By Jeffrey Young - 06/05/09 08:56 PM EDT
A new draft healthcare reform bill would require individuals to obtain health insurance and mandate that employers provide their workers benefits or face financial penalties.
The draft measure’s language on an individual mandate, floated by a committee headed by Sen. Edward Kennedy (D-Mass.), is similar to what then Sen. Hillary Clinton (D-N.Y.) proposed during her presidential bid. President Obama spoke out against such a mandate last year, but has since softened his stance. Kennedy backed Obama over Clinton in the Democratic primary.
The preliminary draft of the healthcare reform bill represents the first portion of legislative language to emerge from months on public hearings and closed-door meetings on Capitol Hill.
Though the bill is far from finished, lacks key details and only touches on one of categories of reform, it offers a glimpse into the direction the Democrats hope to take the American healthcare system.
The bill text, authored by Senate Health, Education, Labor and Pensions (HELP) Committee staff, is limited to the areas of health insurance coverage and does not touch upon contentious issues such as the creation of a government-run health plan or how to pay for the expected $1 trillion-plus cost of the total package.
The HELP Committee is slated to begin marking up the full bill the week of June 15. The Senate Finance Committee is operating on a similar timetable, as are the three House committees working on healthcare reform. Congress is targeting July 31 as its deadline to pass bills with the further aim of combining them into a final package Obama could sign before the end of the year.
Though the HELP Committee draft that circulated Friday leaves many vital questions unanswered, it contains enough detail to give observers plenty to chew on.
In addition to the new requirements on individuals and employers, the legislation as written would impose new limits on health insurance companies’ ability to deny coverage or charge higher premiums based on preexisting conditions and similar criteria.
Under the heading of “shared responsibility,” the draft bill spells out that everyone legally residing in the United States would be required to obtain some form of health coverage. Individuals would have to certify to the government that they had coverage or pay an unspecific tax penalty if they do not get enrolled. The text makes some limited exceptions to this provision, including an undefined waiver for people based on an “exceptional financial hardship.”
In a letter to Kennedy and Finance Committee Chairman Max Baucus (D-Mont.) Wednesday, Obama indicated that he could tolerate such a policy only if such a hardship waiver were included.
For low-income people, the text calls for expanding Medicaid eligibility to everyone earning up to 150 percent of the federal poverty of level, currently $10,830 for an individual and $22,050 for a family of four.
Subsidies to defray the cost of health insurance would be made available on a slide scale to individuals and families earning between 150 percent of the poverty level to 500 percent; the text does not say what the subsidies would be.
The draft bill also would require employers to either offer health benefits to their workers or pay into a government fund. Small business of an unstated size would be exempt and would also potentially be eligible for government subsidies to help cover the cost of insurance.
To facilitate employers and individuals finding insurance, the measure would create state-based “Affordable Health Benefit Gateways” akin to the “Commonwealth Connector” in Kennedy’s home state or the national “exchange” promoted by Obama during his campaign.
These state (or multi-state) Gateways would offer consumers a central location to shop for health insurance that met federal criteria for benefits and costs. A new federal advisory commission would establish those criteria, which Congress would either accept or reject in their entirety.
The legislative language sets out basic criteria, however, such as requiring insurance plans in the Gateways to cover expenses such as doctor visits, hospitalizations, prescription drugs, mental health and substance abuse treatments, preventive services and manage of chronic diseases.
Patients’ out-of-pocket costs would be capped every year and insurers would not be permitted to establish annual or lifetime upper limits on how much they pay for.
Other notable elements of the draft bill include: allowing young adults up to 26 years old to enroll in their parents health plan and exempting existing union health benefit contracts from certain requirements.
The document contains the text of a Kennedy bill to establish a federally administered insurance program, paid for through a voluntary payroll deduction, that would cover medical and other expenses for elderly and disabled people not living in nursing homes.