Summary Comparison of Selected Health

<, . 94-185 EPW CRS Re:~ort for Congress Summary Comparison of Selected Health Care Reform Bills Health Section Education and Public Welfare Division March 2, 1994 Congressional Research Service The Library of Congress $p&y$~;: & ., + $;& , #;.$: &~~&p%$~~&$> u . m r,V: - - . . ~'l.& ~-,=~ .r<c:*p$&;&;:n c< &$$& . ; ~ ~ ~ & $ $ ? > , ~ ~ \ ~ ~ ~ : . j ,~ >!. , .. . . IIIIIIIIll!Ill1OIIII RII Ill1Ill1 SUMMARY COMPARISON O F SELECTED IIEALTJI CAILE REFORM I31LLS SUMMARY A wide range of legislative proposals have been introduced in the 103rd Congress for expanding access to health insurance. This report summarizes, in a conlparative format, seven proposals t h a t elnbody different viewpoints on the issue. Together, they represent a spectrum of approaches, ranging froni those that would rely on tax incentives or other assistance for individual insurance purchasers, to mandating employer contributions to health prenlium mts, to establishing a national health insurance system. The following bills have been included in this side-by-side comparison: 13.R. 36001s. 1757 ( P r e s i d e n t Clinton's p l a n ) would require all persons to obtain a coniprehensive health benefits package from large insurance purchasingcooperatives called health alliances. Health plan pren~iumswould be paid through a combination of employer and individual contributions, supplemented by Federal subsidies for many firnls, early retirees, and persons with incomes below certain levels. A national health care budget would be established for expe~idituresfor services covered under the conlprehensive package. This budget would limit both initial premiums and the year-to-year rates of increase that could be charged by health plans participating in the alliances. Ultimately premiums could grow no faster than the rate of growth in per capita gross domestic product, unless Congress specifies a different inflation factor. 13.R. 1200lS. 491 (McDerrnott/Wellstone) would establish a single-payer national health insurance program that would be federally mandated and administered by the States. This program would replace private health insurance and public program coverage. The program would provide coverage of comprehensive health and long-term care benefits. A national board would establish a national health budget which would be distributed among the States, based on the national average per capita cost of covered services, adjusted for differences among the States in costs a n d the health status of their populations. H.R. 3080lS.1533 ( M i c h e l b t t ) is an incremental proposal that seeks to improve the availability and affordability of insurance. All employers would be required to offer, but not pay for, a basic health benefit plan. T h e proposal includes regulation of underwriting and rating practices in the small group market and requirements that insurers offer three different health plans a n d portability of coverage. I t also includes measures to encourage development of multiple employer purchasing groups. lI.R. 32221s. 1579 (Cooper/LIreaux) also seeks to improve the availability and affordability of insurnnce but within a managed conlpetition structure. States would establish health plan purchasing cooperatives (HPPCs) that would contract with accountable health plans (AHPSI. Al1Ps would be required to cover a ulliforlll set ofbe11efit.s and col~lplywith prenliu~llrating and underwriting standards. All enlployers would be required to offer, but not pay for, coverage in an AHP. Snlall enlployers with 100 or fewer enlployees would have to participate in the HPPC; larger employers could offer their own N I P . Health plan expenses would be tax deductible up to the cost of the lowest-cost basic plan in the area. An excise tax would be imposed on employer contributions in excess of this level. 1I.R. 369818.1743 (Stcarns/Nickles) resembles the Heritage Foundation's health reform proposal. All persons would be required to purchase health insurance through a plan meeting Federal standards relating to minimum benefits and rating and underwriting practices, or through a State-established health plan. Current tax exclusions for employer-sponsored health plans would be replaced with refundable tax credits for o portion of the premium cost of qualified health insurance plans and for other medical expenses. Employers currently providing health benefits would be required to convert them into added wages. H.R. 3704lS.1770 (W.ThomaslChafee) would require all persons to purchase coverage through a qualified health plan, or face a penalty for noncompliance. All employers would be required to offer their employees enrollment in a qualified health plan, o r face a penalty for noncompliance. No employer, however, would be required to make contributions for coverage of an employee. Small employers and individuals could participate voluntarily in State-established purchasing cooperatives or select other qualified plans. All plans would have to offer standard benefits and would be subject to restrictions on rating and underwriting practices. Federal subsidies in the form of vouchers would be phased-in for low-income persons, subject to savings being achieved under the Medicare and Medicaid programs. H.R. 39181s. 1807 ( S a n t o r u m l G r a m m ) is a n incremental proposal that seeks to improve the availability and affordability of insurance. New Federal tax exclusions, deductions, and refundable credits would be made available to individuals for the purchase of health insurance and/or for contributions to medical savings accounts. The proposal would also prohibit certain insurance underwriting practices, and would subsidize premium expenses for certain persons with preexisting conditions. Phase-in of new Federal subsidies would be contingent on the achievement of Federal savings under the Medicare and Medicaid programs. TABLE OF CONTENTS v. VI . VII . VIII . GENERALAI'I'ROACIi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 ADMINI~'l"Rf4'l"IVE~ T R U C T U R E. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 A. FederalRole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 I3. StateRole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 C . EmployerRole . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 D . Employeeflndividual Role . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . g PURCHASING A L L I A N C E S I C O O P E R A T ~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 A. Regional AlliancesICooperatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 B . Treatment of Large Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 A . In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 B . Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 C . Employeeflndividual . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 D . Federal Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . 18 E . Limitation on Federal Subsidies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 F . Statepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 G . Federal Revenues, Tax Expenditures, and Savings . . . . . . . . . . . . . . . . . . . . . . . . . . 22 1. FederalRevenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 2. Tax Code Changes: Employers, Employees, and Health Plans . . . . . . . . . . . . . . . 24 3 . Federal Program Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 BENEFICIARY COST-SHARING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 PROVIDERPAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 EXPENDITURE TARGETS AND PREMIUM REGULATION . . . . . . . . . . . . . . . . . . . . 41 A. ExpenditureTargets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 B . Premium Targets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 PRIVATE HEALTH INSURANCE REFORM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 A. General Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 B . Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 C . Portability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 D . RatingRestrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 E . Risk Adjustment and Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 F . OtllerRequirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 ADMINISTRATIVE SIMPLIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 A . overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64 XI1. XI11. XIV . xv. XVI . XVII . I3 . Unique Identifier Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 C . Health Security c a r d s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68 D . Confidentiality of Health Care Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(;g E . State ~ u i l pen l ~ a w s. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 MALPRACTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 A . TortReforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 B . Akernative Dispute Resolution (ADR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 C . Practice Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 D . Enterprise Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 ANTI-TRUST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 QUALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 FRAUD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8. 1 MEDICARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 A . Medicare and Revised System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 B . New Medicare Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 C . Reductions in Medicare Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87 MEDICAID . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 LONG-TERMCARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 A . New Federal Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 B. Medicaid and Long-Term Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 C Private Long-Term Care Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 1. Tax Code Clarifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 2 . Long-Term Care Insurance Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 D . O t h e r P r o ~ i s i o n.~. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 OTHER FEDERAL PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 A. Military Health Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 B . DepartmentofVeteransAffair~ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 C . Federal Employees Health Benefits Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 D. Indian Health Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 UNDERSERVED AREAS/POPULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 HEALTH PROFESSIONS EDUCATION AND TRAINING . . . . . . . . . . . . . . . . . . . . . . 107 A . Graduate Medical Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .107 B . Health Professions Education and Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110 . XIX . XX . A number of individuals a t CRS contributed to this document . Richard Price served as project manager . Others contributing included Phillip Brogsdale, Waymond Elliott, Melvina Ford. Celinda Franco. Beth Fuchs. Shelley Harlan. Janet Kline. Mark Merlis. Jennifer O'Sullivan. and Mallary Stouffer . SUMMARY COMPARISON O F SELECTED I'1JWLTII CARE REFORM BILLS I1.R. 36001s. 1757 ( h d m i n i s t r a t i o n plan) H.R. 12001s. 491 (McDermott/Wellstone) I. GENERAL AFPROACII I. GENERAL APPROACII I. GENERAL APPROACII I. GENERAL APPROACII NI U.S. citizens and legal residents would be required to obtain a comprehensive health benefits package from large insurance purchasing cooperatives called health alliances. Large employers with more than 5,000 employees could establish their own alliances. States could provide the comprehensive benefits through a single-payer system. All U.S. citizens and legal residents would be entitled to coverage of comprehensive health and long-term care benefits through a federally established national health insurance program administered by the States. This program would replace private health insurance, Medicare, Medicaid, and other Federal health programs. All employers (excluding certain new and small employers) would be required to offer employees a group health plan that covers essential and medically necessary medical, surgical, hospital, and preventive services. Employer~fferedgroup plans would be required to limit the use of preexisting condition exclusions and provide portability and renewability protections. No employer, however, would be required to make contributions to the cost of coverage under a plan. All U.S. citizens and legal residents would be eligible to enroll in accountable health plans (AHPs). AHPs would be required to cover a uniform set of benefits and comply with premium rating standards and limit preexisting condition restrictions. A Health Care Standards Commission (National Health Board under S. 1579) would make recommendations to Congress on a uniform set of benefits, including cost sharing. Only State-certified health plans could provide coverage through t h e alliances. Ilealth plans would be required to accept every eligible person enrolled by an alliance rind could not inipose preexisting coverage restrictions. Premiunis for these plntls would have to be coilin~unity-rated. Ilealth plan prenliunls would be paid through a coilibii~ationof enlployer and individual All policies regarding implementation of the program would be established a t the Federal level by a Health Security Standards Board. This Board would also establish a national health budget which would be distributed among the States, based on the national average per capita cost of covered services, adjusted for differences anlong the States in costs and the health Insurers selling insurance to small employers (defined as having 2 to 50 employees) would be required to offer a standard benefits plan, a catastrophic plan, and a medical savings account option (that iiicludes catastrophic coverage and a medical Small employers (defined as firms having 100 or fewer employees) would be required to enter into agreements with health plan purchasing cooperatives (HPPCs) for offering their employees coverage. Larger employers would have to offer a plan (which could be a "closed" plan available only to that All residents of a State (who are not beneficiaries of other Federal programs) would be required to purchase federally qualified health insurance or be covered under a State program that provides equivalent coverage. Qualified health insurance plans would be required to cover all medically necessary acute medical care; have premiums that varied only on the basis of age, sex, and geography; guarantee coverage to all persons seeking enrollment; and limit preexisting condition exclusions. Current tax exclusions for employer-sponsored health plans would be replaced with refundable tax credits for a portion of the premium cost of qualified health insurance plans and for other nledical expenses. At a niininium, tax I. GENERAL APPROACH I. GENERAL APPROACH All U S. citizens and legal residents would be required to purchase coverage through a qualified health plan. All eniployers would be required to offer their employees enrollnient in a qualified health plan. Small employers with 100 or fewer employees could either join a purchasing group or offer standard or catastrophic benefits through a qualified health plan. Large employers would be required to offer both a standard and catastrophic benefit package, and could form their own purchasing groups, arrange coverage from a qualified plan, or selfinsure. No employer would be required to make contributions for coverage of an employee. Employers would be required to offer employees three options for health insurance and to niake equal contributions to the plan selected by the employee, in order for group health plan expenses to be tax deductible. Employers, however, would not be required to make contributions to employees' health insurance coverage. All qualified plans would have to cover benefits reconinlended by the Premiums for a health plan andlor medical savings account contributions would be excluded from taxable income for all persons (including the self employed) not eligible for employer-paid coverage. Refundable tax credits for coverage would catastrophic insurance be available for persons with incon~esbelow 200 percent of the Federal poverty level and not 1I.R. 36001s. 1757 (Adminlslratlon plan) contributions, supplenlented by Federal subsidies for many firms, early retirees, and persons with incomes below certain levels. Current Medicare beneficiaries would continue to be covered under the program as they are today, except that the working aged would continue to be covered under their employer-paid plans. Persons enrolled in an alliance managed care plan before becoming Medicare eligible could, on turning 65, choose to remain in the plan and receive benefits through it. States would have the .tion of integrating P* .wcified 'odicare health -;tied - H.R. 12001s. 491 (McDermott/Wellstone) status of their populations. With their allocations, States would make payments to providers according to prospective budgets or fee schedules negotiated between States and providers. States could also make payments to comprehensive health service organizations based on their budgets or on risk-adjusted capitation payments. Services would be financed by a combination of new individual and corporate taxes and premiums, and additional tax code changes. H.R. 32221s. 1579 (Cooper/Breaux) savings account to pay for unreimbursed medical expenses). Insurers would be required to accept every small employer and every eligible employee of a small employer who applies for coverage under a plan. Insurers would be required to limit premium variations charged to small businesses and also to limit premium increases from 1year to the next. The bill also facilitates the ability of employers to form groups for the purpose of purchasing health coverage. The deductibility of health insurance premiums would be increased for the self-employed and those not receiving employer-sponsored coverage. Medicare would continue to cover persons as it does today. States would be given the option of allowing Medicaid beneficiaries to enroll in private insurance plans. SL?tes firm's employees) directly, rather than through the HPPC. No employer, howeter, would be required to make contributions for coverage of an employee in an accountable health plan. Health plan expenses would be tax deductible up to the cost of the lowest-cost basic plan in the area. An excise tax would be imposed on employer contributions in excess of this level. The tax deductibility of health insurance premiums for the selfemployed would be increased and individuals who pay any part of an AHP premium would be able to deduct their payments. Federal subsidies would be available for providing premium and copayment assistance to persons with incomes below 200 percent of the State's poverty level; this assistance would replace the acute care credits would be equal to 25 percent of the premium and unreimbursed medical care expenses for those persons whose expenses amounted to less than 10 percent of their gross incomes. Tax credits would increase as vremium and medical care expenses increased as a proportion of a person's income. Medical savings accounts established for the purpose of paying medical expenses would also be eligible for a tax credit. Employers would be required to add the value of the coverage they paid for as of December 1996 to employee wages beginning January 1997. Persons receiving health benefits under Medicare, Medicaid, and other Federal health programs would not be eligible for these tax credits. A new Federal program of grants to the States would assist persons with incomes below 150 percent of the Federnl Benefits Commission. They would be required to limit variations in premiums and would be required to limit preexisting condition exclusions. Health insurance premiums would be deductible for qualified plans up to a capped amount. A taxfavored medical savings account would be available for those individuals electing a catastrophic benefit plan in order to pay cost sharing expenses. Federal subsidies in the form of vouchers would be phased-in for lowincome persons, subject to savings being achieved under the Medicare and Medicaid programs. States would have the option of providing coverage to Medicaid beneficiaries through a private purchasing cooperative, a nianaged care plan, or other alternative. The Secretary of Health and Human Services (HHS) would develop a I~gislativeproposal for eligible for Medicaid or Medicare. Insurers and employers would generally be prohibited from canceling health insurance plans or denying renewals of coverage. Individuals could purchase new individual policies and groups could move from group to individual plans without being denied coverage because of preexisting conditions or health status. A new Federal program of grants would be available to those States that chose to establish insurance pools for providing premium assistance to persons who have preexisting coverage and who are unable to afford catastrophic insurance coverage. Medicare would continue to cover persons as it does today, or beneficiaries could elect to have Medicare make payments for their enrollnlent in a 1I.R. 3600/S. 1757 (Adminisiration plan) noncash Medicaid beneficiaries would enroll in plans through nlliances, with most presumably qualifying for Federal subsidies. By January 1, 1998, every eligible person would be insured through t h e new system or existing Federal programs. A national health care budget would be established by a National Health Board for expenditures for services covered under the comprehensive package. This budget would limit both initial premiums and t h e yearto-year rates of increase that could be charged by health plans participating in the alliances. Ultimately premiums could grow no faster than per capita gross don~esticproduct IGUPI, unless Congress specifics a dimerent inflnt.ion factor. 