-third (31.1%) of the population. With the growing number of older-age adults and longer lifetimes comes the need for prevention of chronic conditions and injuries, and for greater adoption of healthier lifestyles and of preventive health services, the Centers for Disease Control and Prevention (CDC) has asserted. Hence, to determine the health status and adoption of healthier behaviors among this population, the National Center for Health Statistics of the CDC reviewed data for 36,984 adults age 55 and older gleaned from the 2004 through 2007 National Health Interview Survey.