First is an Analysis of Life Provisions from American United for Life:
The new version of health care reform unveiled by Speaker of the House Nancy Pelosi fails to exclude abortion funding and coverage – in fact, it explicitly includes it. Below is AUL’s legal analysis of the abortion provisions in the bill, as well as an analysis of the conscience protection, Comparative Effectiveness Research, and End-of-life provisions in the bill.
The new House health care bill, H.R. 3962 includes the same problematic provisions found in the Capps Amendment added to H.R. 3200 (the former House health care reform bill). The new bill:
- Allows private health insurance plans that cover elective abortion to receive government subsidies (Section 222(e)(2)) (The bill also includes the Capps provision that purports to segregate the “federal dollars” from “private dollars” that are used to pay for abortions (Sections 303(e)(2); 341(c)(3)) – but nothing alters the fact that this provision allows government dollars to go to private plans that cover abortion);
- Permits the public option to include abortion coverage (Section 222(e)(3));
- Ensures that one plan in every coverage area covers abortion (Section 303(e)(1)(A)).
H.R. 3962 also states that funds provided for school-based clinics cannot be used for abortions (Sec. 399Z-1(c)(2))) and that school-based clinics are defined as not providing abortions (Sec. 399Z-1(l)(3)(E)). However, this provision does not prohibit abortion referrals.
Finally, Section 804 ties Indian Health Services (IHS) funding for abortion to the Hyde Amendment (added annually to the Health and Human Services (HHS) Appropriations Bill). Therefore, if the Hyde Amendment is not added to the HHS Bill in a given year, there will be no ban on abortion funding under the IHS.
II. Conscience Protection
Initially, H.R. 3962 appears to contain strong conscience protection. Section 259, entitled “nondiscrimination on abortion and respect for rights of conscience,” mirrors existing law, i.e., the clear protections for those who oppose abortion provided through the Hyde/Weldon conscience amendment (which must be added to an appropriations bill annually). However, Section 304(d) protects abortionists from “discrimination” by pro-life insurance plans who want to participate in the exchange, but do not want to contract with abortionists.
The question becomes how these two provisions will be reconciled. Section 259 provides that an insurance company cannot be discriminated against for not covering abortion. However, Section 304(d) provides that an “exchange participating plan” cannot discriminate against a health care provider/entity that provides abortions. Who wins – the abortion provider or the pro-life insurance company whose conscience prohibits them from contracting with abortionists?
III. Comparative Effectiveness Research
Section 1401 addresses the use of Comparative Effectiveness Research (CER). CER is used to compare the benefits and harms of methods to prevent, diagnose, treat, and monitor a clinical condition and improve delivery of health care. At AUL, we believe that any CER provision must include language to ensure that the results of CER will not be used to mandate or encourage the withdrawal or curtailment of effective life-sustaining treatment for the terminally ill, the chronically ill, or the permanently disabled.
Section 1401(h) provides that CER will not be used to “mandate coverage, reimbursement, or other policies for any public or private payer.” It also provides that none of the CER reports “shall be construed as mandates, for payment, coverage, or treatment.” Furthermore, the section provides that “nothing in this section shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine.” AUL continues to evaluate whether these provisions are sufficient to prevent the inappropriate use of CER.
IV. End of Life
Section 240 requires the dissemination of advance care (end of life) planning information by Qualified Health Benefits Plans (QHBP). Section (a)(3) provides that a QHBP “shall not promote suicide, assisted suicide, euthanasia, or mercy killing.” The information disseminated “shall not presume the withdrawal of treatment and shall include end-of-life planning information that includes options to maintain all or most medical interventions.”
Section 240(b) provides that nothing in this section shall be construed to require an individual to complete an advanced directive or a physician’s order for life sustaining treatment or other end-of-life planning documents, to require an individual to consent to restrictions in medical benefits, or to promote suicide, assisted suicide, euthanasia, or mercy killing.
Section (d)(1) prohibits materials distributed by QHBP’s from listing assisted suicide as an option. Section (d)(2) clarifies that nothing in (d)(1) applies or affects any options for withholding treatment, nutrition, palliative/hospice care. Finally, section (d)(3) provides that the bill doesn’t preempt state laws.