1I.R. 1200/S. 491 (McDermoit~Wellstone) 1I.R. 3080/S. 1533 H.R. 32221s. 1579 (MlcheVLott) (CooperlBreaux) establishing "health allowance programs" for this purpose could also extend Medicaid coverage to persons with higher incomes and others without insurance coverage. portion of Medicaid. Federal payments to the States for the long-term care component of Medicaid would be phased out. Medicare would continue to cover persons as it does today. New Federal costs would be financed through Medicare spending reductions, a n increase in the regular civil service retirement age, and a requirement t h a t Federal agencies prefund Federal retiree health benefits. New Federal costs would be financed by capping the employer deductibility of health insurance premiums, reducing Medicare spending, and requiring Federal agencies to prefund Federal retiree health benefits. 1I.R. 3698/S. 1743 (SiearnsMlckles) poverty level to meet the costs of health insurance, acute medical care, and preventive services. Medicare would continue to cover persons as it does today. New Federal costs would be financed through Medicare and Medicaid spending reductions (and, under H.R. 3698, elimination of welfare benefits for most noncitizens). 1I.R. 3704/S. 1770 (W. ThomasIChafee) enrollment of Medicare beneficiaries into qualified health plans. Current Medicare beneficiaries would have the option of obtaining services through their current arrangements or enrolling in qualified health plans with certain maximum Federal payments made toward the premium costs of those plans. If the vouchers for low income persons are fully phased in, all persons would be insured by 2005. New Federal costs would be financed through Medicare and Medicaid spending reductions. 1I.R. 3918/S. 1807 (Saniorum/Cramm) managed care plan or another private insurance plan, including a catastrophic plan with a n MSA. Beginning in FY 1995, growth in per capita Federal Medicaid payments to the States for acute and long-term care services would be limited to t h e percentage change in the medical care component of consumer price index (CPI); States would have to continue to cover all categories of persons eligible for Medicaid in FY 1993. Refundable tax credits, new Federal tax exclusions for health insurance coverage, and premium assistance for persons with preexisting conditions could be delayed, if Medicare and Medicaid expenditure targets were exceeded. I1.R. 36001s. 1757 (Administration plan) on corporate alliances, reductions in spending in existing Federal programs, and tax code changes. H.R. 12001S. 491 (McDermott/Wellstone) 1I.R. 30801s. 1533 (MicheULott) 1I.R. 32221s. 1579 (CooperlBreaux) 1I.R. 36981s. 1743 (SicarnslNickles) 1I.R. 37041s. 1770 (W. ThomasIChafee) H . R 39181s. 1807 (Santorurn/Gramm) R.R. 1200/S. 491 (McDermott/Wellstone) H.R. 3080/S. 1533 (MlcheUtott) H.R. 32221s. 1579 (Admlnlstratlon plan) 11. ADMINISTMTIVE STRUCTURE 11. ADMINISTRATIVE STRUCTURE 11. ADMINISTRATIVE STRUCTURE 11. ADMINISTRATIVE STRUCTURE 11. ADMINISTMTIVE STRUCTURE 11. ADMlNlSTRnTlVE STRUCTURE 11. ADMINISTRATIVE STRUCTURE A. Federal Role A. Federal Role A. Federal Role A. Federal Role A. Federal Role A. Federal Role A. Federal Role The Federal Government would establish standards for the regional and corporate alliances, set alliance-specific budgets, and oversee t h e system's operation through a newly established National Health Board and existing Federal departments. The Board would issue regulations prescribing requirements for State programs, including the regional alliances, and review and approve State plans. It would interpret and update the comprehensive benefit package and recommend changes to reflect changes in technology nnd other factors. It would develop and enforce national alliance budgets. It would establish a riskatljustment systrm to he ilsrd 1~ t h e alliarlces t.0 An American Health The Secretary of HHS would be required to request the National Association of Insurance Commissioners (NAIC) to develop standards for health insurance plans, and if it fails to do so within the time specified or the Secretary finds them inadequate, the Secretary would be required to specify these standards. If the Secretary finds that a State has not implemented and provided adequate enforcement of the standards, then the Secretary would be required to provide for a mechanism for the implementation and enforcement of the standards. The Secretary would play a similar role in developing models for reinsurance or allocation of risk mechanisms for health A newly established Health Care Standards Commission (National Health Board under S.1579) would be required to make recommendations to Congress for a uniform set of effective benefits, including cost sharing. The Commission would be required to register health plans meeting specified standards as AHPs. It would be required to organize a Benefits, Evaluations, and Data Standards (BEDS) Board that would make recommendations to the Commission about the uniform set of benefits; the standards for information to be provided by health plans; auditing standards to ensure accuracy of this information; and aggregate data on coverage decisions made The Secretary of HHS, in consultation with NAIC, would be required to develop standards for qualified health plans and procedures for certifgng that plans meet the standards. The Secretary would be required to review State regulatory programs for enforcing standards and assume responsibility for enforcement in States that fail to assure that plans meet standards. The Secretary would also be required to provide grants to the States to assist persons with incomes below 150 percent of the Federal poverty level to meet the costs of health insurance and health services. A newly established Benefits Commission would be required to make recommendations to Congress on the types of services and items to be covered under a qualified health plan for both standard and catastrophic packages, as well as cost sharing required under both packages. Changes to the package could be recommended to Congress once a year. The Commission could also submit a proposal to Congress concerning changes necessary to achieve savings needed for vouchers for lowincome persons. The Secretary of HHS would be required to carry out activities for certifying health plans offered by a multi-State employer. The Secretary would also carry out all activities related to certifying health plans The Secretary of HHS would establish and administer a program to provide allotments to States to enable them to operate insurance risk pools to provide health insurance coverage to individuals who have preexisting conditions and who can not afford coverage. The Secretary would be required to promulgate regulations for implementing refundable tax credits for catastrophic coverage for persons not eligible for Medicaid or Medicare and with income below 200 percent of the Federal poverty level. Security Standards Board would be required to develop policies, procedures, and guidelines related to eligibility, enrollment, benefits, provider participation standards, national and State funding levels, methods for determining payments to providers, the determination of medical necessity and appropriateness with respect to coverage of certain services, assisting States with planning for capital expenditures and service delivery, planning for health professions education funding, allocating funds for the promotion of primary care and assisting the medically underserved, and encouraging States to develop regional planning mechanis~ns. The Board would also 1I.R 37041s. 1770 (W. ThomasIChafee) H.R. 3918lS. 1807 (SantorumlGramm) 11.R. 360015. 1757 (Admlnlatratlon plan) I1.R. 36981s. 1743 (Stearns/Nlckles) I1.R. 370415. 1770 (W. ~homaslChafee) R . R 39181s. 1807 (SantorudCramm) adjust premiums to reflect t h e different mix of high- and low-risk individuals in the plans. It would establish and manage a performancebased system of quality management and improvement. HHS would audit regional alliance performance. The Department. of Lnbor would be responsible for enforcing requirements applicable to employers under regional health alliances and the administration of corporate alliances. establish a national health security budget which would specify total expenditures available for covered services and how these expenditures would be allocated to the States. The Board would be required to establish uniform reporting requirements and standards to ensure an adequate national data base regarding health services practitioners, services and finances of State health security programs, approved plans, providers, and the costs of facilities and practitioners providing services. The Board would review and approve State plans for providing health services to its residents. The Board would also provide funds to the Public Health Service for various direct health block grant programs. insurance plans offered to small employers. by health plans and recommendations for evaluations of particular technologies. The Commission would be required to organize a Health Plan Standards Board to make recommendations about standards for AHPs. The Commission would be required to establish rules for the risk adjustment of premiums by HPPCs. The Commission would also be required to establish standards for identifying chronically underserved areas which have inadequate access to the uniform set of benefits, insufficient price competition for services, and poor quality of care. B. State Role B. State Role B. State Role B. State Role B. State Itole B. State Role B. State Role States would be rcquired to sub~iiitt.0 the National Health States would be required to submit to the Board a plan for States would be required to submit a report to the Secretary States would be required to designate geographic areas where States would be required to establish regulatory programs to States would be required to establish geographic areas in States would have the option of establishing insurance pool programs in those States failing to operate approved programs. The Secretary of HHS, in consultation with the Secretary of Labor, would be required to establish standards for large employer plans. The Secretary of HHS would also establish standards for quality assurance programs for health plans. 1I.R. 36001s. 1757 (Administration plan) H.R. 1200/5. 491 (McDerrnott/Wellstone) H.R. 308015. 1533 (MicheVLott) I1.R. 322215. 1579 (CooperIBreaux) 1I.R. 36981s. 1743 (Stearna/Nicklea) Board a plan t h a t describes t h e health care system t h e State would be establishing. States would be required t o establish one or more regional nlliances responsible for providing coverage to residents in every area of the State. States would certify health plans to participate in alliances, after they had established a process for assessing t h e quality of health plans, their financial stability, and capacity to deliver the guaranteed benefit package. T o the maximum extent practicable, States would have to ensure that all consumers had the opportunity to purchase coverage from a certified health plan nt a price equal t o or less than t h e average prenlium for the alliance. States would Iw responsible for rnsuring plan solvency and operating guarantee funds to protect providers a n d consunlers in t h e event their health security programs for providing health services to their residents. One or more neighboring States could submit a regional health security program instead of separate State programs. States would make payments to providers according to prospective budgets or fee schedules negotiated between the States and providers. of HHS on its plans for implementing and enforcing insurance standards and models for reinsurance. If the Secretary determined that a State has failed to implement standards, then the Secretary would be required to do not-for-profit HPPCs would be established, and, in initial years of operation, the HPPC board members would be appointed by the Governor. States could increase the size threshold for required participation of small firms in HPPCs so long as no more than onehalf of all employees in the State purchased coverage through HPPCs. States would be required to establish satisfactory protection of enrollees in AHPe with respect to the potential insolvency of the plan. Statee could identify chronically underserved areas ~ n d develop plane to respond to them. certify that health plans meet required standards. They would be required to establish programs to provide health insurance coverage for persons who did not voluntarily purchase coverage privately. 80. H.R. 370415. 1 770 (W.~ h o m a q l c h a f e e ) which individuals and small employers could form purchasing groups. They would also be required to certify health plans as qualified plans and enforce insurance reform standards; establish procedures for purchasing groups; prepare comparative information concerning qualified plans and purchasing groups; provide for a risk adjustment program for the premiums of qualified plans; establish an arbitration process for the coverage and payment of claims; and specify an annual general enrollment period. States could choose to establish their own health reform systems, provided they were approved by the Secretary of HHS, but waivers for this purpose would not be provided for the establishment of single-payer systems. H.R. 391815. 1807 (Santorum/Cramm) to provide premium assistance to an individual who has a preexisting condition and who is otherwise unable to purchase affordable catastrophic insurance coverage. If they established these programs, States would be required to accept bids from private insurance carriers that desire to administer the program and provide catastrophic health insurance plans under the program, or, after determining that no bids were acceptable, would administer the program themselves. lI.R. 3600lS. 1757 ( A d m l n l s t r a t l o n plan) H.R. 1200/S. 491 (McDermott/Wellstone) 1I.R. 30801s. 1533 (Mlchebtt) R.R. 3222/S. 1579 (CooperlBreaux) ll.R. 36981s. 1743 (StearnslNIcklea) t1.R. 37041s. 1'7'70 (W. ThomaslChaf-) H.R. 39181s. 1807 (Santorum/Cramm) of plan insolvencies. States could establish s statewide fee schedule for reinlbursenient of fee-for-service providers. States could elect to estat~lisha single-payer system rather t h a n one t~asedon alliances, or a single-payer system that served a p a r t of t h e State. C. E m p l o y e r R o l e C. E m p l o y e r Role C. Employer Role C. Employer Role C. Employer Role C. Employer Role C. Employer Role AII en~ployerswould be required to pay a futed percentage of t h e weighted average premium (WAP) for each regional alliance on behalf of employees and their dependents (see "Financing" below). All employers would be required to pay higher payroll taxes and the top corporate tax rate would be increased (see "Financing" below). All employere (excluding certain new and small employers) would be required to offer employees a group health plan that covers essential and medically necessary services and to provide for payroll deductions of premium costs. Small employere would be required to enter into agreementa with HPPCs for offering coverage to employees, and they would be required to provide for payroll deduction of premium costs. Larger employere would have to offer coverage in a qualifying accountable health plan directly, rather than through the HPPC. The plan could be a "closed" plan, open only to the firm's own employees. Employers would be required to provide for payroll deduction of health insurance premium costs. They would be required to add the value of the coverage they paid for as of December 1996 to employee wages beginning January 1997. Snlall employers could either join a purchasing cooperative in the geographic area in which it does business or offer standard or catastrophic benefits through a qualified health plan. They would be required to collect and send premiums and any operating fees to the cooperative or plan on behalf of employees. Large employers would be required to offer both a standard and catastrophic benefit package, and could form their own purchasing groups, arrange coverage from a In order for group health plan expenses to be tax deductible, employers would be required to offer employees three options for health insurance coverage and to make equal contributions to the plans selected by employees. These would include the employer's existing health plan; an HMO, preferred provider organization, or managed care plan; or a combination of a catastrophic health plan and a medical savings account. Employees would have an annual opportunity to select among the options. If I1.R. 36001s. 1757 (Admlnlstratlon plan) 1I.R. 120019. 491 (McDermottlWellstone) 1I.R. 30801S. 1533 (MlchelILott) H.R. 322219. 1579 (Cooper/Bteaux) 11.R. 36981s. 1743 (StearnnlNlckles) II.R 37041s. 1770 ~homaslchafee) ( W. H.R. 391819. 1807 (Santorum/Gramm) qualified plan, or selfinsure. an employee selected an alternative plan, the employer's contribution could be based either on average contributions for employees or actual contributions under the existing plan for the specific employee. Employers would also be required to make advance payments of refundable tax credits for those low income employees eligible to receive such assistance for catastrophic coverage. D. Employeeflndlvldual Role D. Employee/Indlvldual Role D. Employee/Indlvldual Role D. Employeeflndlvidual Role D. Employeenndlvldual Role D. Employeeflndlvidual Role D. Employee/Indlvldual Role Each employee would be required to pay the difference between 80 percent of the WAP and the premium for the plan he or she selects. Individuals not fully covered through employment would pay both the required enlployer and elnplc>yee shares of their p r ~ n i i u n ~subject s, to r~rt.ainlimits for lowitlcolne persolls. Individuals would be required to pay new and/or higher taxes (see "Financing" below). No provision. No provision. All persons would be required to purchase federally qualified health insurance or be covered under a State program that provides equivalent coverage. Federal assistance would be phased-in for helping low income persons to meet the costs of health insurance and medical care. All persons would be required to obtain health insurance coverage, or face a penalty for noncompliance. Federal assistance would be phased-in for helping low-income persons to purchase coverage. Persons eligible to receive refundable tax credits for catastrophic coverage (those below 200 percent of the Federal poverty level), as well as those with family income exceeding 200 percent of the Federal poverty level, would be barred from participation in federally subsidized pools for persons with preexisting conditions if they had ll.R. 360015. 1757 (Administration plan) R.R. 12001S. 491 (McDermott~Wellstone) H.R. 308015. 1533 (MicheULott) H.R.32221s. 1579 (CooperDtreaux) ll.R. 36981s. 1743 (StearnsINlckles) ll.R. 370415. 1770 (W. ThomaslChaTee) H.R. 39181s. 1807 (Santorurn/Cramm) not obtained catastrophic coverage within 1 year of enactment. No Federal, State, or local law could restrict collection of unpaid medical bills for such individuals. 