The main House health bill — H.R. 3962, the Affordable Health Care for America Act — has arrived.

House Democratic leaders say the 1,990-page AHCAA bill, introduced by Rep. John Dingell, D-Mich., would increase the percentage of U.S. residents with health coverage to 96%, from 83% today, at a cost of about $894 billion over 10 years.

House Speaker Nancy Pelosi, D-Calif., and other House leaders created H.R. 3962 by combining and revising three other health bills developed by the House Education and Labor, Energy and Commerce, and Ways and Means committees.

The bill would create a Health Insurance Exchange system that individuals could use to buy health insurance from private insurers and government-run plans.

The bill also would provide incentives for the creation of nonprofit, state-based health insurance cooperatives, and it would explicitly ensure that insurance agents can continue to offer all products sold through the exchange system.

House leaders expect the bill to come up for debate on the House floor next week.

The text of the bill is here.

The Congressional Budget Office analysis is here.

WHERE THE JUICY PARTS ARE

Health insurers have lobbied hard against congressional health bill provisions that would create new government-run health plans and a new government-run long term care insurance program.

In H.R. 3962, the public health insurance option section starts on page 211, and the Community Living Assistance Services and Supports Act LTC program section starts on page 1,213.

The public option plans would have to negotiate their own rates with providers, rather than using the ultra-low Medicare rates. Doctors and hospitals had argued that letting the government plan use Medicare rates would depress already low reimbursement rates even further, and insurers had complained that providers would make up for ultra-low public plan reimbursement rates by trying to jack up the fees privately insured patients pay.

Health agents have lobbied hard to ensure that, if the government does create a system of health insurance exchanges to bring consumers and plans closer together, agents could still have a role to play.

House leaders have kept an amendment adopted previously that would keep agents in the game. On page 191, the bill states that nothing in the “health insurance exchange related provisions” section of the bill “shall be construed to affect the role of enrollment agents and brokers under State law, including with regard to the enrollment of individuals and employers in qualified health benefit plans including the public health insurance option.”

Health insurers have supported the idea that the government needs to require most people to have health coverage to reduce the risk of offering coverage on a guaranteed-issue, mostly community-rated basis.

H.R. 3962 has a “shared responsibility” section that would take effect in 2013 and covers both individuals and employers.

The individual responsibility section starts on page 296. It would impose a “tax on individuals without acceptable health care coverage.” For affected individuals, the tax would equal a maximum of the cost of the average health insurance premium or 2.5% of a taxpayer’s adjusted gross income for the year.

The individual responsibility provision has exclusions for non-resident aliens, individuals living outside the United States and individuals who seek a religious exemption from coverage requirements.

The employer responsibility section, which starts on page 308, would impose a tax equal to 8% of employee wages on employers over a minimum size that failed to provide health coverage. The payroll tax would be lower for employers with $500,000 to $750,000 in payroll, and 0% for employers with less than $500,000 in payroll costs.

Before the coverage mandates kicked in, a temporary government program would insure people turned down by private insurers because of medical problems.

Health insurers and medical malpractice insurers have been trying to ward efforts to end their access to the McCarran-Ferguson Act insurance antitrust exemption. In H.R. 3962, an exemption repeal provision starts on page 150. The provision states that nothing contained in McCarran-Ferguson “shall modify, impair, or supersede the operation of any of the antitrust laws with respect to price fixing, market allocation, or monopolization (or attempting to monopolize)” by health insurers or medical malpractice insurers.

But the provision, based on H.R. 3596, the House Judiciary Committee’s health antitrust exemption repeal bill, includes an amendment introduced by Rep. Dan Lungren, R-Calif., that states that repeal provision would not apply to collecting historical loss data; determinining a loss development factor; “performing actuarial services, if doing so does not involve a restraint of trade”; or the information or rate-setting activities of a state insurance regulator or other state regulator.

OTHER BILL PROVISONS:

H.R. 3962 would:

- Forbid plans from basing premiums or denials of care on factors such as pre-existing conditions, race, or gender.

- Limit use of age rating.

- Cap patients’ out-of-pocket expenses.

- Require health plans for children to cover dental, hearing and vision care.

- Require health plans offered through the exchange system, and, eventually, employer plans, to cover preventive care at no cost to the patient.

- Close the Medicare Part D prescription drug program “doughnut hole” — the coverage gap that enrollees experience when coverage for routine prescription expenses has run out but catastrophic coverage has not yet kicked in.

- Provide “affordability credits” to help individuals and families who meet income requirements pay their health insurance premiums, and provide health insurance subsidies for small businesses.

- Require the secretary of Health and Human Services to negotiate drug prices on behalf of Medicare beneficiaries.

- Expand Medicaid.