While these protections appear strong, H.R. 3962 does not provide definitions for terms such as “assisted suicide,” and the broader language that included a prohibition on providing materials that promoted the intentional “hastening of death” which was adopted in the Energy and Commerce Committee was removed from H.R. 3962. Broader language is necessary because while Oregon and Washington have laws permitting assisted suicide, the laws state that what they permit is not assisted suicide. Language must me explicit and broad to ensure that this provision does not create a large loophole for the promotion of assisted suicide.
Section 1233 creates “advance care planning consultations” as a new optional Medicare-covered benefit. The consultation must be between a physician or other health care professional and the patient, and may be conducted every five years or more often if the patient’s condition deteriorates.
The section specifies that “[n]othing in this section shall–…encourage the promotion of suicide or assisted suicide.” However, this section, like Section 240, fails to define “assisted suicide.” Therefore, states that have legalized assisted suicide by another name may argue that Medicare should pay for end-of-life counseling that includes assisted suicide as an option (under another name, like “death with dignity”).
There are two good provisions relating to abortion in the bill — Section 222(e)(1) prohibits the Health Benefits Advisory Committee from recommending the inclusion of abortion or the Secretary from including such services in the minimum benefits package, and the commissioner may not require such services for a qualified health benefits plan to participate in the exchange. Also, Sections 258(a) and (b) provide that there is no preemption of state laws on abortion or of federal protections for conscience.
From Life And Health, National Underwriter comes these tidbits including that Rep. John Dingell is attaching on a Bio-fuels credit(?) as a part of amendment. What that has to do with anything in this bill you've got me.
Rep. John Dingell has filed a "manager's amendment" to the main House health bill that could affect health insurers' ability to increase rates starting in 2010.
Dingell, D-Mich., is one of the lead sponsors of H.R. 3962, the 1,990-page Affordable Health Care for America Act bill.
The manager’s amendment to the AHCAA bill will add another 42 pages.
For health insurers, one amendment section of interest is Section 104, which relates to “Sunshine On Price Gouging By Health Insurance Issuers.”
The section authorizes the U.S. secretary of Health and Human Services to work with the states to set up a process for reviewing proposed health insruance rate increases starting in 2010.
“Such process shall require health insurance issuers to submit a justification for any premium increase prior to implementation of the increase,” according to the amendment text. “Such issuers shall prominently post such information on their websites. The Secretary shall ensure the public disclosure of information on such increases and justifications for all health insurance issuers.”If a state insurance commissioner finds that a health insurer has a pattern of imposing “excessive or unjustified premium increases,” the insurer could be shut out of the proposed “health insurance exchange” program, according to the amendment text.
H.R. 3962 calls for using a new health insurance exchange system to help individuals and small groups shop for standardized health insurance plans. The exchange also would help administer a health insurance premium subsidy program.
The Section 104 provision would let the HHS secretary give states up to $1 billion in rate review program grants during a 5-year period that would start in 2010.
Here are some of the other provisions in the manager’s amendment:
- Section 555, which starts on page 14, would create a “second generation biofuel producer credit.”
- A section that starts on page 9 appears to incorporate the text of a measure proposed by Rep. Dan Lungren, R-Calif., that would limit the effects of a health care antitrust provision. The provision would block health insurers and medical malpractice insurers from using the insurance industry antitrust exemption in the McCarran-Ferguson Act. The Lungren measure would ensure that insurerers could continue to work together to collect historical loss data and determine loss development factors based on historical loss data. Actuaries could perform actuarial services if doing so did not involve restraint of trade.
- Section 2538, which starts on page 31, calls for the HHS secretary to establish a program that would provide mental health screening, treatment and referral services for individuals in primary care settings. The HHS could create and run the program by awarding grants to, or entering into contracts or cooperative agreements with, a “public or private nonprofit entity” that “provides primary health services” and “seeks to integrate mental health and substance abuse services into its service system.”
- Section 1707A, which starts on page 35, would have the government create offices of minority health at the U.S. Centers for Disease Control and Prevention, the Substance Abuse and Mental Health Services Administration, the Agency for Health Care Research and Quality, the Health Resources and Services Administration, and the Food and Drug Administration.
- Section 2594, which starts on page 39, would start a diabetes screening collaboration and outreach program that could involve trade groups and professional societies.
From the Congressional Budget office we find that Most of the supposed cost saving is smoke and mirrors.
The Congressional Budget Office says even low-end health coverage would still be expensive if the House health bill worked as expected, and that repealing health insurers’ “antitrust exemption” would do little to cut costs.