11.R. 36001s. 1757 (Administration p l a n ) H.R. 1200lS. 491 (McDermott/Wellstone) 1I.R. 30801s. 1533 (Michel/Lott) 1I.R. 32221s. 1579 (CooperlBreaux) I1.R. 36981s. 1743 (StearnslNickles) 111. PURCIMSING ALLIANCES/ COOPERATIVES III. PURCHAS~NG ALLIANCES1 COOPERATIVES 111. PURCIIASING ALLIANCES1 COOPERATIVES III. PURCIUSING ALLIANCES1 COOPERATIVES 111. PURCIIASINC ALLIANCES1 COOPERATIVES III. PURCIMSING ALLIANCES1 COOPERATIVES III. PURCIIAS~NC ALLIANCES1 COOPERATIVES A. Regional Alliances1 Cooperatives A. Regional Aiiiancesl C o o p e r a tivee A. Regional Ailiancesl Cooperatives A. Regional Alliances1 Cooperatives A. Regional Aliiancesl Cooperatives A. Regional Alliances1 Cooperatives A. Regional A1 Cooperatives liancesl States would be required to establish one or more regional alliances for providing coverage to all residents of the State. T h e alliance area would have to encompass a large enough population to ensure t h a t the alliance would have sufficient market share to negotiate effectively with health plans. No niore than one alliance per area would be allowed. Area boundaries could not be drawn so a s to concentrate racial or ethnic minority or socioeconomic groups. Alliances could not divide nietropolitan statistical areas (MSAs) or cross State lines. No provision. No provision. States would be required to designate regional HPPCs that would be required to enter into agreements with each accountable health plan covering the uniform set of benefits. All portions of a MSA would be required to be within the same HPPC and HPPC areas would be required to have a t least 250,000 eligible individuals. One or more contiguous States could provide for the establishment of a HPPC area that includes adjoining portions of the States, so long as it did not divide an MSA. No provision. States would be required to designate health care coverage areas (HCCAs) in which individuals and sniall employers could form purchasing groups. No MSA could be incorporated into more than one HCCA and the number of individuals residing within a HCCA could not be less than 250,000. Interstate agreements for regions encompassing more than one State could be established, so long they did not divide an MSA. The General Accounting Oflice (GAO) would be required to study the regulatory and legal impediments a t the Federal, State, and local levels of government that restrict the ability of small business and other organizations from joining together voluntarily to allow employees or members to pool their health insurance purchases. The GAO would be required to report to Congress with appropriate recommendations within 2 years after enactment. Allinnces would contract with certified health platis to provide HPPCs would be required to offer enrollment in plans to all eligible persons residing in its area. They would be required I1.R. 37041s. 1770 (W. ThomaslChafee) A State could authorize one or more purchasing groups in a geographic area. Purchasing groups would be required to enter into agreenients with each qualified plan that desires to be made available through the H . R 39181s. 1807 (SantotumlCramm) 11.R. 36001s. 1757 (Administration plan) H.R. 1200lS. 491 (McDermott/Wellstone) lI.R. 308015. 1533 (Michewtt) coverage to residents of the alliance. An alliance would be required to offer a contract to any certified plan seeking to serve in its area unless the plan's proposed premium exceeded the per capita premium target within the alliance by more than 20 percent. T h e alliance would also be required to ensure t h a t a t least one fee-for-service plan was available among plan omerings, and would establish a fee schedule t o pay providers under fee-forservice plans if its State did not have one. Large E m p l o y e r s Enlployers and rural el~ct.ricand telephone cooperatives could rhtmse betweell joining r e ~ o n a allini~ces l or rnrnling corporate 11.R. 3698153. 1743 (StearnslNickles) to enter into agreements with small employers for enrolling employees in health plans. They would be required to distribute to eligible individuals and employers information, in comparative form, on the prices, health outcomes, and enrollee satisfaction of different plans. They would receive and forward premiums. They would not perform any activity related to payment rates for providers or approval or enforcement of premium rates for plans. 1I.R. 37041s. 1770 (W. ThomasIChafee) 1I.R. 39181s. 1807 (Santorum/Cramm) group. They would be required to olfer enrollment in qualified plans to all eligible employees of small enrployers and other eligible persons residing in the area served by the group, and could collect and forward premiums. Purchasing groups would not perform any activity relating to payment rates for providers. HPPCs could use financial incentives to encourage plans to serve persons in undewerved areas. Alliances could use financial incentives to encourage plans to move into areas with inadequate services. R. T r e a t m e n t o f H.R. 32221s. 1579 (Cooper/Breaux) B. T r e a t m e n t of L a r g e Employers B. T r e a t m e n t of L a r g e Employers B. T r e a t m e n t of L a r g e Employers B. T r e a t m e n t of Large Empioyers B. T r e a t m e n t o f Large Employers B. T r e a t m e n t o f Large Employers No provision No provision. Large employers would have to arrange for coverage for their workers on their own, rather than through a HPPC. No provision. Large employers with more than 100 employees could form their own purchasing groups for offering health insurance. Large No provision. (Admlnistration plan) alliances if they had more t h a n 5,000 fulltime employees o r n~en~bers. Multiemployer plans would have different requirements to become a corporate alliance. Corporate alliances would have to enroll all eligible persons and provide t h e con~prehensivebenefit package. They would have to provide premium assistance for workers paid less than $15,000 (see "Financing" below). They could purchase insurance from a S t a t e certified health plan o r selfinsure. In either case, they would have to offer a choice of a t least 3 plans, one of which would have to be a feefor-service plan. Corporate alliances would be assessed a 1 percent payroll tax. (Michel/Lott) (Stearns/Nlcklea) (W. ~ h o m a s f c h a f e e ) employers would be ineligible to purchase insurance through a n individual and small employer purchasing group. (SantorumJCramm) H.R. 39181s. 1807 (Admlnlstratlon plan) IV. FINANCING IV. FINANCING IV. FINANCING IV. FINANCING IV. FINANCING IV. FINANCING IV. FINANCING A. I n G e n e r a l A. I n G e n e r a l A. I n G e n e r a l A. I n General A. I n General A. I n G e n e r a l A. I n G e n e r a l A WAP would be An American Health Security Trust Fund would be set up to pay for services. Appropriated to the Trust Fund would be all new taxes (including a new health security premium) and the funds which would otherwise be appropriated for Medicare. Medicaid, Federal Employees Health Benefits Program (FEHBP), and Civilian Health and Medical Program of the United States (CHAMPUS). Medicare trust fund balances would be transferred to the Fund. Tax incentives would be provided for persons establishing medical savings accounts. The deductibility of health insurance premiums would be increased for the selfsmployed and those not receiving employer-sponsored coverage. Federal financing for state health allowance programs would be available to the extent that payments did not exceed what would have been made under Medicaid. An individual choosing calculated for four f;ln~ilytypes for each nlliance area. Aggregate en~ployercontributions would equal 80 percent of WAP and employee would pay the difference between 80 percent of the WAP and actual premium. Nonworkers would pay the entire premium. Limits would be placed on liability for eniployers and lowincome individuals; these shortfalls would be made up by Federal subsidies. Current tax exclusions for employer-sponsored health plans would be replaced by individual tax credits. lndividuals would be entitled to a tax credit for a portion of the amounts spent on qualified health insurance premiums or out-of pocket medical expenses. lndividuals would also be entitled to a tax credit equal to 25 percent of the amount contributed to a medical savings account, up to a maximum contribution. Employers would be required to add the value of the coverage they paid for as of December 1996 to employees wages beginning January 1997. Low-income individuals (who were not Medicaid eligible) would receive a voucher which would be applied against the cost of the premium for a qualified health plan. The voucher program expansion would be phased-in subject to achievement of savings under Medicare and Medicaid. New Federal tax exclusions, deductions, and credits would be made availal~leto individuals for the purchase of health insurance andlor for contributions to medical savings accounts (MSAs) to be used for medical care expenses. In addition, grants would be made available to States to operate subsidized insurance pools for persons unable to obtain coverage because of preexisting conditions. Phase-in of the new subsidies would be contingent on the achievement of Federal savings under Medicaid and Medicare. Nonbinding expenditure targets would be established for each program, based on spending in FY 1994. The Medicaid target would increase by 6.8 percent in FY 1995, 6.9 percent in FY 1996, and 7 percent in FY 1997 The bill provides for a tobacco tax, assessment on corporate alliances, savings in existing Federal programs, and tax code changes. The bill provides for Medicare savings and an increase in the regular civil service retirement age. to buy coverage would be liable for the premium and the HPCC overhead amount. Premium and cost sharing assistance would be provided under Federal low income assistance program for persons below 200 percent of the State adjusted poverty level (120 percent of the State-adjusted poverty level for a Medicareeligible individual). Full payment of premium costs would be provided for very low income (below 100 percent of poverty) if they enroll in low cost plan. Payments for moderately low income would be on a sliding scale. lndividuals would be able to deduct their AHP premium payments. Employer deductions are capped a t the cost of the lowestpriced AHP. The bill Federal payments would be made under a new Federal grant program to help persons below 150 percent of poverty meet the costs of health insurance coverage, acute care services, and All purchasers of qualified health plans would receive a deduction up to the applicable dollar premium limit; employer premium payments up to this limit would not count as income to the employee. Contributions to a nledical savings account would be fully deductible up to the applicable dollar limit. These accounts could be used to pay for costsharing expenses under catastrophic plan or lo~ig-termcare. 1i.R. 36001s. 1757 (Admlni~tratlonplan) H.R. 120015. 491 (McDermott/Wellstone) H.R. 3080lS. 1533 (MlcheVLott) H.R. 32221s. 1579 (CooperlBreaux) 1i.R. 36981s. 1 74.3 provides for savings in Federal programs. disease prevention services. Priority would be given to persons who are not on Medicaid. eligible for tax credits, and who have unreimbursed medical expenses in excess of 5 percent of adjusted gross income. States could charge a premium for insurance provided under this program. (StearnslNickles) 1i.R 37041s. 1770 (W. ~ h o ' m a s l ~ h a f e e ) H.R. 39181s. 1807 (SantorumJGramm) Savings would be provided in Medicare and Medicaid. and later years. Target increases for Medicare would be 9.4 percent for FY 1995, 8.9 percent for FY 1996, 8.5 percent for FY 1997, and 8 percent for FY 1998 and later years. To meet the targets, Federal Medicaid spending would be subject to binding per capita growth limits (see below); limits would not be established for Medicare. Savings would be provided in Medicare and Medicaid. R. Employer B. Employer B. Employer B. Employer B. Employer B. Employer B. Employer The employer would pay a fixed percentage of WAP for the alliance for each class of enrollee, such that aggregnte employer payments for the class equal 80 percent of t h e WAP. Liability would be lin~itedto 7.9 percent of payroll. Liability would be further lin~itecffor firms with less t h a n 75 c~liployeesand average wages less t h a n $24,000. Enlployer would make pro rata paynlents for p:~rt.-timeworkers with Not applicable. Employers would specifically not be required to make any premium payment for their employees. None required. Employers would be required to add the value of the coverage they paid for as of December 1996 to employees wages beginning January 1997. None required. Employers would have the option of contributing to employees' health insurance premiums and/or MSAs, but would not be required to do so. An employer that provided health benefits would be required to make a n equal contribution to (at the employee's option) its existing health plan; an HMO, preferred provider organization t PPO), or managed care plan; or a con~bination 1I.R. 36001s. 1757 (Administration plan) H.R. 120015. 491 (McDermott~Wellstone) I1.R. 3080lS. 1533 (Michebtt) 1I.R. 322215. 1579 (CooperlBreaux) 1I.R. 36981s. 1743 (StearnslNlckles) 1I.R 37041s. 1770 (W. ThomasIChafee) worker liable for remainder of employer share (subject to limits if nonwage income less than 250 percent of poverty 1. H.R 39181s. 1807 (Santorum/Gramm) of a catastrophic health plan and a n MSA. Employees would have a n annual opportunity to select among the options. If an employee selected a n alternative plan, t h e employer's contribution could be based either on average contributions for employees or actual contributions under the existing plan for the specific employee. Corporate alliance employers would pay 80 percent of corporatespecific WAP except that for workers paid less than $15,000, they would pay t h e greater of 80 percent of WAP or 95 percent of least costly plan. Self-employed would pay 80 percent of WAP up to 7.9 percent of selfeniployment income with liability limited by a percent of earnings cap for earnings under $24,000. C. Employee1 lndlvldual C. Employee1 Individual C. Employeel Individual C. Employee1 Individual C. Employeel Individuai C. Employeel Individual C. Employeel Individual Eniployees ( a n d selfeniployed) would pay the difference between 80 percent of WAP and actual prenliu~ii. Fanlilies with adjusted gross inconles (AGI) less than $40,000 would pay A health security premium, equal to 7.5 percent of taxes otherwise owed would be applied to individual income taxes. States could require certain state health allowance program participants to pay all or a portion of the premiums and costsharing. Contributions for persons between 100 Individual choosing to buy coverage would be liable for premium and HPCC overhead amount. Premium adjustments would be provided for low income. Very low-income would All individuals would be required to have minimum private health insurance coverage. States would be required to establish a program to provide coverage a t least equal An individual would be liable for any premium not otherwise paid by employer or through a voucher. As of January 2005, any individual who was not covered under a qualified health Individuals choosing to obtain coverage would pay their own premiums, potentially with Federal assistance through the tax system (see below) or through a State-operated 1I.R. 36001s. 1757 (Admlnistratlon plan) H.R. 12001s. 491 H.R. 30801S. 1533 ( McDermottlWellstone) (MlcheVLott) up to income-related cap. (There would be no income related cap for corporate alliance employ&s.) Employers could pay t h e individuallfan~ilyshare il they did so for all employees. A monthly $65 longterm carelhealth care premium would be imposed on all aged; singles with incomes below $8,500 and couples below $10,700 (as adjusted for cost-ofliving) would be exempt. Nonworkers would pay: (i) 80 percent of WAP (with liability limited for those with nonwage income less than 250 percent of poverty), plus (ii) remainder of actual premium (except t h a t fanlilies with ACI less than $40,000 would pay up to income-related cap). Early retirees would pay the difference between 80 percent of WAP and actual premium, except fanlilies with AGI less than $40,000 would pay up to income-related cap. En~ployerswith existing commitment to provide retiree benefits would pay the retiree's share ( u p to 20 percellt of WAP). percent and 200 percent of poverty would be based on a sliding scale. Contributions could also be required for those enrolled on an optional basis by the State. H.R. 32221s. 1579 (Cooper/Breaux) 1I.R. 36981s. 1743 (Stearns/Nlckles) not be liable for any premium if they enrolled in a AHP with a premium a t or below the lowest premium established by an open AHP in the area; they would be liable for 10 percent of any excess premium if enrolled in higher cost plans. Moderately low-income premium adjustments would be based on a sliding scale. to that of a federallyqualified health insurance plan to any resident who refused to voluntarily purchase coverage. States could impose a premium for this coverage on individuals who were not eligible under the new grant program (targeted toward the low income), consistent with the cost of coverage and the individual'e ability to pay. 1I.R. 37041s. 1770 (W. ~ h o m a s 1 C h a f e e ) plan or equivalent plan would be required to pay a penalty equal to the average yearly premium of the local area plus 20 percent. H.R. 39181s. 1807 (Santorurn/Cramm) preexisting condition insurance pool. Individuals could also choose to establish MSAs with their own funds and/or employer contributions. H.R. 308015. 1533 H.R. 322215. 1579 D. F e d e r a l Subsidies D. F e d e r a l Subsidies D. Federal Subsidies D. Federal Subsidies D. Federal S u b s i d i ~ D. F e d e r a l Subsidies The Trust Fund would pay each State a n amount equal to the product of the State capitation amount and the Federal contribution amount with the Federal contribution ranging from 81 percent to 91 percent of the State's weighted average share of the national budget. Federal matching would be provided for Medicaid expenditures for acute care services under the State Health Allowance programs; no Federal matching would be available for persons with incomes over 200 percent of poverty. The Federal premium assistance amount for very low income would equal the base Federal premium amount reduced by any employer payment. The base Federal premium amount for an individual residing in a HPPC area would equal the product of the reference premium rate (lowest premium established by an open AHP in the area) and the national subsidy percentage (i.e., total Federal amount available divided by the total amount of assistance that would be provided if full funding were available). Assistance for moderately low income would be based on a sliding scale. Federal payments would be made under a new Federal grant program to help persons below 150 percent of poverty with the costs of health insurance coverage, acute care services, and disease prevention cervices. Priority would be given to persons who are not on Medicaid, eligible for tax credits, and who had unreimbursed medical expenses in excess of 5 percent of adjusted gross income. Low-income individuals (who were not Medicaid eligible) would receive a voucher which would be applied against the cost of the premium for a qualified health plan. Assistance would be phased-in beginning in 1997 for persons below 90 percent of poverty. The poverty percentage would be increased by 20 percentage points each year from 1998 2004 and an additional 10 percentage points in 2005 when the full phase-in of 240 percent would be reached. The amount of the voucher for a family below poverty would equal the average cost of the lowest cost half of qualified plans in the area; as the family's income increased,- the amount of assistance would be phased-out based on a sliding scale. If Medicare and Medicaid savings occurred more slowly than anticipated (as measured against Most Federal subsidies would take the form of new tax credits, deductions, or exclusions for health insurance premiums or MSA contributions. (See G.2, below.) In addition to these tax provisions, there would be Federal grants to States that chose to operate preexisting condition insurance pools. (See section M for a description of these pools.) Federal allotments would be equal to States' expected losses under the pools and would begin in 1996, or later if Medicare and Medicaid expenditure targets were not met. 1I.R. 36001s. 1757 ( A d m i n i s t r a t i o n plan) 1I.R. 12001S. 491 (McDermott/Wellstone) D. F e d e r a l Subsidies Federal subsidies would make up shortfalls due to limits on employer, employee, nonworker, and retiree premium liabilities (as noted above). Federal assistance would be provided for t h e lowincome for required deductible and coinsurance payments in regions where there was no low cost-sharing plan with a premium a t or below the WAP. The Federal payment would be made in a lump s u m to regional alliances equal to t h e difference between alliance payments (premiums and administrative costs) and alliance receivables (employer a n d individual contributions, Federal contributions for any Medicare beneficiaries enrolled in the alliance, a n d Federal and Stnte paynients mandated under Medicaid). Low-income Medicare individuals would be eligible for assistance with Medicare premiums; very lowincome Medicare individuals would also H.R. 360015. 1757 (Admlnlstratlon plan) Federal payments would be made under Medicaid on behalf of Aid to With Dependent ChildreriEu pplement Security Income (AFDCESI) recipients to the alliance based on 95 percent of t h e current per capita spending amount for AFDCESI recipients, updated for inflation. The Federal share would be determined using the current Medicaid formula. Federal Medicaid matching payments would be made for supplemental benefits provided to AFDCISSI adults. Federal funding would be provided for the new comprehensive program for children. H.R 120015. 