CBO Analyzes Cost Of "Bronze Plans"

Projections based on the final version of the Senate health bill "are likely to be similar but not identical" to the current projections, a CBO spokesman says.

The CBO predicted in a previous report that, under the terms of the Senate health plan, average 2016 premiums for all types of health policies might be about $5,800 for individuals and $15,200 for families.

Bronze plans would offer lower-cost coverage, with a lower actuarial value, than other types of plans on the market.

The actuarial value of the bronze plans would be about 60%, compared with an average of about 72% for all individual coverage, the CBO says.

The CBO also looks at the costs small employers might pay.

Insurers likely would charge small employers about as much for new policies as they would for policies sold through a proposed health insurance exchange system, the CBO says.

But, in most cases, "small employers would provide plans with a greater amount of coverage than under bronze plans, as they do under current law," the CBO says.

In other health bill news:

- Sources close to the negotiators who are trying to iron out differences between H.R. 3950 and H.R. 3962, the House health bill, say senators are deciding whether to accept the House language on proposed Medicare Advantage program cuts.

The House has proposed phasing in cuts over 3 years, while the Senate would phase in a competitive bidding system over 2 years, with some minor cuts made in 2011.

The final bill might give states with a high percentage of Medicare Advantage plan members extra flexibility, sources say.

- Lawyers in the Washington office of McDermott, Will & Emery say provisions in the House and Senate health bills could discourage employers from offering retiree health benefits, by eliminating a tax exemption now offered to sponsors of retiree prescription drug plans.

Elimination of the employer subsidy could affect both health insurers and producers, McDermott, Will lawyers write.

The proposed 40% Cadillac plan excise tax, which would be imposed on health insurers that sell high-value health benefits packages, also could increase the expense of offering retiree health benefits, the lawyers write.

A provision in the House health bill could make it more difficult for employers to change retiree health benefits once employees have retired.

"The inability to alter the benefits offered to retirees provides an incentive to decrease or eliminate retiree benefits so employers are not obligated to provide such coverage indefinitely," the lawyers write.

- Labor leaders are continuing to press President Obama to drop the proposed Cadillac plan tax.

One possible compromise: Negotiators could increase the minimum value of the benefits packages that would be subject to the tax, then make up the difference by applying the Medicare payroll tax to investment income.