Insurance Exchange, Mandate, Public Option Among Democrats’ Health Ideas

By and | May 15, 2009

House Democrats are looking at big health care changes, including federal aid to help families earning up to $88,000 pay for insurance and a requirement that all must carry coverage.

A document obtained by The Associated Press shows the plan being developed by the House Energy and Commerce Committee would also require employers to offer coverage to their full-time workers, or pay a percentage of their payroll to the government.

The committee summary is a first look at where House Democrats are headed as leaders try to meet an ambitious goal of passing a health care overhaul by the end of July. Energy and Commerce Chairman Henry Waxman, D-Calif., is expected to play a leading role in crafting the plan and steering it through negotiations with the Senate later in the year.

The three-page summary broadly tracks with the type of plan President Barack Obama outlined during the political campaign. The summary does not include any cost estimates, but independent experts have put the price tag for such a plan at $1.2 trillion to $1.5 trillion over 10 years, with some estimates ranging as high as $1.7 trillion.

Obama has said the final legislation must rein in costs, guarantee choice of health plans and medical providers, and ensure that all Americans have access to affordable coverage. The president has proposed a downpayment of $634 billion over 10 years to pay for expanding coverage. He’s also promising to hold hospitals, doctors, drug makers and other providers to their recent offer of $2 trillion in savings over 10 years.

The Energy and Commerce plan would build on the current system in which employers, government and individuals share responsibility for the cost of health insurance. But it would make major changes in the way Americans get and pay for coverage. Workers and employers would have new obligations to obtain coverage. Insurers would have to abide by new consumer protections to prevent sick people from being denied coverage.

The subsidies for health insurance would be offered on a sliding scale to those earning up to four times the federal poverty level, or $88,200 for a family of four, according to the document.

The House plan would set up a new insurance purchasing pool called an “exchange” to help make private coverage more affordable for individuals and small businesses. In its first year, the exchange would be open only to employers with fewer than 10 workers.

Health insurance plans that participate in the exchange would have to follow the same consumer protection rules. They would not be able to deny coverage to the sick, or charge them exorbitant rates.

The document also calls for creation of a new government insurance plan to compete with private companies. The government plan would probably be run by the Health and Human Services department, but it would have to compete on its own. The government insurance plan would be financed by premium payments, not taxpayer dollars.

1. Does your agency or company sell group health insurance and, if so, how would a competing public plan affect your business?
2. How would a mandate that all employers provide health coverage or pay a fee affect the group insurance marketplace?

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