491 (McDermottlWellstone) H.R. 308015. 1533 (MlcheYLott) 1I.R. 32221s. 1579 (Cooper/Breaux) be eligible for Medicare cost-sharing assistance. Payments would be made for very low income (including Medicare eligible) for the costs of prescription drugs, eyeglasses and hearing aide and other iteme and services (other than long-term care) determined to have been commonly provided under State Medicaid programs but not included in uniform effective benefits. Low-income cost-eharing assistance would be provided. An adjusted per enrollee amount would be determined based on total amount available, number of enrollees receiving assistance, and premium class of the enrollee. Full cost-sharing coverage would be provided for very low income Medicare enrollees. H.R. 36981s. 1743 (Slearns/Nickles) 1I.R 370415. 1770 (W. ~ h o m a s l c h a f e e ) specified baseline numbers), the phase-in would be decelerated; if they occurred more rapidly, the phase-in would be accelerated. In the case of a deficit, the Benefits Commission could submit recommendations to Congress for restructuring benefits or other changes. H.R. 391815. 1807 (Santorum/Gramm) 1I.R. 3600lS. 1757 (Administration plan) H.R. 1200lS. 491 (McDermott/Wellstone) H.R. 308015. 1533 H.R. 32221s. 1579 (MicheVLott) (CooperlBteaux) lI.R. 36981s. 1743 (StearnslNickles) H.R. 37041s. 1770 (W. 'I'homasIChafee) H . R 39181s. 1807 (SantorudGramm) E. Limitation on E. Limitation on E. Limitation o n E. Limitation on E. Limitation o n F e d e r a l Subsidies F e d e r a l Subeidiea E. Limitation o n Federal S u b s i d i e s F e d e r a l Subsidiea Federal Subsidies Federal Subsidiee F e d e r a l Subsidlea Federal assistance (other than mandated Medicare and Medicaid would be limited to a n entitlement cap ($10.3 billion in FY 1996, $28.3 billion in FY 1997, $75.6 billion in FY 1998, $78.9 billion in FY 1999 and $81.0 billion in FY 2000 with increases in future years approximately equal to the growth in the CDP. If these funds were insufficient to meet obligations for alliance payments, the Secretary of DHHS would recommend to Congress actions to eliminate the shortfall; Congress would act on recommendations using an up or down vote similar to that used for military base closings. The weighted average Federal contribution percentage for all States could not exceed 86 percent of the national budget. Federal payments (including disproportionate share (DSH) payments) could not exceed what would have been made in the absence of the allowance program. Federal payments in a year (prior to 2000) would be limited to the sum of the amounts that would otherwise have been payable under Medicaid plus additional amounts from bill's other financing provisions; beginning in 2000. the increase in the annual amount would be tied to the increase in the GDP. For each year the available amount would be reduced by amounts spent for long-term care phasedown assistance, Medicare low-income assistance, low-income cost-sharing assistance, supplemental benefits assistance for very lowincome, and certain specified grant amounts. If Federal subsidies are reduced, individuals would not have to make up the shortfall. Total Federal payments under the new grant program would be $14.2 billion in FY 1997, $15.8 billion in FY 1998, $17.4 billion in FY 1999, and $20 billion in FY 2000; the amounts would be increased by 7.5 percent per year in subsequent years. The scheduled phase-in of the voucher program would be subject to achievement of Medicare and Medicaid savings (as measured against specified baseline numbers). If Medicare or Medicaid spending exceeded the expenditure target for a year, certain new Federal tax benefits andlor grants scheduled to be effective in the following year would be delayed. Benefits would be postponed, in the following order, until savings from the delay were a t least suficient to equal the Medicare or Medicaid excess: (a) the tax credit for the purchase of catastrophic coverage for individuals and families with income between 100 and 200 percent of poverty; (b) the same tax credit for single persons below 100 percent of poverty; (c) the credit for couples and families below 100 percent of poverty; (dl the exclusion from gross taxable income of expenditures for health insurance and MSA contributions; (e) grants to States for preexisting condition insurance pools. The separate E. Limltation on H.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 1200/S. 491 (McDermott/Wellstone) H.R. 30801s. 1533 H.R. 32221s. 1579 (Mlchebtt) (CooperlBreaux) 1I.R. 36981s. 1743 (Stearns/Nlcklcs) 1f.R. 370418. 1770 (W. ThomasIChafee) H . R 39181s. 1807 (Santorurn/Gramm) deduction from gross income for the purchase of catastrophic health insurance and MSA contributions would not be contingent on Medicare and Medicaid savings. F. State P a y m e n t s F. S t a t e P a y m e n t 8 F. S t a t e P a y m e n t e F. State P a y m e n t s F. S t a t e P a y m e n h F. State Paymenta F. State Paymente States would be required to make maintenance-of-effort payments t o t h e alliance equal to previous costa of furnishing Medicaid benefits in t h e comprehensive package to nonwelfare beneficiaries (excluding wrap-around benefits for children), updated for inflation. States would be required t o fund covered services if costa for them exceeded the Federal payment. States choosing to operate an allowance program would fund allowance expenditures not paid by Federal government or individual contributions. States would gradually assume full responsibility for longterm care. States would make payments not paid by the Federal government under Medicaid or the new grant program. In FY 1997, the State share of expenditures under the new grant program would have to be a t least equal to the Medicaid DSH payments made by the State in FY 1996, updated by the same percentage increase as occurred for FY 1996 over FY 1995; in future years the amount would be increased by the CPI. States would be required to continue Medicaid coverage for any category of persons eligible as categorically needy in FY 1994. States would be required to continue Medicaid coverage of classes or categories of individuals eligible during FY 1993. A State that chose to operate a preexisting condition insurance pool would be required to fund the adn~inistrative costa of the pool. States would be required to pay t h e alliance on behalf of AFDCISSI recipienh a n amount based on 95 pcrcent of t h e current per capita spending ~tllauntfor AFDCISSI recipients, updated for itlflntion. S t a t e share would be determined using the current Mediceid forn1~11n. 1I.R. 36001s. 1 757 (Administration plan) H.R. 1200lS. 491 (McDermot tlWellstone) 1I.R. 30801s. 1 5 3 3 (MicheVLott) H . R 32221s. 1579 (Cooper/Breaux) 1I.R. 36981s. 1743 (StearnslNickles) JI. R. 370415. 1 770 (W. ~ h o r n a s l c h a f e e ) H.R 3918lS. 1807 (SantorudCramm) States would pay State share on continued Medicaid for extra benefits for AFDC/SSI adults. C. F e d e r a l Revenues, Tax F ~ e n d i t u r e s , and Savings C. F e d e r a l Revenues, T a x Expenditures, a n d Savings C. F e d e r a l Revenues, T a x JCxpenditures, a n d Savings C. Federa1 Revenuea, T a x Expenditures, a n d Savings C. Federal Revenues, T a x Ekpenditures, a n d Savings C. Federal Revenues, Tax Expenditures, a n d Savings C. Federal Revenues, T a x Expenditures, and Savings 1. F e d e r a l Revenues 1. F e d e r a l Revenues 1. F e d e r a l Revenues 1. Federal Revenuee 1. Federal Revenues 1. Federal Revenues 1. Federal Revenues The tobacco tax would be increased by $0.75 per pack with similar increases for other tobacco products. A health security premium, equal to 7.5 percent of taxes paid, would be applied to individual income taxes. The employer hospital insurance payroll tax (currently 1.45 percent of wages) would be set a t 7.9 percent. (All State and local employees would be covered.) The self-employment tax rate would be set a t 8.35 percent of income. No provision. No provision. No provision. No provision. No provision. Corporate alliances would be assessed a 1 percent payroll tax. For 1998 - 2000, corporations would be assessed approximately 50 percent of their existing retiree health care costs. The Medicare hospital insurance tax would apply to all State and local employees. Individual tax rates would be increased (from 28 percent to 31 percent and 31 percent to 34 percent) and a new top rate added (35 percent for families with taxable incomes over $200,000). A 10 percent niillionaire's surtax tax 1I.R. 36001s. 1757 (Administration plan) H.R. 12001s. 491 (McDermottlWellstone) would be added. The minimum tax rates would be increased. Additional individual tax changes would include making permanent the overall limitation on itemized deductions and the phaseout of personal exemptions for high income taxpayers; limiting the deduction for moving expenses; eliminating the deduction for club membership fees; making permanent the top estate and gift tax rates; and increasing the amount of social security benefits included in income. The upper limit on the amount of earnings subject to the Medicare payroll tax would be removed. The top corporate rate would be increased to 38 percent. Additional code changes would include increasing recovery period for nonresidential property; increasing taxation of income of controlled foreign I1.R. 3080/S. 1533 (Michebtt) I1.R. 32221s. 1579 (CooperIBreaux) 1I.R. 36981s. 1743 (Stearn~INlckies) lI.R. 370418. 1770 (W.ThomasIChafee) I1.R. 39181s. 1807 (Santorum/Cramm) I1.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 1200lS. 491 (McDermott/Wellstone) I1.R. 3080lS. 1533 (MlcheVLott) H.R. 32221s. 1579 (C~operlB~eaux) 1I.R. 36981s. 1743 (StearnslNlckles) 2. T a x Code Changes: Employers, 2. T a x W e Changes: Employere, Employees, a n d IIealth P l a n s Employees a n d 11ealth P l a n s 2. T a x C o d e Changes: Employers, Employees a n d Health P l a n s Current tax exclusions would be replaced by individual tax credits. (If the amount of credit exceeds tax liability, the dimerence is payable to the individual.) Tax deductions would be allowed for premium payments for qualified health plans up to the applicable dollar limit (i.e., average cost of lowest priced one-half of Premium payments for a catastrophic health insurance plan would be fully deductible, regardless of whether the taxpayer itenlized deductions and without I1.R. 37041s. 1770 (W. ThomasIChafee) H . R 39181s. 1807 (Santorum/Gramm) corporations attributable to imported property; changing rules applying to securities held by securities dealer; repealing deduction for intangible drilling and development costs; repealing percentage depletion for oil and gas wells; repealing application of like-kind exchange rules to real property; and making permanent changes in estimated tax provisions. (Note: Some of these tax provisions were included in OBRA 1993; sponsors have indicated they are exploring replacement financing options.) 2. T a x C o d e Changes: Employers, Employees a n d IIealth P l a n s 2. Tax C o d e Changes: Employers, Employees a n d Health Plans 2. Tax C o d e Changes: Employers, Employees a n d IIealth P l a n s 2. Tax Code Changes: After January 1, 2004, health benefits provided by an employer to an etilpIoyee would be tnxnble as i~lconle,to the extent t h e benefits No provision. The tax deduction for health premiums for the self-employed would be gradually increased to 100 percent. A 34 percent excise t . would be imposed on employer contributions exceeding the cost of the lowest priced AHP plan meeting minimum standards. The Employers, Employees a n d Health Plans I1.R. 36001s. 1757 (Admlnlstration plan) exceeded the standard benefits package. Any health benefit plan provided by a n enlployer through a flexible benefit plan (including a flexible spending arrangement or cafeteria plan) would be counted a s taxable income eflective January 1, 1997. The health insurance deduction for selfemployed would be raised to 100 percent. However, if a selfemployed proprietor also paid for coverage of employees, t h e deduction would be limited to the percentage paid for hislher employees. Premiums for long-term care insurance policies could be deducted a s ~iiedicalexpenses to the extent the benefit did not exceed $150 per day (adjusted for inflation after 1996). Preferential tax treatment of post 1I.R. 1200/S. 491 (McDermott/Wellstone) H.R. 32221s. 1579 11.R. 37041s. 1770 (W. ThomasIChafee) (CooperlBreaux) The tax deduction for those not receiving employer provided health coverage would be increased to 100 percent (even if the individual did not itemize). Individuals would be allowed to deduct the cost of a catastrophic health plan from gross income. Individuals would be allowed to make tax free contributions to medical savings accounta in amounts equal to the lowest deductible under any catastrophic plan providing coverage to a beneficiary of the account. Entitlement to the deduction would be based on coverage under a catastrophic plan and (with limited exceptions) no coverage under a more generous plan. A deduction would not be allowed before 1999 for individuals eligible for employer-sponsored coverage. Payments from the account could only be made for deductibility of health plan expenses of selfemployed would be increased to 100 percent. Individuals could fully deduct their AHP premium payments up to the cost of the lowest priced AHP. H.R. 3222: In addition, commonality of interest or geographic location requirement for tax exempt trust status would be eliminated for large employer groups. Individuals would be entitled to a tax credit for a portion of the amounts spent on qualified health insurance premiums or out-of pocket medical expenses. The percentage credit would be 25 percent of the total spent below 10 percent of gross income, 50 percent of any amount between 10 percent and 20 percent of gross income, and 75 percent of any additional amount. Individuals would also be entitled to a tax credit equal to 25 percent of the amount contributed to a medical savings account (up to a maximum contribution of $3,000 for an individual, plus $500 for each dependent, indexed in future years). In order to receive the credit, payments from the account could only be made for qualified medical expenses (outof-pocket expenses and trealth insurance premiums). qualified health plans offered in the area). Full deduction would be permitted up to limit for premiums paid by employer, employee (even if employee does not itemize) and selfemployed. Employerpaid premiums in excess of this amount would be taxable to employee. The dollar limits would be determined annually by the Secretary. Contributions to an MSA would be fully deductible up to the applicable dollar limit if paid by employee; they would be excludable from income if paid by employer. Cost of catastrophic benefit plan premiums would be subtracted from the applicable dollar limit in making this determination. Payments from the account could only be made for medical care and long-term care not otherwise compensated by insurance or otherwise; paynlents for health plan coverage are being subject to the current requirement that medical expenses are deductible only to the extent that they exceed 7.5 percent of gross income. A catastrophic plan is defined as one that covers specified services with a deductible (both individual and family) of a t least $3,000; this minimum would be indexed for inflation. A similar deduction would be established for individual and employer contributions to an MSA for a taxpayer who has catastrophic coverage and is under age 65. (Taxpayers over age 65 would be eligible if they chose an MSAIcatastrophic coverage option in lieu of Medicare; see Medicare, below.) Annual contributions could not exceed $3,000 or the applicable minimum catastrophic deductible for the year. Distributions from an MSA would be mexempt if they were used to pay expenses I1.R. 360019. 1757 (Administration plan) retirement medical and life insurance reserves and retiree health accounts maintained by pension plans would be eliminated. Preferential tax treatment of certain health care organizations would be eliminated under specified conditions. H.R. 12001S.491 (McDermott~Wellstone) 1i.R. 30801s. 1533 H.R. 32221s. 1579 I1.R. 36981s. 1743 (MicheVLott) (Cooper/Breaux) 1I.R. 37041s. 1770 (Stearns/Nlckles) (W.~homaslchafee) medical care, long-term care, and payments for premiums for a catastrophic coverage or long-term care policy or a medicare supplemental policy. Employer contributions to a medical savings account would not be subject to employment taxes. Premiums for long-term care insurance policies could be deducted as medical expenses to the extent the benefit did not exceed $200 per day (adjusted for inflation after 1994) Commo~ialityof interest or geographic location requirement for tax exempt trust status would be eliminated for large employer groups under certain conditions. Individuals who failed to enroll in insurance plans would be unable to claim the personal exemption on their taxes. Individuals would be able to exclude from gross income amounts withdrawn from individual retirement plans or 401(k) plans for long term care insurance. excluded except for catastrophic coverage, long-term care coverage, and Medicare supplen~entalpolicies and premiums. Employer contributions would be exempt from employment taxes. Premiums for long-term care insurance policies could be deducted as medical expenses to the extent the benefit did not exceed $100 per day (adjusted for inflation after 1995). Commonality of interest or geographic location requirement for tax exempt trust status would be eliminated for large employer groups. Payments under life insurance contracts for terminally ill persons would be treated as death benefits for tax purposes. The definition of deductible medical care would be expanded for tax purposes to include qualified long-term care H . R 391815. 1807 (SantorumlCramm) counted toward the catastrophic deductible (but not to pay for health insurance). If the MSA balance exceeded the deductible, excess amounts could be used for long-term care services or distributed to the taxpayer (in the latter case, only interest earned on the excess would I= taxable). Employer contributions to MSAs would also be exempt from payroll taxes. Both the catastrophic insurance and MSA deductions would be effective in the first taxable year aRer enactment. (Unlike other tax changes, these would not be contingent on Medicare and Medicaid savings.) Premium payments for a health insurance plan andlor MSA contributions would be excluded from taxable income for all individuals (including the self-employed) not eligible for employerpaid coverage. (This exclusion differs from 1I.R. 360015. 1757 (Administration plan) H.R. 120015. 491 (McDermott/Wellstone) 1I.R. 308015. 1533 (MicheULott) H.R. 32221s. 1579 (CooperIBreaux) 1l.R. 36981s. 1743 (Stearns/Nicklea) 1I.R 370415. 1770 (W. ~homaslChafee) services. Payments for qualified long-term care policies would be treated the same as payments for accident or health insurance policies. H.R. 391815. 1807 (Santorurn/Gramm) the deduction above in that it is available for any kind of health insurance, not just catastrophic, and is available to taxpayers over age 65.) The exclusion for a year could not exceed the national per employee average of employer contributions to health plans in the preceding year. Again, employer contributions to insurance or MSAs would not be subject to payroll taxes. The exclusion would be phased in, with 33 percent of expense3 excluded in 1996, rising in steps to 100 percent in 2001. Phase-in could be delayed if Medicare and Medicaid expenditure targets were not met. There would be a refundable tax credit for catastrophic health premiums plan insurance paid by persons not eligible for Medicare or Medicaid. For the purpose of this credit, a catastrophic 1I.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 12001s. 491 1I.R. 308015. 1533 H.R. 322215. 1579 1t.R. 36981s. 1743 ( McDermottlWellstone) (MlcheVLott) (CooperIRreaux) (Stearns/Nlckles) 1l.R 370418. 1770 (W. T h o m a s l C h a f ~ ) H.R. 391818. 1807 (Santorum/Gramm) plan would be one with a deductible equal to the greater of $3,000 or 20 percent of adjusted gross income. The credit would equal 100 percent of preniiums for families with income below 100 percent of the Federal poverty level and would phase down to zero for those with incomes a t 200 percent of the poverty level. Persons eligible for the credit could receive advance payments from their employers during the year. The credit would be available to couples and families below 100 percent of poverty in 1997 and to single persons below 100 percent of poverty in 1998. For couples and families below 200 percent of poverty, 33 percent of the credit would be available in 1999; the full credit would be available to all persons in 2000. Phasein could be delayed if Medicare and Medicaid expenditure targets were not met. No Federal, State, or local 11.R. 36001s. 1757 (Admlnlstratlon plan) 1f.R. 1200/S. 491 (McDermottlWellstone) H.R. 30801s. 153g (MlcheULott) H . R 32221s. 1579 (CooperlBreaux) 1t.R. 36981s. 1743 (StearnsNlckles) I1.R. 370415. 