Baucus Unveils Coop Draft

Under the proposal, some states may enact reforms quicker but others may take the entire 5 years.

For purposes of these reforms, a small group would be defined as 1 to 50 employees, or up to 100 depending on state law. In 2017, states must develop a phase-in schedule, not to exceed 5 years, for incorporating larger groups, up to 100 employees.

The draft bill would require drug manufacturers to provide a 50% discount off the negotiated price for brand-name drugs covered on plan formularies when beneficiaries enter the “doughnut,” or the coverage gap now part of the Part D prescription drug benefit under Medicare.

Beneficiaries are eligible provided they do not qualify for low-income subsidies, do not have employer-sponsored coverage or do not pay higher Medicare premiums under Part B or Part D.

It would also require states by 2010 to establish an ombudsman office to act as a consumer advocate for those with private coverage in the individual and small group markets. Policyholders whose health insurers have rejected claims and who have exhausted internal appeals would be able to access the ombudsman office for assistance.

Also in 2010, according to the draft, states would establish an exchange to provide easier, more efficient comparison of health insurance plan benefits and premium costs.

“We’re encouraged by the chairman’s proposal, which seems to generally build on the employer-provided system,” says Joel Kopperud, a government affairs director for the Council of Insurance Agents and Brokers, Washington.

Kopperud says it remains unclear under the draft how the proposed coops would be designed, “but we are hopeful that they would be established in a way that competes fairly with the private market.”

“We remain very concerned that any new taxes or fees on insurance plans will ultimately be passed on to the consumer,” Kopperud says. “We recognize that there a lot of work remains, and we hope that bipartisan consensus can be achieved on a solution that preserves employer-provided coverage.”

Analysts at Washington Analysis, Washington, are warning that while Baucus hopes to start work within his committee on his draft beginning next week, key members of the group of 6, Sen. Charles Grassley, R-Iowa, the highest-ranking Republican on the committee, and Sen. Michael Enzi, R-Wyo., the highest-ranking Republican member of the Senate HELP Committee, “have neither discarded their opposition to liberal efforts nor the requirements on what it would take for them to support a measure. Yet they still maintain they are not walking away from the negotiations…. We doubt either will bless a bill from the Gang of Six, but the odds still favor support from Sen. Olympia Snowe, R-Maine.”