House Democratic leaders say they will pay for the new costs in the bill by making Medicare and Medicaid more efficient; imposing a 5.4% tax surcharge on individuals with adjusted gross incomes over $500,000 and married couples with adjusted gross incomes over $1 million; and adopting “other tax measures.”

THE SPONSOR TEAM

Dingell, who introduced the bill, is chairman emeritus of the House Energy and Commerce Committee. The current chairman of the committee, Rep. Henry Waxman, D-Calif., is one of the other lead sponsors of H.R. 3962.

The lead sponsor team also includes House Ways and Means Chairman Charles Rangel, D-N.Y., House Education and Labor Chairman George Miller, D-Calif.; and 3 subcommittee chairmen — Rep. Pete Stark, D-Calif.; Rep. Frank Pallone, D-N.J.; and Rep. Robert Andrews, D-N.J.

“We have the world’s best doctors and nurses, but because millions of our people have no access to the care they provide, we’ve become the unhealthiest industrialized nation on the globe,” Dingell says in a statement about the bill. “That is about to change because of H.R. 3962.”

THE CBO/JCT ANALYSIS

The projected effect of any health bill on the federal budget is a key factor this year, because the United States already is running a huge deficit, and many lawmakers say they will refuse to vote for a bill that seems to likely to make the deficit worse.

Analysts at the Congressional Budget Office and the Joint Committee on Taxation say they believe implementing the bill as written would cost $1.055 trillion over 10 years, but that spending cuts, revenue raisers and other bill provisions and effects would more than offset program costs. The bill could lead to a $104 billion net reduction in the deficit between 2010 and 2019, and, “in the subsequent decade, the collective effect of its provisions would probably be slight reductions in federal budget deficits,” the CBO and JCT analysts in a summary of their findings.

The $1.055 trillion spending total would include $425 billion in new spending on Medicaid and the Children’s Health Insurance Program, and $605 billion in subsidies for health insurance sold through the proposed exchange system.

Even after the bill was fully implemented, the country still might have about 18 million uninsured, non-elderly residents, including about 6 million “unauthorized immigrants” and 12 million citizens and legal residents, the analysts predict.

Insurers have complained that the CLASS Act LTC program appears not to be actuarially sound.

Starting in the decade following 2029, the program probably would start to run a deficit, but the deficit would be relatively small compared with the effects of other H.R. 3962 provisions, the analysts write.

CBO and JCT analysts warned that projections of the Senate Finance Committee health bill might not be accurate, because the bill includes a provision that would hold down the rate of increase in physician reimbursement rates. Congress has never been able to make that kind of provision stick, the analysts write.

H.R. 3962 also tries to reduce federal spending by reducing Medicare provider reimburseent rate increases, and “the long-term budgetary impact of H.R. 3962 could be quite different if those provisions generating savings were ultimately changed or not fully implemented,” the analysts write.

INDUSTRY REACTIONS

Karen Ignagni, president of America’s Health Insurance Plans, Washington, says “The promise of health care reform has been that if you like your current coverage you can keep it.”

AHIP members are concerned that this proposal will break this promise by increasing health care costs for families and employers across the country and significantly disrupting the quality coverage that millions of people rely on today, Ignagni says.

“The lack of system-wide cost containment is a missed opportunity,” she says.

Without a greater focus on health care costs, families and employers will not be able to afford coverage and health care costs will rise at a rate much faster than the overall economy is able to sustain, she says.

Tom Currey, president of the National Association of Insurance and Financial Advisors, Falls Church, Va., which includes AHIA, says his group has consistently opposed the creation of a government run health insurance option.

“No matter how well-intended the drafters of such a plan might be, a government-run plan would be positioned to compete against private sector plans on a decidedly unlevel playing field,” Currrey says.

Over time, Currey says, “this poses a grave risk that private sector health insurance would be driven from the market place – resulting in less competition rather than more. NAIFA supports a private sector solution to expanding health insurance coverage to people not now covered.”

Currey says one of the main goals of universal coverage is to encourage all people to buy insurance before they become sick or injured.

“Right now, NAIFA is very concerned that the consequences of not buying insurance before it is needed are not nearly strong enough to do the job of getting everyone into the insured pool,” Currey says. “Because of that, NAIFA is supporting measures to make the individual mandate more effective.”

Kelly Loussedes, a vice president at the National Association of Health Underwriters, Arlington, Va., says NAHU has the same concerns about H.R. 2692 that it has about the Senate health bill.

“By injecting more competition into the insurance market, this might seem like an intelligent way to lower overall health care costs,” Loussedes says.

A “public option” would simply shift health care costs onto private payers — and undermine the private insurance system, Loussedes says.

“We need to get health care right and including a public option in our health care reform efforts is a step in the wrong direction,” Loussedes says.