1770 (W. ~homaslchafee) H.R. 39181s. 1807 (Santorum/Cramm) law could restrict collection of unpaid medical bills for individuals eligible for the credit but not obtaining coverage. Penalty -free withdrawals from qualified retirement plans would be permitted for the purchase of Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage. Employer and individual deductions and exclusions for a health insurance plan would be contingent on the plan's compliance with portability and permanence requirements (see section JX). In addition, the individual exclusion and business expense deduction for employerpaid health benefits would be available only if the en~ployercomplied with the requirement for equal contributions to alternative plans. I1.R. 3600lS. 1757 (Admlnlstratlon plan) A.R. 37041s. 1770 (W.~ h o m a s l c h a f e e ) H . R 39181s. 1807 (SantorumlGramm) 3. F e d e r a l P r o g r a m Savlngs 3. . F e d e r a l P r o g r a m Savings 3. F e d e r a l P r o g r a m Savings 3. Federal Program Savinge 3. Federal Program Savlnm 3. Federal P r o g r a m Savings 3. F e d e r a l Program savings Medicare savings would be achieved by reducing payments to hospitals, physicians, skilled nursing facilities, and home health services. The Part B premium (currently equal to 25 percent of program costs) would be increased for individuals with incomes over $90,000 and couples with incomes over $115,000; the increase (equal to an additional 50 percent of program costs) would be phasedin with the full increase applicable to those with incomes $15,000 over the threshold amount ($30,000 for couples). Payments would no longer be made under Medicare, Medicaid, FEHRP,and CHAMPUS. Medicare Part B premiums would be increased for individuals with AGI over $100,000 and couples with incomes over $125,000; the increase is phased in with the full increase (equal to an additional one-third of program costs) applicable to those with incomes $50,000 above the threshold amount. Medicare payments would be reduced for hospitals, physicians, home health services, skilled nursing facility services, and hospice services. The Part B premium would be increased for individuals with incomea over $75,000 and couples with incomes over $100,000; the full increase (equal to an additional 50 percent of program costs) would be applicable to persons with incomes $75,000 over the threshold amount. F1.R. 3698 and S. 1743: Medicare savings would be achieved by reducing payments to hospitals. Medicare changes would make permanent the provision setting the beneficiary P a r t B premium equal to 25 percent of program costs, reduce payments for outpatient hospital services, eliminate the DSH adjustment, eliminate payments to hospitals for enrollees bad debt, and impose cost-sharing on lab and home health services. The Part B premium would be increased for individuals with incomes over $90,000 and couples over $115,000; the increase would be phased-in with the full increase (equal to an additional 50 percent of program costs) applicable to those with incomes $10,000 above the threshold amount. Growth in per capita Federal Medicaid payments to States would be limited to the percentage change in the medical care component of the CPI; limits would apply separately to acute care and long-term care services. Enforcement of secondary payer program would be expanded. Coinsurance would be imposed for home health and Ialmratory services. The Secretary would be requirpd to report to Congress by J u n e 30, The regular civil service retirement age would be increased to 62. Federal agencies would be required to prefund Federal retiree health benefits. Medicaid would be repealed; Federal payments for long-term care services would be phased-out over four years. Federal agencies would be required to prefund Federal retiree health benefits. The growth in Medicaid payments to the States would be capped a t 20 percent above the 1993 level in FY 1995. In subsequent years, Federal Medicaid spending for acute care would grow a t 2.5 percent above the CPI. Medicaid DSH payments would be eliminated. H.R. 3698: Welfare benefits (other than emergency Medicaid) would be eliminated for noncitizens, except for refugees and permanent resident aliens over age 75 who have been legal residents for 5 years. S. 1743: Copayments would be imposed for lab and home health services, and paynlents for all Part A services would be reduced. Medicaid savings would be achieved through a cap on Federal payments for acute care services, increasing State flexibility to 1I.R. 360015. I757 (Administration plan) 1999, on whether the projected rate of Medicare growth will exceed t h e target rate ti e., annual growth in private premium rate targets, plus one percentage point), and, if so, make recommendations to achieve t h e target rate. Provision of Medicaid acute care would be transferred to regional alliances and be subject to per capita rate of increase limits. Medicaid disproportionate hospital share paymenta would be eliminated. H . R 120015. 491 (McDermott/WeIlstone) H.R. 30801s. 1533 (MicheVLott) 1I.R. 32221s. 1579 (Cooper/Breaux) 1I.R. 36981s. 1743 (StearnslNickles) H.R. 37041s. 1770 Thomasicha fee) (W. contract for coordinated care services, and phased-in elimination of hospital DSH payments. H.R 391815. 1807 (SantorundGramm) I1.R. 3600/S. 1757 (Administration plan) H.R. 1200/S. 491 (McDermott/Wellstone) V. BENEFITS V. BENEFITS V. BENEFITS V. BENEFITS V. BENEFITS V. BENEFITS V. BENEFITS Comprehensive standard pxkage would include hospital services; health professional services; medical and surgical services; some mental illness and substance abuse treatment; family planning services and services for pregnant wonien; hospice care; honie health care o r institutional extended care as an alternative to inpatient treatment; ground, air, and water anibulance services; outpatient laboratory, radiology, and diagnostic services; prescription drugs; outpatient rehabilitation services; durable medical equipment and prosthetic and orthotic devices; vision care ilicluding eyeglasses nnd contact lenses for children to age 18; dental care for individuals under 18 and eniergellcy dental services for others; and health education and t railling classes offered at the discl-etion of a Comprehensive services that a r e "medically necessary and appropriate" for maintenance of health, diagnosis, treatment, or rehabilitation would include hospital care; professional services of practitioners; community-based primary care including care furnished in schwlbased settings; clinical preventive services according to a periodicity schedule established by the Board; long term care services including nursing facilities, home and community-based care, and hospice care; prescription drugs; preventive and prophylactic dental care for children under 18; mental health services and substance abuse treatment; outpatient physical, occupational and speech therapies; durable medical equipment; honie dialysis; emergency Bill provides for "MedAccess" standard, catastrophic, and Medisave health insurance plans, each of which is to cover only essential and medically necessary service, including medical, surgical, hospital, and preventive services. Annually, a 5-member commission would specify a uniform benefit set for Congressional consideration. The uniform set would include clinical preventive services, and medically appropriate diagnostic services and categories of treatmenta that all AHPe would be required to cover in the following year. Congress could disapprove and reject the Commission's recommendations by enacting, within 44 days, a joint resolution introduced within 10 days of the date the recommendations were sent by the commission. Federally qualified health insurance plans would be required to cover all medically necessary acute care including physician services; inpatient, outpatient, and emergency hospital services and alternatives to hospitalization; and prescription drugs. The bills specify that abortion services would not be required. They prohibit insurance plans from excluding coverage for selected illnesses or treatments if consistent with medically accepted practices. Individuals could elect a standard benefit package or a catastrophic benefit plan established by a commission and approved by Congress. Those electing a catastrophic plan would be able to establish a tax-favored medical saving account t h a t could be used to pay for treatment. Catastrophic health insurance plans would be required to cover a t least the following services: inpatient hospital services (other than in a n institution for mental diseases); outpatient hospital services; services of rural health clinics and federallyqualified health centers; laboratory and x-ray services; nursing facility services for persons aged 21 or older; early and periodic screening, diagnostic and treatment services (as defined under Medicaid 1; physicians' services and medical and surgical services furnished by dentists; and services of nursemidwives, certified pediatric nurse practitioners, and certified family nurse practitioners. H.R. 32221s. 1579 (CooperIBreaux) The NAIC would be requested to establish actuarial equivalence rules and set target actuarial values for standard coverage and catastrophic coverage. The target for standard coverage would be the actuarial value of benefits currently typically offered in the small employer health coverage market. The target for catastrophic coverage would be the estimated actuarial value of a plan with a deductible midway between the minimum and niaximum permitted. Health insurance plans would be considered to provide The Commiesion could develop guidelines to specify appropriate uses o f treatment. An AHP could provide treatments not determined by the Comn~issionto be medically appropriate A standard benefit package would include medical-surgical services; medical equipment; safe and effective prescriptions and biologicals; preventive services; rehabilitation and home health services; services for substance abuse and severe mental illness; hospice care; and emergency transportation and other transportation for nonelective medically necessary services in frontier andsiniilar areas. 1i.R. 36001s. 1757 (Administration plan) H.R 1200lS. 491 (McDermott/Wellstone) B.R. 3080/S. 1533 H . R 322215. 1579 (MicheVLott) (CooperlBreaux) health plan. Clinical preventive services would be available consistent with a periodicity schedule ~romulgatedby the ~ationa~ l e a l i hBoard. Preventive services would include ageappropriate immunizations and specified screening tests. ambulance services; and prosthetics. standard or catastrophic coverage if benefits were determined to have a value within 5 percentage points of the target actuarial values. A Medisave plan would consist of a catastrophic health plan and a medical aavings account. The Board would interpret and update the benefit package and recommend revisions to the President and t h e Congress. States or employers could provide additional benefits. according to epecified criteria. 1I.R. 36981s. 1743 (StearnsINlckles) H.R. 37041s. 1770 (W. ThomasIChafee) A benefits commission would clarify covered items and eervices and submit proposals to Congress to vote up or down. The commission could suggest modifications no more than annually, but could not specify particular procedures or treatments. H . R 39181S. 1807 (Santorurn/Gramm) 11.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 120015. 491 (McDermott/Wellstone) VI. BENEFICIARY COST-SIIA RING VI. BENEFICIARY COST-SHARING VI. BENEFICIARY COST-SHARING VI. BENEFICIARY A health plan would ofrer a either a lower cost-sharing schedule, higher cost-sharing schedule, or combination costsharing schedule. All schedules would have out+f-pocket limits of $1,500 for a n individual and $3,000 for a family (indexed for inflation). Any plan electing to sell the lower cost-sharing option would also have to offer a point-ofservice option to the enrollees. No deductibles, coinsurance, or copayments would be applicable for covered services. No balance billing would be permitted for covered services. A standard coverage MedAccess plan would have substantial cost sharing; a catastrophic coverage plan would have a deductible a t least equal to $1,800 for a n individual and $3,600 for a family (up to a maximum of $2,500 for a n individual and $5,000 for a family; these amount; a Medisave plan would integrate the catastrophic plan with a medical savings account. An AHP would be required to provide for uniform cost-sharing and to prohibit balance billing for uniform benefits. An AHP could not offer additional benefits if it had the effect of reducing costsharing below the uniform cost-sharing. The uniform costsharing (established as part of the uniform benefit package) would: include only those amounts that would constrain consumers from eeeking unnecessary care, balance the impact on premiums and utilization of appropriate services, establish an annual limit, and prohibit the imposition of such charges on covered clinical preventive services. Under lower costsharing plan, enrollees would pay the following copayments: $10 for ov d e n t services, $25 T xital enlergency wtpatient services, 'ental 1I.R. 30801s. 1533 (MlcheVLott) States could require certain State health alliance program participants to pay all premiums and cost sharing of a group health plan. The amount of the contribution for persons between 100 percent and 200 percent of poverty would be based on a sliding scale. Contributions could also be required for other persons enrolled on an opt,ional basis by the 11.R. 37041s. 1770 (W. ThornaslChafee) COST-SHARING The N I P would be required to reduce cost sharing amounts for low income persons eligible H.R. 39181s. 1807 (SantorudGramrn) M. BENEFICIARY COST-SILARINC M. BENEFICIARY COST-SHARING M. BENEFICIARY COST-SHARING Maximum h e ~ l t h insurance plan deductible would be $1,000 per individual and $2,000 per family prior to 1998; future increases would be tied to the CPI. The out+fpocket limit would be $5,000 for years prior to 1998 with future increases tied to the CPI. The Commission would be required to specify the cost-sharing requirements for the standard package and the catastrophic package. The standard package would include deductibles, copayments, coinsurance and out+fpocket limits; the catastrophic package would include a general deductible (larger than any under the standard package) and out+fpocket limit (and could include other deductibles, copayments, and coinsurance specified by the plan). The Commission would establish multiple cost sharing schedules that varied by the type of delivery system used. The Commission would establish a limit on total cost-sharing that could be incurred by a family within a class of family enrollnlent. Catastrophic health insurance plans eligible for the new premium tax deduction would have a deductible (both individual and family) of a t least $3,000; this amount would be indexed in future years to the CPI for all urban consumers. Catastrophic health insurance plans eligible for the new premium tax credit would have a deductible equal to the greater of 20 percent of adjusted gross income or $3,000 (this figure would not be indexed). The Commission could not set cost-sharing 11.R. 36001s. 1757 (Administration plan) other specified services such a s hospice and home health care. The Board would determine the amount of coinsurance for out-ofnetwork services; in general, it would be a t least 20 percent and the sanie for all out-ofnetwork services. Under t h e higher cost sharing plan, individuals would pay a $200 deductible and families $400; a separate $250 deductible would apply to drugs. Enrollees would pay 20 percent coinsurance (50 percent for outpatient psychotherapy and 40 percent for certain dental services); no coinsurance would apply for preventive services, including well-baby and prenatal care. Under the combination cost-sharing plan, cnroIIes using preferred providers would pay the low cost sharing anlounts; those using out-of-network providers 1I.R. 120015. 491 (McDermott/Wellstone) 1I.R. 30801s. 1533 (MicheULott) H.R. 32221s. 1579 (CooperIBreaux) State. Certain current Medicaid beneficiaries would be protected from increased cost-sharing charges. for cost-sharing -istance to nominal amounts. I1.R. 36981s. 1743 (Stearnsmlckles) 1r.R. 37041s. 1770 (W. ThomasIChafee) requirements for severe niental illness t h a t did not apply to other items and services. 1I.R. 39181s. 1807 (Santorum/Cramm) I1.R. 36001s. 1757 (Admlnlstration plan) would pay the higher amounts. Providers would not be perniitted to balance t~ill,i.e., charge or collect from the enrollee a fee in excess of the applicable fee schedule payment amount. I1.R. 120019. 491 (McDermott/Wellstone) I1.R. 308015. 1533 (MlcheWtt) R . R 322219. 1579 (CooperIBreaux) I I. R. 369815. 1743 (StearnaNlcklee) I1.R 37041s. 1770 (W. ~ h o m a s / C h a f e e ) R . R 391815. 1807 (Santorum/Gramm) 1I.R. 36001s. 1757 (Administration plan) H . R 1200lS. 491 (McDermott~Wellstone) H.R. 308015. 1533 (Mtchel/Lott) H.R. 32221s. 1579 (CooperIBreaux) 1I.R. 36981s. 174.3 (StearnslNicklee) VII. PROVIDER PAYMENTS VII. PROVIDER PAYMENTS VI1. PROVIDER PAYMENTS No provision. No provision, except that direct providers of services would be required to collect and provide all standardized information required by a qualified general access health plan in order to receive payment for services furnished under a benefits package (other than emergency services). No provision. VII. PROVIDER PAYMENTS VI1. PROVIDER PAYMENTS VII. PROVIDER PAYMENTS VII. PROVIDER PAYMENTS Providers would enter into agreements with health plans for the purposes of rei~nbursementfor the provision of all covered services in t h e comprehensive benefit package. After negotiations with providers t h e regional allinnces would establish a fee schedule to pay providers under the feefor-service component of any health plan. States could adopt a state-wide fee schedule for fee-forservice plans which would be used by plans within the alliances. Each State would make payments to hospitals and nursing facilities for services under a n annual prospective global budget developed through annual negotiations between the State health security program and facilities based on a nationally uniform system of cost accounting established by the Board. No provision. No provision. Providers would not be allowed to balance bill, that is charge or collect from a patient R fee in excess of t h e fee schedule adopted by the alliance for services covered under the gt~araliteedbenefit package. Ari alliance o r State could use prospect ivtl Payments for home health services, hospice care, home and community-based longterm care services, and facility-based outpatient services would be based on a global budget, a capitation amount, a fee schedule developed by the State program, or a n alternative prospective payment method approved by the State. Independent health care practitioners would be entitled to be paid a fee - H.R. 37041s. 1770 (W. ThomasIChafee) H.R. 39181s. 1807 (SantorumfGramm) 1I.R. 360015. 1757 (Admlnietration plan) H.R. 1200lS. 491 (McDermott/Wellstone) budgeting to contain costs under fee-forservice plans. In this instance, t h e relevant providers would negotiate with t h e alliance or S t a t e to develop a budget for the ke-for-service plans, including spending targets for each sector (physicians, hospibls, home health care, etc.). for each billable covered service. The Board would develop models and encourage State health security programs to implement alternative payment methodologies that incorporate global fees for related services or for a basic group of services, such a s primary care services. Providers would be prohibited from balance billing for benefits provided, and payment received from a State health care security program would constitute payment in full. If a provider knowingly and willfully billed for an item or service or accepted payment in excess of the State program's payment, the Board could impose sanctions for each violation. State programs would be required to establish a ~rospectivep a y n l e ~ ~ t schedule with fees designed to provide incentives for 1I.R. 30801s. 1533 (Mbhel/Lott) H.R. 32221s. 1579 (CooperlBreaux) I1.R. 36981s. 1743 (Stearns/Nlcklee) I1.R. 37041s. 1770 ThomasIChafee) ( W. R . R 39181s. 1807 (SantorumlGramm) lI.R. 36001s. 1757 (Administration plan) H.R. 1200/S. 491 (McDermott/WeILtone) practitioners to choose primary care medicine (including general internal medicine and pediatrics) over medical specialization. Fees would be based on a relative value scale, conversion factors, volume performance standards, adjusted by class of service (mental health, substance abuse treatment, dental, and other services) and geographic area, similar to that established under t h e Medicare program. Provider payments would not be made under a State health security program for any cost attributable to capital expenditures which had not been approved by the State program. Comprehensive health service organizations would receive payments from the Stat.e health security progranl based on a global budget or a capitated arnount for its enrollees. 