CBO analysts have come to those conclusions in reports generated at the request of the lawmakers who are reviewing H.R. 3962, the Affordable Health Care for America Act bill.
In one report, the analysts answer a question from House Ways and Means Chairman Charles Rangel, D-N.Y., about what enrollees would pay for coverage if they bought a “relatively low cost plan” through the new health insurance exchange system that H.R. 3962 would set up.
The House bill would provide subsidies for eligible individuals and families earning less than 400% of the federal poverty level, and the bill would adjust the eligibility levels for inflation.
For taxpayers who earn more than 400% of the FPL and are not eligible for subsidies, the cost of coverage would be high in a post-H.R. 3962 world.Individuals earning $50,100 per year, for example, or 425% of the FPL, would pay about $5,300 per year in premiums, and they would be responsible for an average of $2,000 per year in deductibles, co-payments and other “cost sharing,” according to CBO estimates.
A family of four earning 425% of the FPL -- $102,100 per year – could expect to pay $15,000 per year for coverage and take responsibility for an average of $5,500 per year in cost-sharing, the CBO estimates.
But House leaders contend that the full, unsubsidized cost of the coverage is lower than it would be if the country fails to implement a health reform bill.
The $15,000 annual premium bill for a family of four “is well below the $24,000 family premium expected if Congress fails to act and premiums grow as projected under current law,” House leaders say.
Meanwhile, the CBO has released another report stating that repealing the limited antitrust exemption accorded health insurers and medical malpractice insurers under the McCarran-Ferguson Act “will have no significant effect” on the premiums charged for private health insurance.
The H.R. 3962 antitrust repeal provision would offer “safe harbors” for some joint industry activities, such as compilation of historic loss data, and insurance groups say antitrust repeal proponents have exaggerated the effect of the existing provision on market concentration.
Based on information from the Justice Department, the Federal Trade Commission, consumer groups, private attorneys and the National Association of Insurance Commissioners, Kansas City, Mo., the CBO estimates that the effect of the H.R. 3962 antitrust repeal provision “would be very small, and thus that enacting the legislation would have no significant effect on the premiums that private insurers would charge for health insurance.”
If the bill would prevent insurers from engaging in prohibited practices, it might do something to lower premiums, the CBO says.
But “that effect is likely to be small because state laws already bar the activities that would be prohibited under federal law if this bill was enacted,” the CBO says.The CBO analysis refutes claims by consumer groups that antitrust repeal could cut insurance costs by 20%, according to the Physician Insurers Association of America, Rockville, Md., which represents medical malpractice insurers owned by physicians’ groups.
From the MFIB
1. Employer Mandate
The bill includes an employer mandate that will require employers to offer healthcare to full-time and part-time employees. An employer mandate does not address the No. 1 issue facing small businesses: unsustainable costs.
2. Payroll Tax Penalty
Payroll taxes are an especially onerous tax because they tax labor. No matter how profitable or unprofitable a business might be, they are forced to pay this tax. The legislation requires that all employers with a payroll of $500,000 or more pay a payroll tax of up to 8 percent if they do not provide “qualified” health insurance to their employees.
3. Pay-or-Play, Pay-and-Pay and Offer-and-Pay
The legislation establishes a confusing multi-part test that hits both employers who do and do not offer health insurance.
A non-offering employer will pay a payroll tax of either 2, 4, 6 or 8 percent.
Offering Employers must meet all of the following:
A. Offer “qualified” individual and family coverage
B. Meet premium contribution requirements of at least
a. 72.5% for individuals and
b. 65% for family plans
C. Offer a “qualified” plan as defined by a government-appointed board
* If an employee declines coverage from their employer, and is able to obtain coverage in the exchange, then the employer must pay a payroll tax penalty of up to 8 percent.
* If an employer (unknowingly) offers coverage other than the “qualified” plan, they can be assessed a penalty of up to $500,000 a year ($100 per day).
4. A “Minimum” Plan with a Big Price Tag and New Mandates
Today, among firms of 3 to 199 workers, 86 percent who offer coverage offer only one plan. H.R. 3962 gives a political board the power to define “coverage” and will determine whether an employer plan is “acceptable.” The bill does nothing to ensure that the new plans will be less costly than what small employers are paying today and even requires some small employers to cover benefits that are not currently mandated under federal law.
