H.R. 3962 - The House Health Bill - Weighs In At 1,990 Pages

- 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.