1I.R. 308015. 1533 (Michel/Lott) H.R. 32221s. 1579 (Cooper/Breaux) 1I.R. 36981s. 1743 (Stearna/Nlckles) i1.R. 37041s. 1770 (W. ~ h ~ m a s / C h a f e e ) H.R. 39181s. 1807 (Santorum/Gramm) I1.R. 36001s. 1757 (Administration plan) I1.R. 1200lS. 491 (McDerrnott/Wellstone) An Advisory Committee on Prescription Drugs would be required to make recommendations to the Board to establish classifications of prescription drugs and biologicals necessary for t h e maintenance or restoration of health, and the Board would be required to determine a maximum product price recognized as the cost of the drug. Independent pharmacies would be paid the drug's cost to the pharmacy (not more than the established price set by t h e Board) plus a dispensing fee. The Board would also be required to establish a product price list for approved durable medical equipment and therapeutic devices and equipment. I1.R. 30801s. 1533 (MtcheVLott) I1.R. 32221s. 1579 (CooperlBreaux) I1.R. 369818. 1743 (Stearns/Nickles) 1I.R 37041s. 1770 (W.ThomasIChafee) H.R. 39181s. 1807 (Santorum/Gramm) 1I.R. 360015. 1757 (Administration plan) E1.R. 1200lS. 491 (McDermott/Wellstone) 1I.R. 3080lS. 1533 (MicheVLott) H.R. 322215. 1579 (Cooperl'reaux) H.R. 36981.9. 1743 (Stearnsmlckles) WII. EXPENDITURE TARGETS: PREMIUM TARGETS VIII. EXPENDITURE TARG ETS: PREMIUM TARGETS VIII. EXPENDITURE TARGETS: PREMIUM TARGETS VIII. EXPENDITURE TARG ETS: PREMIUM TARGETS VIII. EXPENDITURE TARGETS: PREMIUM TARGETS VIII. EXPENDITURE TARGETS: PREMIUM TARGETS VIII. EXPENDITURE TARG ETS: PREMIUM TARGETS A. Expenditure Targets A. Expenditure Targets A. Expenditure Targets A. Expenditure Targels A. Expenditure Targets A. Expenditure A. Expenditure Targets If the growth in national health care spending was not slowed through price competition in t h e newly restructured private insurance market and other reforms, a "backstop" budgeting and premium regulation process would be triggered. A national health care budget would be established hy the NHB for expenditures for services covered under t h e comprehensive benefit package. The Board would be required to establish an annual budget that would not exceed the budget for the preceding year increased by the percentage increase in the GDP. The budget would consist of components for capital expenditures, administrative costs, and operating and other expenditures, and the Board would allocate funds to the State health security budgets established and submitted by the State programs. No provision. No provision. No provision. No provision. The health budget would be enforced by the NHB. For each year, alliances would submit the final bids a ~ i denrollnients for each health plan to the NHB. Based on these preniiunis and ~nroIIments,t h e NfJB would ~011iputet h e State budgets would be required to limit administrative expenses to 3 percent of total expenditures. State health programs could provide up to 1 percent of the budget for programs to provide assistance to workers H.R. 370415. 1770 (W. ~ h o m a s / C h a f e e ) Targets H.R. 391813. 1807 (Santorum/Gramm) Nonbinding expenditure targets would be established for Medicaid and Medicare, based on spending in FY 1994. The Medicaid t a r g t percentincrease would in FY 1995, by 6.86.9 percent in FY 1996, and 7 percent in FY 1997 and later years. Target increases for Medicare would be 9.4 percent for FY 1995, 8.9 percent for FY 1996, 8.5 percent for FY 1997, and 8 percent for FY 1998 and later years. To meet the targets, Federal Medicaid spending would be subject to binding per capita growth limits (see below); limits would not be established for Medicare. 1I.R. 3600lS. 1757 (AdmlnLtratlon plan) H.R. 120015. 491 (McDermott/Wellstone) weighted average accepted bid for each alliance. T h e NHB would then notify each alliance if t h e WAP exceeded its per capita prenliunl target, and if so, the amount of its reduced WAP. If the alliance's weighted average accepted bid did not exceed its per capita premium target,then it would be in compliance. If it exceeded the target, then plans whose premiums exceeded the target would be required to reduce their premiums. In t h e first year, those plans whose prenliunls exceeded the target would be subject to the payment reduction. In subsequent years, the reduction would be applied t o those plans whose dollar increase exceeded t h e allowed dollar increase for t h e alliance (i.e., t h e CPI plus percentage nllowances in early years). Any health plan would be able t o voluntarily reduce its bid to come illto involved in t h e administration of health insurance system who might experience economic dislocation a s a result of implementation of this health program. State health programs would be required to establish a process for approving capital expenditures. If State spending exceeded its annual budget, the State would be required to continue to fund covered health services from its own revenues; if a State provided all covered services for less than t h e amount budgeted for a year, the State would be allowed to retain its full Federal payment for the year. H.R. 30801s. 1533 (MlcheULott) H.R. 32221s. 1579 (CooperiBreaux) I1.R. 36981s. 1743 (StearnslNlckles) I1.R. 37041s. 1770 (W. ThomasIChafee) H.R. 39181s. 1807 (Santorurn/Cramm) 11.R. 36001s. 1757 (Administration plan) 1I.R. 120015. 491 (McDermott/Wellstone) 1I.R. 308015. 1533 (MicheVLott) H.R. 322215. 1579 (CooperlBreaux) 11.R. 36981s. 1743 (Stearns/Nlckles) H.R. 370418. 1770 (W. ~ h ~ m a s / C h a f e e ) H.R. 39181s. 1807 (Santorum/Cramm) compliance with the targets. R. Premium Targets B. Premium Targets B. Premium Targets B. Premium Targets R. Premlum Targets B. Premium Targets B. Premium Targets The NHB would establish a national baseline per capita pren~ium"target" using current per capita health expenditures for the comprehensive benefit package, trended forward to 1996, reflecting projected increases in private health care spending (including up to 15 percent in administrative costs). With this national per capita baseline target as a reference point, the NHB would then calculate for each alliance a per capita premium target, adjusted to reflect existing regional variations in spending, rates of uninsurance and underinsurance, and other specified Factors. The weighted average of all the alliance targets would have to equal the No provision. No provision. No provision. No provision. No provision. No provision. 1I.R. 36001s. 1757 (Administration plan) national per capita baseline target. The per capita premium targets for each alliance would be updated by the CPI to reflect inflation. An additional allowance of 1.5 percentage points would be provided in 1996, dropping to 1.0 in 1997, 0.5 in 1998. and no allowance in 1999. In 1998, t h e NHB would recon~mendto Congress an inflation adjustment factor for the years beginning with 2000. Corporate alliances would also be subject to similar budget constraints. In addition to reducing alliance payments to health plans exceeding the target, the plan premium reductions resulting froni this c~iforcenientprocess would aKect t h e preliiiums paid by eriiployers and rolisunlers to t h e allia~icennd t h e payiiients made by the plnns to providers. H.R. 120015.491 (McDerrnott/Wellstone) H.R. 308015. 1533 (MicheULott) H.R. 322215. 1579 (CooperlBreaux) I1.R. 36981s. 1743 (StearnslNickles) I1.R 370418. 1770 (W. 'rhomaslchafee) H . R 39181s. 1807 (Santorum/Cramm) 1I.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 32221s. 1579 (CooperlBreaux) IX. PRIVATE IIFA1,TII INSURANCE IlEFORM IX. PRIVATE IIEALTII INSURANCE . REFORM IX. PRIVATE IIEALTII INSURANCE REFORM M. PRIVATE HEALTII INSURANCE REFORM IX. PRIVATE IIFALTII INSUIWNCE REFORM IX. PRIVATE II~I,TII INSURANCE REFORM HEALTH INSURANCE REFORM A. G e n e r a l A p p r o a c h A. G e n e r a l A p p r o a c h A. G e n e r a l Approach A. General Approach A. Genera1 Approach A. General A p p r o a c h A. G e n e r a l Approach To sell health insurance through a regional or corporate alliance, a n insurer (health plan) would have to be certified by the State as being in compliance with Federal standards. All insurance covering the comprehensive benefits package would be regulated in this nlanner. (Other than insurance sold to large enlployers (generally over 5,000 employees) through a corporate alliance), certified plans would be sold through regional alliances to individuals, not employers. All plans would have to nieet mininium conditions of participation est.ablished by the NHB, including standards for financial solvency, marketing, r o ~ i s u ~ n eprotection, r confidentiality, conlplaints review, No provision, except that each State health security program would be required to prohibit the sale of health insurance in the State if payment under the insurance would duplicate payment for any items or services for which payment would be made under the State program. T h e bill would limit the use of preexisting condition clauses and require continuity and renewability of coverage for all group health plans, including multiemployer plans (Taft-Hartleys), and multiple employer arrangements. In general, States would be responsible for regulating the group insurance market unless the Secretary of HHS determined that such regulation was not adequate. In that case, the Federal Government would enforce the market rules. The bill would apply Federal insurance regulation to health plans sold to individuals and employers as well to health plans sponsored by employers. All plans seeking qualification as AHPs (and thus qualification for favorable tax treatment) would have to register with the NHB. The NHB would be responsible for specifying and enforcing the Federal insurance requirements and for collecting and distributing certain AHP information. States would be responsible for regulating the solvency of insured plans; the NHB would do so for plans that are not To become a qualified health insurance plan (and thus eligible for the favorable tax treatment described above), a health plan would have to meet specific Federal standards. These standards would be developed by the NAIC, or in the event of its failure to do so, by the Secretary of HHS, and would in general apply to individual and employer-sponsored policies. (By 1997, insured employersponsored plans would have to comply with the bill's requirements to become qualified health insurance plans. Sponsors of self-insured plans would come under the bill's requirements upon enactment. Note that starting in 1997, employers would no longer be making direct premium payments to The bill provides for standards for qualified health plans, i.e., those plans under which all persons must be covered once mandated individual coverage became emective. Small employers (fewer than 101 employees) and insurem selling to persons not connected to an employer or other group would have to omer coverage under a qualified gencml access plan, which would have to meet specific rating, underwriting and other rules and omer the standardized benefit package (see "Benefits"). Large employers would have to omer coverage under a qualified health plan. The bill generally prohibits insurers and employers from canceling health insurance plans or denying renewals of coverage. It would enable individuals to buy new individual policies and groups to move from group to individual plans without being denied coverage because of preexisting conditions or health status. It would also change existing health insurance continuation coverage requirements under Consolidated Omnibus Budget Reconciliation Act (COBRA, P.L. 99-272) to enable eligible persons to buy COBRA policies with high deductibles. In addition, the bill would prohibit insurance plans eflective after the date of enactment from Additional requirements would be applied to insurers selling to small employers (2 to 50 employees). All such insurers would have to sell standardized policies called MedAccess plans. AHPs sold to employers with fewer than 100 employees and to The Secretary of HHS would be required to request that the NAIC develop specific LX. PRIVATE H.R. 1200/S. 491 (McDermott~Wellstone) verification of provider credentials, data management and reporting, utilization management, and disenrollment for cause. Insurers selling policies to supplement the comprehensive benefit package or cover its cost-sharing requirements would hnve to comply with Federal and State requirements. Corporate alliances would be overseen by the Federal Government (through the Department of Labor) and would have to comply with new Federal standards and the Employee Retirement Income Security Act (ERISA), as modified by this bill. In the years prior to full inlplementation of the nlliance system, t h e i~lsurancemarket would Ire regulated by t h e States (or in t h e absence of effective S t a t e regulation, t h e Secretary of 1111s) 1I.R. 30801s. 1533 1I.R. 37041s. 1770 (W. ThomasIChafee) (MlchelJLott) The bill does not regulate the nongroup (individual) market. The NAIC would develop the rules for regulating the market; if it failed to develop adequate rules and standards, the Secretary of HHS would do eo. The States would be required to implement and enforce the standards. A State could implement more stringent standards but it could not implement standards preventing the offering by an insurer of a t least one MedAccess standard, catastrophic, and medisave plan. The Secretary would establish a n Office of Private Health Care Coverage within HHS to report annually to Congress on the implementation and enforcement of the MedAccess standards, and evaluate the impact of the reforms on the availability of affordable hea1t.h coverage for sniall employers that individuals not obtaining insurance through employers could only be sold through HPPCs. All AHPs would have to: provide for the uniform set of effective benefits (specified by the NHB); adjust the cost eharing for low-income individuals; meet quality etandards epecified by the NHB; not discriminate in enrollment or provision of benefits: establish etandard premiums for the uniform set of effective benefits; meet certain financing solvency requirements; and meet additional requirements. Open AHPe (those whose enrollment is not limited to a particular group of individuals such as the plan of a large employer) would have to meet additional requirements as described below. Employers could provide and insurers could sell insurance supplementing the unifornl elTective benefit insurers for employees' insurance. See "Financing." above.) The standards for federally qualified health plans would be implemented and enforced by the States. If a State failed to establish regulations or if the State's regulatory program was decertified by the Secretary of HHS, the standards would be enforced by the Secretary. standards to implement the standards for qualified general access plans. If within a specified deadline, the NAIC failed to develop such standards (in the form of a model act and model regulations) or the Secretary found that such standards were inadequate, the Secretary would be required to develop them. States would be required to establish a program to certify qualified general access plans. If the State failed to do so, its responsibilities would be assumed Secretnry.by the In the period prior to State action, a n insurer could only offer a n insured health plan that met specific Federal standards related to guaranteed eligibility, availability, and renewability; nondiscrimination; financial solvency; rating limits; and mediation procedures. H.R. 39181s. 1807 (SantotudGramm) increasing their premiums based on the preexisting condition or health status of the insureds. The bill would preempt State and local laws restricting the formation of small employer purchasing groups as well as State and local laws mandating benefits or restricting managed care and utilization laws. Conditional upon funds being available from savings in the Medicare and Medicaid programs, the bill provides for Federal allotments to States that establish insurance pools for individuals who would otherwise be unable to purchase high deductible insurance policies as a result of their preexisting conditions. The allotments would assist the States in providing premium subsidies for pool coverage for eligible individuals. H.R. 36001s. 1757 (Administration plan) under Federal transitional rules relating to underwriting, rating, and portability. To ensure t h e availability of insurance during this transition period, the Secretary could organize a national risk pool financed through enrollee premiums and assessments on insurers and self-funded plans. I1.R 1200/S. 491 (McDermott~Wellstone) H.R. 3080/S. 1533 (MbhellLott) H.R. 32221s. 1579 (CooperlBreaux) purchase group health coverage for employees. package. Such coverage could not duplicate the uniform benefit package or reduce the required cost-sharing. 1I.R. 36981s. 1743 (SCearnaINickles) I1.R. 37041s. 1770 (W. Thomas/Chafee) In general, many of the same standards applicable to qualified general access plans (e.g., guaranteed eligibility Tor coverage; nondiscrimination based on health status; benefits; enrollment; information; and quality assurance) would apply to qualified large employer plans but only to the employees of the large employer. These and standards specifically applicable to large employer plans, i.e., financial solvency, payment of premiums, mediation procedures, and offering of different benefit packages, would be specified by the Secretary of HHS in consultation with the Secretary of Labor, and taking where appropriate, into consideration those standards established by the NAIC. Health plans offered under the FEHBP would have to comply with the standards for large eniployer plans. H.R. 39181s. 1807 (Santorum/Cramm) 1I.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 1200lS. 491 (McDermott/Wellstone) H.R. 308015. 