5. Government-Run Public Option
The public option outlined in H.R. 3962 fails to deliver what small employers have long sought – a reformed, private insurance marketplace that can provide businesses and employees with more affordable coverage and a sustainable choice of plans. Instead, the public option is an “easy way out” for legislators who decided to simply grow the size of government. NFIB is deeply concerned that a “public option” will further compromise the viability of private insurance and restrict choice to a single plan: the government-run plan, which will ultimately be funded on the backs of small businesses.
6. New Onerous Reporting Requirements
H.R. 3962 places a new tax-compliance paperwork burden on all small businesses. Called “corporate reporting,” this expansion of the current information reporting requirements increases the cost of operating a small business and diverts resources away from growing the business and creating jobs. Tax paperwork is already the most expensive paperwork burden the federal government places on small business – costing small employers more than $83 an hour These new requirements will only add additional costs to already struggling small businesses.
7. The Surtax: A Tax on Job Creation
Seventy-five (75) percent of small businesses are structured as pass through entities and pay their business taxes at the individual level. More than one-third of small businesses employing 20 to 250 employees would face the proposed surtax. When added to upcoming expected tax increases (like the expiration of the 2001 and 2003 tax cuts), the overall federal tax rate for these businesses will be 45 percent, which is 10 percent higher than the current corporate tax rate. Finally, since the tax is not indexed for inflation, the tax will affect more and more businesses each year.
8. Jeopardizes Existing Solutions for Small Business
H.R. 3962 prohibits individuals from using HSA, MSA and HRA funds to purchase over-the-counter health products (except for insulin). This further limits the utility of this health insurance option, making it harder for people to “keep what they have.” The bill also limits contributions to FSAs and increases penalties on non-medical HSA withdrawals.
9. An Employer Tax Credit with Limited Value
While some small businesses can be helped by tax credits, the structure of the credit is critical to its success. The small employer tax credit is limited to small businesses with 25 or fewer employees. To qualify for the credit the employer would be required to pay for 50 percent of their employees’ premium, the firm would have to have an average annual compensation per worker of $20,000 or less to get the full subsidy, and the credit would phase out at $40,000. U.S. Census data from 2007 notes that the average wage of full-time employees at businesses with fewer than 10 employees is more than $30,000, meaning that in many cases the value of the credit is already cut in half.
10. Auto-Enroll Mandate
The auto-enroll mandate requires employers offering healthcare to auto-enroll employees into that healthcare plan. This burden will mean that the employer must develop a new system to ensure that employees are either enrolled in the plan or are informed about how they may opt out. Unlike larger firms, small businesses are less likely to have an HR department to handle new mandates like this, meaning that resources would need to be diverted from the day-to-day operations of the business to comply with this requirement.
11. All Powerful Insurance Commissioner
The unelected commissioner will have unbridled authority to institute rules and regulations
that greatly affect small employers, including the ability to define the terms: employer, employee, full-time and part-time employee. The commissioner will also be able to establish “counting rules.” These thresholds would be subject to continual changes, leaving small business owners in constant fear of ever-changing compliance requirements and more mandates.
12. You Can’t “Keep What You Have…”
Despite assurances from elected officials and pundits, H.R. 3962 sets forth a new standard for what qualifies as employer-based coverage and requires all employer plans to meet that standard within a five-year period. While you may “keep what you have” now, you probably can’t keep it forever.
13. Creates New and Expands Existing Government Programs
H.R. 3962 provides multiple examples of new government programs and expansions of current programs. From increasing the Medicaid program to creating a new government pool for the pre-Medicare population to creating a government-run public option to establishing government-run boards to define “acceptable” health benefits, the massive growth squeezes out private options, increases costs and expands reliance on the government.
14. Small Employers Exposed to More Lawsuits
Throughout the text of H.R. 3962 there are “rules of construction” that provide “green lights” for trial lawyers seeking to file lawsuits against small employers.
15. Studies that Paint a Grim Future For Small Employers
A number of government studies are laid out in H.R. 3962, including: a study to “recommend that laws don’t incentivize small and mid-size employers to self-insure” (p. 98), and a study allowing for recommendations to “improve and strengthen employer-based health plans sponsorship, employer responsibility…that would enhance the delivery of health care benefits between employers and employees” (p. 278). These studies are both costly and create a pathway for more government involvement in the workplace.
I hope this clears the air on what is actually being proposed here. I will post more as I read and find.