The proposal includes the following measures, all based on House and Senate Democrats’ reform bills.
1. Extend Medicaid subsidies to states and eliminate preferential payments. Additional Medicaid funding for states, like Nebraska, in the Senate bill would be eliminated and replaced by a uniform 100 percent federal support for all states for newly eligible individuals from 2014 through 2017, 95 percent support for 2018 and 2019, and 90 percent for 2020 and subsequent years.
2. Reduce the number of uninsured. About 31 million people would be added to the insurance rolls through tax credits, subsidies for health insurance premiums and Medicaid expansion.
3. Improve tax credits and subsidies for buying health insurance. Relative to the Senate proposal, premiums would be lowered for families with incomes below $44,000 and above $66,000. In addition, families with incomes below $55,000 would receive extra financial assistance, covering 73-94 percent of their healthcare costs.
4. Strengthen oversight of insurers’ premium increases. Health plans would be required to undergo rate review with states and a new federal Health Insurance Rate Authority. If a rate increase were deemed unreasonable and unjustified, health insurers would be required to lower premiums, provide rebates or take other actions to make premiums affordable.
5. End exclusion of applicants with pre-existing conditions. When health insurance exchanges begin in 2014, the proposal would ban pre-existing condition exclusions, all annual and lifetime limits and discrimination in favor of highly compensated individuals. Beginning in 2018, all plans — even grandfathered plans — would be required to cover proven preventive services with no cost sharing.
6. Add other consumer protections against insurance practices. Insurance-holders would be able to keep their current coverage. Within two years of enactment, plans would have to cover adult dependents up to age 26 and eliminate rescissions. It would also strengthen the appeals process for coverage denials.
7. Modify certain medical review limitations of Medicare providers. Certain medical review limitations would be modified to give Medicare contractors better and more efficient access to medical records and claims.
8. Change Medicare Advantage Payments. A set of benchmark payments for Medicare Advantage managed care plans for seniors would be phased in. Medicare currently pays Medicare Advantage plans 14 percent more than payment for traditional coverage.
9. Delay ‘Cadillac Tax.’ A new tax on high-end health insurance plans would be delayed until 2018. The threshold for the excise tax on the most expensive health plans, which would start in 2018, would be raised from $23,000 for a family plan to $27,500.
10. Close the coverage gap in the Medicare prescription drug benefit. The proposal would close the so-called “donut hole” after the plan and beneficiary have spent $2,830 on prescription drugs and after out-of-pocket spending reaches $4,550.
11. Cost: About $950 billion over 10 years. The $950 billion cost would be offset by Medicare spending cuts and new taxes, so that the federal budget deficit would be reduced by about $100 billion over 10 years, according to the White House. Republicans, however, are skeptical of this estimate, and the Congressional Budget Office has not yet scored the plan.
12. What it doesn’t have. The proposal does not contain a government-backed insurance option, the so-called “public option” that liberals wanted or any proposal by the Republicans, including malpractice insurance reform.
Read the White House’s outline of the president’s health reform plan (pdf).