1533 H.R. 32221s. 1579 (MlcheVLott) (CooperIBreaux) H.R. 39181s. 1807 (SantorudGramm) B. Avallablllty B. Avallabillty B. Avallablllty B. Avallablllty B. Availability B. Avallablllty B. Avallablllty A certified plan would have to accept every eligible person enrolled by an alliance and could not terminate or limit coverage for the conlprehensive benefit package. No plan could engage in any practice that had the effect of attracting or limiting enrollees on the basis of personal characteristics, anticipated need for health care, age, occupation, or amliation with any person or entity. ~ l s o a, plan could not discriminate or engage in any activity, including the selection of service area, that had the effect of discriminating against an individual for these and other specified reasons. Further. a plan could not discriminate on such bases in the selection of providers for its network. With State approval, a plan could Iinlit ellrolln~e~lt on the I>asisof its capacity No provision. States could ensure availability of insurance to small employers through guaranteed issue (must accept all eligible applicants) or guaranteed availability (must ensure that there is a source of insurance for those eligible and wanting to buy). Under a guaranteed issue approach, all insurers selling in the small group market would have to offer health insurance coverage to each small employer in a State through a MedAccess standard, catastrophic, and medisave plans. Insurers offering MedAccess plans to small employers would be required to accept every small employer who applied for coverage and every eligible individual who applied for enrollment during open enrollment periods or within 30 days of losing previous enlployer coverage. (Federally qualified and certain Open AHPs would have to have an agreement with each HPPC for each HPPC area in which they are offered. In general, an open AHP would have to accept all eligible individuals who applied for coverage (i.e., eligible employees of small employers and eligible individuals not obtaining insurance through an employer) during an open enrollment period. Coverage &uld not be refused or terminated except for cause (e.g., nonpayment of premiums, fraud or misrepresentation; or plan termination). Network AHPs could deny coverae for an eligible individual if the person lived outside the network area, or if the plan had reached capacity, but only if such denials were applied uniformly, without regard to or insurability. On or after January 1, 1998, all qualified health plans would have to sell insurance to all applicants a t standard rates (see "Rating" below) and could not cancel or refuse to renew coverage except for cases of nonpayment of premiums, or fraud or misrepresentation on the part of the policy holder. Qualified general access plans. Once market reforms were enforced by the States, an insurer could not exclude from coverage any eligible employee or eligible individual applying for coverage. It could not deny. limit, or condition coverage under (or the benefits o n the plan based on the health status, claims experience, receipt of medical care, execution of an advanced directive, medical history or lack of insurability, of an individual. An insurer could not cancel an individual or group health insurance plan or deny renewal of coverage under such a plan other than for cause (i.e., nonpayment of premiums; fraud or other misrepresentation, and noncompliance with plan provisions), or because the insurer was ceasing to provide any health insurance plan in a State, or in the case of an HMO, in a geographic area. An insurer who terminated the offering of health insurance plans in an area could not offer such a plan in the area for 5 years. An insurer would have to offer qualified general access plans throughout an entire HCCA area. (The insurer could deny coverage under the plan to eligible persons who reside outside the HCCA in which such plan was offered but only if such denial was applied uniformly, without regard to insurability. In addition, an insurer Employers could not cancel a self-insured group health plan or deny renewal of coverage other than for cause or because the plan was ceasing to provide coverage in a geographic area. Insurers with individual policies in effect on the ll.R. 36001s. 1757 (Adrnlnlstratlon plan) stability, but only if enrollment was liniited uniformly, without regard to insurability. During t h e period of transitional reforms, a n insurer could not cancel a policy t h a t was enforce on t h e date of enactment of a n individual o r group. The Secretary would be authorized to organize a national risk pool to ensure t h a t health insurance was available during the transition period for individuals who lose coverage or who are unable t o obtain coverage because of health status. Pools would be financed through enrollee pren~iumsand ~ s s e s s n ~ e non t s insurers and self-funded plans. States with existing ptmls could continue their operation to enroll those currently insured through t h e pools into the new Federal pool, maintaining t h e ~ a n l e level of S t a t e financial contributio~~s. H.R. 1200/S. 491 (McDermott~Wellstone) 1I.R. 3080/S. 1533 1I.R 32221s. 1579 (MlcheVLott) (CooperIBreaux) other HMOs would be exempt from this requirement under specific conditions.) Under a qualified availability approach, a State could set up a mechanism under which insurers participating in the small group market would have to participate in a n assigned risk pool among some or all insurers (see "Reins~rrance"below) and ensure that through this pool, small employers have access to a MedAccess standard, catastrophic, and medisave plans. 11.R. 36981s. 1713 (StearnslNickles) 1I.R. 37041s. 1770 (W. ThomasIChafee) could apply to the certifying authority (State or Secretary) to limit enrollment in a plan under epecific conditions such as limited capacity.) Qualified access plans would have to be renewed a t the employer or enrollee's option unless the plan was terminated for cause (nonpayment of premiums; fraud or hisrepresentation; or change in residence to a HCCA not eerved under the plan). An insurer could terminate a qualified general access plan made available through a specific type of delivery system (such as an HMO) if it does so uniformly across the HCCA and provides adequate notice. In this event, it could not niarket such a policy in the State for five years. During the transition period, an insurer could deny enrollment to those who fail to apply for coverage on a tiniely 1I.R. 39181s. 1807 (Santorum/Cramrn) date of enactment would have to ofler persons insured under those policies the option to purchase new policies. Premiums for such new policies could not be increased based on the health of the insured. Payments by enrollees for individual policies failing to comply with these requirements would not be deductible as a n individual medical expense. A State could establish a risk pool program for persons with preexisting conditions who would otherwise be unable to obtain catastrophic insurance policies a t premiums less than 150 percent of the area average for their age and gender, and who met other criteria. A catastrophic plan is defined by the bill as a plan covering medical services having a t least a $3,000 deductible, indexed for inflation. States fulfilling requirements specified below could receive 1I.R. 36001s. 1757 (Administration plan) H.R. 1200lS. 491 (McDermott/Wellstone) 1I.R. 30801s. 1533 (MicheVCott) H.R. 32221s. 1579 (CooperlBreaux) 11.R. 36981s. 1743 (StearnaINickles) H . R 37041s. 1770 (W. ThomasIChafee) basis, generally m e a n t to be during a n a n n u a l initial enrollment period lasting a t least 30 days o r immediately after losing coverage from another source. such as employment. H.R. 39181s. 1807 (SantorudCramm) Federal allotments to cover costs in excess of amounts collected from enrollee premiums. The bill authorizes such s u m s a s may be necessary t o fund the S t a t e allotments which would be available beginning in 1996. However, Federal allotments would be available only if the requisite Medicare and Medicaid savings were achieved. (See "Financing above.) T o be eligible t o receive a Federal allotment, a S t a t e would have to apply t o t h e Secretary a t such time, in such manner, and containing such information, as the Secretary may by rule . require. T h e application would have to include a n assurance by t h e S t a t e t h a t all administrative costs of t h e insurance p l program would be borne by t h e S t a t e from resources other than the Federal allotment. I1.R. 36001s. 1757 (Administration plan) H.R. 1200lS. 491 (McDermottlWellstone) H.R. 30801s. 1533 (MichellLott) 1I.R. 322215. 1579 (CooperlBreaux) l1.R. 36981s. 1743 (Stearns/Nickles) 1 1 . ~37041s. . 1770 (W. ~hornas1Chafee) 1J.R 39181s. 1807 (Santorurn/Cramm) The State's pool program would provide premium assistance to eligible individuals to obtain catastrophic insurance from the pool. The State would be required t o accept bids from private insurance carriers t h a t desire to administer the pool and provide catastrophic health insurance plans to individuals with preexisting conditions. The State could accept such a bid, or, after determining that no such bids were acceptable, could administer the program itself. In considering bids, the State (in consultation with private carriers) would be required to compile a profile of individuals with preexisting conditions, including information on: (1) the number of such persons eligible for premium assistance; (2) the estimated cost of providing niedical services to eligible persons; (3) the estimated amount of 1I.R. 36001s. 1757 (Administration plan) R.R. 120015. 491 (McDermott~Wellstone) R.R. 308015. 1533 (MicheVLott) H.R. 322215. 1579 ( CooperlBreaux) 1I.R. 36981s. 1743 (Slearns/Nickles) 1I.R. 37041s. 1770 H.R. 391815. 1807 (Santorum/Cramm) (W. ~ h o m a s l c h a f e e ) . premiums to be paid by eligible individuals; (4) the estimated amount by which the cost of the medical services would exceed received premiums; (5) the estimated amount of Federal assistance needed to cover the excess costs; and (6) other information determined appropriate by the State. Eligibility for premium assistance would be determined by the pool administrator. To be eligible, a person would have to have a preexisting condition, have been charged more than 150 percent of the average premium (for the person's area, age, and gender) for a catastrophic health insurance plan, and not have any avoidable health conditions (including medical conditions relating to smoking, alcohol abuse, harmful and othertoactivities health) which are the sole reason for having been I1.R. 3600IS. 1757 (Admlnlstration plan) 1I.R. 1200/9. 491 (McDermott~Wellstone) H.R. 308019. 1533 (Mlchel/L,ott) R.R. 322219. 1579 (CooperlBreaw) 1I.R. 36981s. 1743 (StearnalNlcklea) 1I.R. 37041s. 1770 (W. ~ h o m a s l c h a f e e ) H.R. 39181s. 1807 (Santorum/Cramm) charged a premium in excess of 150 percent of the average. A preexisting condition is a condition having been diagnosed or treated during the 6-month period prior to the start of coverage. Anyone with income above 200 percent of poverty, or who was eligible for a partial or full tax credit to purchase catastrophic insurance (see "Financing" above), but who failed to purchase a catastrophic policy within 1 year after enactment, also would not be eligible for premium assistance under this p o l program. The amount of premium assistance available to a n eligible individual would equal the amount by which the premium paid by t h e individual for the catastrophic plan exceeded the greater of 150 percent of the average premium paid for catastrophic insurance plans by persons of the same I1.R. 36001s. 1757 (Admini~trationplan) H.R. 1200lS. 491 (McDermot t/Wellstone) 1I.R. 3080lS. 1533 (MicheULott) H.R. 322219. 1579 (CooperfBreaux) 1I.R. 369818. 1743 (Stearns/Nicklee) I1.R. 37041s. 1770 ThomasIChafee) ( W. H.R. 39181s. 1807 (SantorumlCramm) area, age, and gender or 7.5 percent of the individual or family adjusted gross income. Premium assistance would not cover charges attributable to any avoidable health conditions, including medical conditions related to smoking, alcohoi abuse, drug abuse, and other activities harmful to health. C. l'ortabiiity C. Portability C. Portability On full implementation prohibits imposition of pre-existing condition exclusions. During the transition, permits use of an exclusion only by anv.insured or selfi, only if the plan .n exclusion No provision. Provides that a preexisting condition exclusion under any group health plan could apply only to a condition diagnosed or treated within 3 months before the first day of coverage (without regard to any general waiting period for new employees) and could last no more than 6 months; no exclusion could be imposed on newborns or for services related to pregnancy. Requires that the exclusion be waived for a condition if the enrollee was previously 4- Provides that a preexisting condition exclusion under any AHP could apply only to a condition diagnosed or treated within 3 months before the first day of coverage (without regard to any general waiting period for new employees) and could last no more than 6 months; no exclusion could be imposed on newborns or for services related to pregnancy. Provides that, if a new enrollee is in a period of continuous coverage for a service, the exclusion C. Portability C. PortabiUty C. Portablilty Provides that no preexisting condition exclusion could be imposed by a federally qualified plan after January 1, 1998, on an individual who was continuously insured under any private plan or specified federallyfunded public plan for 1 year prior to the date of application for the plan. Requires State regulatory systems to provide for a "passback for such persons, under which the new plan would pay the previous plan a portion of Provides that a preexisting condition exclusion under any qualified plan (including general access and large employer plans) could apply only to a condition diagnosed or treated within 3 months .before the first day of coverage (without regard to any general waiting period for new employees) and could last no more than 6 months; no exclusion could be imposed on newborns or for services related to pregnanq. Provides that, if a new enrollee is in a period of The COBRA continuation of coverage requirements under the Internal Revenue Code would be amended to require that the coverage provided to persons qualified for COBRA be identical to the coverage provided similarly situated active employees except that such COBRA coverage also be offered with an annual $1,000 deductible and a $3,000 deductible. The bill would also provide for termination of COBRA coverage once a person 1I.R. 36001s. 1757 (Adminlstratlon plan) 6 months; no-exclusion could be imposed on newborns. Provides that, if a new enrollee is in a period of continuous coverage for a service, t h e exclusion period for t h e service is to be reduced by 1 month for each month in the period of continuous coverage. Defines a continuous coverage period a s beginning on the date the individual was enrolled in any public or private plan covering the service and ends when the individual has not been so enrolled for more than 3 months. Permits a n employer or self-insured plan to impose a uniform waiting period for coverage of new employees, provided there is no discrimination against employees or dependents on the basis of health status. H.R. 120019. 491 (McDermott/Wellstone) H.R. 3080lS. 1533 (MicheULott) H . R 322219. 1579 (CooperlBreaux) 1I.R. 36981s. 1743 (Stearns/Nlckles) covered for the condition under any other health plan within 60 days before enrollment, or within 6 months in the case of a n enrollee losing coverage because of termination of employment. period for the service is to be reduced by 1 month for eachmonth in the period of continuous coverage. Definq a continuous coverage period as beginning on the date the individual was enrolled in any AHP covering the service and ends when the individual has not been sa enrolled for more than 3 months. Providea that persons enrolling in.an AHP before July 1, 1995, shall be deemed to have been in a period of continuous coverage during the 6 months ending January 1, 1995. premiums received, and the previous plan would be responsible for claims relating to a preexisting condition for the lesser of 2 years or the period of treatment or spell of illness for the condition. For persons not . continuously covered, permits an exclusion for no longer than the lesser of 1 year or the number of months before application during which the individual was not insured and the condition had been diagnosed. Prohibits imposition of an exclusion for persons applying for coverage during 1997. Permits a n employer to impose a 60 day waiting period for coverage of new employees. An insurer could not require a n employer to impose a waiting period. Requires immediate offering of AHP enrollment to new employees. 1I.R. 37041s. 1770 (W. ~homas1Chafee) continuous coverage for a service, the exclusion period for the service is to be reduced by 1 month for each month in the period of continuous coverage. Defines a continuous coverage period as beginning on the date the individual was enrolled in any qualified plan or equivalent health care program covering the service and ends when the individual has not been so enrolled for more than 3 months. Provides that coverage must be offered during the month following t h e month a new employee is hired. An insurer could not require an employer to impose a waiting period. H.R. 39181s. 1807 (SantorurnJCramm) became eligible for employer based coverage for more than 90 days. Individuals would be permitted to make penalty-free withdrawals from their qualified retirement plans to pay the premiums for COBRA coverage. conversion Rights. Persons under a group health plan in effect on the date of enachnent would have to be offered by the plan's insurer (or, in t h e case of a selfinsured plan, the plan's sponsor) the option to purchase a n individual policy upon leaving the group. T h e premium for this plan could be based on actuarial data and on t h e preexisting condition and health status of the insured. The insurer would also have to offer t h e employer or group sponsor t h e option to purchase a new group plan, t h e premium for which could not be increased based on the health of the group's insured. In addition, 11.R. 36001s. 1757 (Administration plan) H.R. 12001S. 491 (McDermott/Wellstone) 1I.R. 308019. 1533 (MicheVLott) 1I.R. 322215. 1579 (CooperlBreaux) 11.R. 36981s. 1743 (Siearns/Nlckles) 1I.R. 37041s. 1770 (W. ~homas1Chafee) 1I.R. 39181s. 1807 (Santorum/Cramm) the insurer would have to offer a n individual leaving a new group plan the option of converting to an individual policy, the premium for which could not be based on any preexisting condition or increased due to the health status of the insured. A self-insured plan in effect on the date of enactment would have to offer its enrollees the option t o enroll in an individual health plan and contract with one or more insurers to provide such individual policies to those electing them. Premiums for such individual policies could be based on the insured's preexisting conditions or health status. For self-insured plans in effect after the date of enactment, the premiun~sfor persons converting to individual policies would be rated on actuarial data but could not be based on any preexisting condition or health of I1.R. 36001s. 1757 (Administration p l a n ) H.R. 120019. 491 (McDermott/Wellstone) 1i.R. 308019. 1533 (Michewtt) H.R. 322219. 1579 (CooperIBreaux) If .R. 36981s. 1743 (StearnslNlcklc~) 1I.R 370415. 1770 (W. ThomasIChafee) 1i.R. 39181s. 1807 (Santorum/Gramm) the insured and could not be increased based on the health of the insured. Payments made by employers on behalf of employees to group health plans failing to meet these provisions would not be deductible for the employer and would be included as taxable income to employees. (Such tax penalties would not apply to the COBRA provision. Employers failing to comply with the COBRA provision would be subject to an excise tax. 1 D. R a t i n g Restrictions D. R a t i n g Restrktiona D. R a t l n g Restrictions D. R a t i n g Restrictlona D. R a t i n g Restrictions D. R a t i n g Izestrictlona D. R a t l n g Restrictions On full implementation, requires health plans to coniniunity rate; t h a t is, rates for t h e comprehensive benefits could not vary except by faniily type within a n alliance area (or, for a corporate alliance, within a designated premiuni area based on Inbor niarket or heallti NO provision. Limits variation in premium rates charged by a n insurer to small groups. Insurers could divide their small group business into classes, based on marketing method, acquisition of groups from another insurer, participation of a group in an association, use of Requires all AHPs to establish standard rates for the uniform set of benefits. Rates could vary only by HPPC area, family type, and age, and could not be changed during a calendar year. The Commission would establish standard rate factors to reflect family Premium rates charged by a federally qualified health insurance plan could vary only by age, sex, and gmgraphy; rates would have to be the same for new applicants and existing policyholders with siniilar demographic characteristics. A plan could offer discou~itsto Limits variation in premium rates charged by an insurer to individuals and groups under a qualified general access plan (but not under a large employer plan). For enrollees under age 65, rates could vary only by age, fatilily type, benefit plan (standard versus See above discussion of health plan conversion rules under "portability." For existing insurance contracts, there is no limitation on rating. For newly issued individual and group contracts, rating must be done on a n actuarial basis but cannot be - ll.R. 36001S. 1757 (Admlnlstratlon plan) care delivery areas). Rate factors for family types would be established by t h e Roard. During t h e transition, restricts changes in premiunls for health insurance plans in effect as of t h e date of enactment. Premiums could be modified for changes in age, gender, family composition, or geographic distribution of enrollees o r for changes in plan benefits or terms, but not for changes in health status of specific enrollees or employer groups. Premium increases related to health costs or utilization would have to apply equally to all purchasers, except that separate increases would be permitted for individuals and for groups under 100; variation in premium increases based on clninls experience would bc pernlitted for g r o u p of more t.han 100. Overall prenlium increases in excess of a percentage specified H.R. 120015. 491 (McDermott~Wellstone) H.R. 308015. 1533 H.R. 322215. 1579 (Mlchebtt) (CooperlBreaux) managed care in the plan, or other factors approved by the State. The index rate for a class of business (the average of the lowest and highest rates established for the class) could not be more than 20 percent higher than the index rate for any other class. This limit would not apply to a class if (a) the class is one for which the insurer has never rejected eligible small employers or individuals; (b) groups are not involuntarily transferred into or out of the class; and (c) the class is currently available for purchase. An insurer could transfer any employer from one class to another involuntarily, or offer a voluntary unless a similar offer was made to other employers in the class. Within a class, rates could vary by denlographic characteristics, irlcluding age, gender, type and age; the highest age factor could be no more than twice the lowest age kctor. 1I.R. 36981s. 1743 lI.R. 370415. 1770 (StearnslNIckles) (W.ThomasIChafee) enrollees participating in health promotion, prevention, or screening programs. catastrophic), and HCCA. (Coverage areas would be established by States and could not split an MSA or contain fewer than 250.000 people.) The insurance reform standards would specify permissible rating factors for family type and age groups; the highest age factor could be no more than twice the lowest age factor. In addition, the difference in rates from one age group to the next (within the under 65 population) could not exceed 20 percent in the first year a State's certification program was operating, phasing down to 10 percent in the sixth and later years. The insurance reform standards could allow premium variations based on differences in marketing and administrative costs, but rates could not vary for this reason within a particular purchasing group. H.R. 391815. 1807 (Santorum/Gramm) based on any preexisting condition or health status of the insured. The bill would preempt State and local laws restricting health plans from reducing premiums or allowing incentives for individuals to pursue healthy lifestyles. 11.12. 36001s. 1757 (Admlnistratlon plan) H.R. 120015. 491 (McDermott/Wellstone) t1.R. 308015. 1533 (Mlchebtt) H.R 3222/S. 1579 (CooperlBreaux) ff.R 36981s. 1743 (Siearns/Nickles) (W. ThornaslChafee) M.R. 37041s. 1770 H.R. 3918/S. 1807 (SantorumfGramm) E. Rlsk Adjustment a n d Relnsurance E. Rlsk Adjustment a n d Relnsurance E. Rlsk Adjustment a n d Relnsurance Federally qualified health insurance plans would be required to participate in a Stateadministered reinsurance or risk adjustment system designed to compensate Each qualified general access plan would be required to participate in a Statesstablished risk adjustment program, using adjustment factors established as part of No provision. geographic area, family composition and group size. For groups with comparable demographic characteristics, rates could vary by health status or other factors, but the highest rate could not exceed the lowest by more than 50 percent in the first 3 years after the State has established its standards, or more than 35 percent in later yeare. the Secretary would be subject to prior approval. The annual premium increase for any employer within a class of business could not exceed the increase in premiums charged to newly covered employere in the same class by more than 15 percent. E. R i ~ AdJustment k E. Rlsk Adjustment E. Rlsk Adjustment and R e l n s u r a n c e a n d Relnsurance a n d Relmurance E. Riek Adjustment a n d Relnaurance On full implenientation, requires regional ~IIinncesto use risk ndjustn~entand reinsurance t~~ethodologies estnblished by t h e Iioard. Under risk No provision. States would be required to establish one or more reinsurance or allocation of risk systems for insurers in the small group market, in accordance with niodels developed by the HPPCe would be required to risk-adjust premiums paid to open AHPe, using factors established by the Commission. Factors would reflect relative risk for consumption of 1I.R. 36001s. 1757 (Admlnlstratlon plan) adjustment, a plan would be paid more or less than its quoted premium rate depending on the actuarial risk presented by the persons enrolled in the plan a s compared to all enrollees in the alliance. The Board would develop factors for use in the adjustment, including demographic characteristics, health status, geography (within a n alliance area), socioeconomic status, and any other factore detern~inedby the Board to be material. (Receipt of AFDC or SSI would be included unless the Board determined t h a t other factors accounted for differences in utilization by welfare recipients. States would have the option of making further adjustments to promote enrollnlent of n~embers of disadvantaged groups. Under the reinsurance system, health pla~ls would make payments to a state-established pool that would H.R. 1200lS. 491 (McDermott/Wellstone) H.R. 30801s. 1533 (MlcheULott) NAlC or the Secretary. (Under reinsurance, an insurer would designate certain individuals or groups as "uninsurable" and these individuals would be covered through a central pool; under risk allocation "unineurable" applicants would be assigned equitably among small group insurers.) The Secretary could establish a system in a State that failed to do so; the allocation of risk approach would be used in such a State only if the Secretary determined that reinsurance was inappropriate. If the Secretary established a reinsurance system, costs of such a system would be financed through a tax on en~ployergroup pren~iunlsof all health insurers in the State (including large group insurers but not selfinsured plans). services, as well as differences in utilization resulting from higher proportions of enrollees eligible for low-income cost-sharing assistance. HPPCs would also have the option of using epecial risk-adjustment factora for AHPe serving individuals in designated urban or rural underserved areas. In addition, there would be a system for equitably distributing among open and closed AHPs, and across HPPC areas, any required reductions in plan revenues for persons eligible for low-income premium assistance. 1I.R. 36981s. 1743 (Stearns/Nlckles) 1i.R 37041s. 1770 (W. ThomasIChafee) for disproportionate distributions of risks among plans. the insurance reform standards. Factors would reflect relative risk for consumption of covered health services and would, to the extent possible. be determined without regard to the delivery system used in the provision of services. H.R. 39181s. 1807 (Santorum/Cramm) lI.R. 360015. 1757 (Administration plan) H.R. 120015. 491 (McDermott~Wellstone) I3.R. 308015. 1533 (Michebtt) H.'R. 322215. 1579 (Cooper/Breaux) I1.R. 36981s. 1743 (StearnsMickles) 1I.R 37041s. 1770 ThomasIChafee) ( W. H.R. 391815. 1807 (Santorum/Gramm) compensate plans for part of the cost of treating specified classes of high-cost enrollees and spedified high-cost treatments or diagnoses. F. Other Requirements F. Other Requirements F. Other Requirements F. Other Requirements F. Other Health plans selling through the regional alliances would be prohibited from distributing marketing materials making false or materially misleading information and would have to get prior approval of all niarketing n~aterials from the alliance. Plans could not selectively market and could not condition the sale of the coniprehensive benefit package upon the purchase of another policy. No provision. T h e bill contains no specific prohibitions on marketing. An AHP could pay a commission or other remuneration to an agent or broker for marketing the plan to individuals or groups but could not vary such remuneration based, directly or indirectly, on the anticipated or actual claims experience associated with the group or individuals to which the plan was sold. Insurers would be allowed to select agents to.market their plans and to determine the amount and form of compensation of those agents except that the insurer could not terminate or refuse to renew the agent's contract for any reason related to the age, sex, health status, and other characteristics used to determine the insurance risk of an applicant placed by the agent with the plan, and the insurer could not directly or indirectly enter into an agreement or arrangement with an agent that provides for, or results in, any consideration provided to such agent for the issuance or renewal of a policy to vary on Plans would be required Lo provide information on costs, ~ r o v i d e r qualifications, utilization control nnd quality assurances procedures, and t h e r i ~ h t sand The following State laws would be preempted: (1) mandated benefit laws (including lawe requiring a type of benefit, coverage, or provider); (2) anti-group laws which restrict the ability of 2 or more employers from obtaining coverage through an insured nlultiple employer group; (3) specific restrictive laws on managed care plans; and (4) laws regulating MEWAS that provide health benefits and meet certain Federal standards. To be exempt from State laws, MEWAs that Open AHPe would be required to enter into risk-sharing agreements under Medicare (if eligible), and to enter into an agreement with the Ofice of Personnel Management to offer a health plan under the Federal EmployHealth Benefit Program. Requirements F. Other Requiremenls F. Other Requirements The bill would prohibit marketing or other practices by an insurer selling to small employem or individuals that is intended to discourage or limit the issuance of a qualified general access plan to an eligible employee or eligible individual on the basis of health status or other risk factors. An insurer could not vary commissions or other remuneration to an agent or broker on the basis of the claims experience or health status of individuals enrolled. Insurers selling qualified general access plans would have to meet financial solvency requirements. The bill does not include provisions regulating the marketing of insurance policies or requiring insurers or other entities to provide plan information to consumers. The bill would override State laws that prohibit two or more employers or groups from obtaining coverage under a multiple employer health plan. It would also preempt States and localities from requiring the coverage of specific benefits, services, or categories of health care or services of any type of employer under any group health plan (and not just those marketed by purchasing groups). Additionally, it would I1.R. 36001s. 1757 (Administration plan) responsibilities of consumers and patients. A plan would also have to establish a benefit clainis dispute procedure, which would provide consuniers with the right to appeal to the alliance onibudsman or pursue other legal remedies. The proposal would modify ERISA's preemption of State regulation of employer . benefit plans so t h a t States would only be preempted from regulating employers and health benefit plans in corporate alliances. The proposal would further amend ERISA to establish certain requirements for employers and others sponsoring health benefit plans in corporate alliances. These would include such requirenients as: ensuring t h a t all enrollees would be provided with a t least the guaranteed benefit package; con~plyingwith H.R. 1200lS. 491 (McDermott/Wellstone) 1I.R. 3080lS. 1533 (Michel/Lott) H.R 32221s. 1579 (CooperlBreaux) J1.R. 36981s. 1743 (StearnsNlckles) are not fully insured would have to be granted an exemption by the Federal Government conditioned upon paying a filing fee, providing specific information, demonstrating adequate reserves, and solvency. The bill specifies additional requirements for MEWAs seeking an exemption from State regulation and provides for changes in ERISA and the Internal Revenue Code to encourage the establishment of MEWAs. The following State laws would be preempted: (1) mandated benefit laws (including laws requiring types of benefits, coverage, or providers); (2) specific restrictive laws on managed care plans ("network" plans); and (3) lawe restricting utilization review programs. account such risk factors. In general, MEWAs could not have a role in marketing policies to small employers with benefits duplicating the uniform set of effective benefits. The Secretary, in consultation with the NAIC, is required to develop nonbinding standards for premium rating practices and guaranteed renewability of coverage which, if the insurer so elects, is more generous (additional benefits or lower cost sharing) than the requirements specified in the bill for federally qualified health insurance plans. The insurer or new sponsor of an employersponsored health plan (be it an employer, union, purchasing cooperative or other entity) would have to notify all of the primary insured beneficiaries of the plan of their right to convert to a federally qualified health insurance plan offered by the insurer with benefits identical to, or actuarially equivalent, to those the of the employer-sponsored plan 1I.R. 37041s. 1770 (W. ThomasIChafee) Insurers selling qualified health plans (not just qualified general access plans) would have to provide information designed to enable consumer comparison of plan performance, use uniform claims forms (see "Administrative Simplification"), maintain a quality assurance program that complies with the bill's standards (see "Quality"), and establish a mediation procedures program (see "Malpractice"). The bill provides for large employer plan termination procedures to ensure timely payment of all benefits for which the plan is obligated and for regulations to be established to provide for temporary coverage of affected persons. The hill would amend ERISA to extend its various enforcement, reporting, and disclosure provisions to large employer health plans in preempt for 5 years after enactment State laws imposing certain restrictions on the use of managed care and utilization review by group health plans. The bill would require the GAO to study the regulatory and legal impediments a t the Federal, State, and local levels of government that restrict the ability of small business and other organizations from joining together voluntarily to allow employees or members to pool their health insurance purchases. The GAO would be required to report to Congress with appropriate recommendations within 2 years after enactment. (See 1II.A above.) 1I.R. 36001s. 1757 (Administration plan) information and notification provisions; ensuring compliance standards with respect to uniform claims; complying with grievance and benefit dispute procedures; and complying with financial reporting standards. A State electing the State-wide single payer option could require all employers, including large, self-funded employers to participate in the single-payer system. The bill would also preempt specific State anti-managed care laws, and certain State corporate practices acts relating to the corporate practice of nledicine and to provider ownership of health plans or other providers. Multiple employer welfare arrangements t hZEWAs) could not liiarket health illsurance duplicating t h e c o t ~ ~ ~ r e h e n sbenefit ive package. H.R. 1200lS. 491 H.R. 308015. 1533 H.R. 322215. 1579 ( McDermottlWeIlstone) (Micherntt) (CooperlBreaux) 1I.R. 36981s. 1743 (StearnsMickies) H.R. 37041s. 1770 (W.~ h o m a s l C h a f e e ) and the rates of that coverage. Beneficiaries would have 60 additional days to decline or accept the new coverage. Beginning in 1997, the employer sponsored plan could only offer such coverage a t rates which vary only be age, sex, and geography except that the combined total of the new rates could not exceed the total group rate paid by employers and employees or both under the employer-sponsored plan on the last day it is or was in force. which the employer contributes. It also would change ERISA to eliminate s t a t e regulation of multiple employer welfare arrangements providing health benefits t h a t are certified by the Secretary of Labor. Such certification would be conditioned upon satisfying specific requirements (e.g., the MEWA meets the standards for qualified large employer plans, is administratively feasible, and protects the righta of covered persons). The bill includes no specific language amending the laws governing MEW&. The following State laws would be preempted: ( 1) mandated benefit laws (including laws requiring types of benefits, coverage, or providers); and (2) specific restrictive laws on managed care plans ("network" plans). H.R. 39181s. 1807 (SantorudCramm) . 1I.R. 360015. 1757 (Administration plan) H.R. 1200lS. 491 (McDermott/WelIstone) X. A1)MINISTRATIVE SIMPLIFICATION X ADMINISTRATIVE SIMPLIFICATION X. ADMINISTRATIVE SIMPLIFICATION X ADMINISTRATIVE SIMPLIFICATION X ADMINISTRATIVE SIMPLIFICATION X A1)MINISTRnTIVE SIMPLIFICATION A. Overview A. Overview A. Overview A. Overview A. Overview A. Overview The American Health Security Standards Board would be required to establish policies, procedures, guidelines, and requirements related to eligibility, enrollment, benefits, providers participation standards, the determination of medical necessity and appropriateness, quality assurance, and other administrative duties. The Secretary would be required to adopt standards relating to data elements for use in paper and electronic claims processing under health benefit plans, utilization review and management of care; uniform claim forms, including uniform procedure and billing codes for use with such forms; and uniform electronic transmission of data elements. Standards for electronic transmission of data elements would supersede standards adopted for the submission of paper claims. The Secretary would be required to promulgate standards relating to claims processing data and uniform paper claims within 12 months of enactment; within 24 months of enactment pron~ulgatestandards The Board would be required to promulgate, and could periodically modify, requirements to facilitate and ensure the uniform treatment of individually identifiable health care information in electronic environments The Board would be required to establish goals and timeframee for the progress to be made by the health care industry in eliminating unnecessary paperwork, and achieving standardization in electronic r e c e i ~ and t transmission of health care claims, health plan information, and eligibility verilication. The Board would also require the industry to achieve uniformity in the format and content of basic claim forms under health plans and in the use of common identification numbers Similar to H.R. 3080/5. 1533, except no provision for grants to demonstrate and conduct research on the application of comprehensive information systems for continuously monitoring patient care and improving patient care, establishing the elIicacy of communication links between information systems between health plans and health care providers, or developing regional or communitybased clinical information systems. The Health Care Data Panel would be required to develop regulations for the implementation and ongoing operation of a n integrated electronic health care data interchange system. The panel would be responsible for adopting standards for the electronic reporting and exchange of health care information, establishing business practicee for t h e operation of a nationally-linked health care information database system, and developing appropriate civil and criminal penalties for noncompliance. The Secretary of HHS would be required to adopt standards to reduce the administrative and paperwork burdens of all Federal health care programs by 50 percent within 2 years of enactment, and by an additional 50 percent of the remaining balance over a subsequent 3year period, for a total reduction of 75 percent over the 5-year period following enactment. The Secretary would be required to adopt standards relating to: 1) data elements for use in paper and electronic claims processing, utilization review, and management of care under health insurance plans; 2 ) uniform claims forms; and 3) uniform electronic transmission of data elements for purposes of billing and utilization review. Within two years of enactment, t h e Board would be required to develop and implement a health information system to collect, report, and regulate t h e collection and dissemination of health care information, including data on enrollment in health plans; clinical encounters and services provided; administrative and financial transactions and activities of the alliances; and other insurance functions. The health information system would be developed and implemented in a manner consistent with the privacy and security standards established by the Board (descri1)ed I~elow)and the otjectivcs of reducing atl~llinistrativecosts, specifying t h e uses and T h e Board would establish uniform reporting requirements and standards to ensure an adequate national data base regarding health practitioners, services and finances of State health security programs, approved plans, providers, and the costs of facilities and providers, including health outcome measures. H.R. 32221s. 1579 (CooperlBreaux) 1f.R. 37041s. 1770 (W. ThommlChafee) X. ADMINISTRATIVE SIMPLIFICATION (Adminlstration plan) types of health care data that would be collected and reported. As part of t h e health information system, the Board would oversee the establishment of a n electronic data network consisting of regional centers t h a t would collect, compile, and transmit information. In the interim, the Board would also be required to develop, promulgate, standards, within one year of enactment, to streamline paper health care data trnnsactions. The s b n d a r d s health care benefit forms would include enrollment ~ n d disenrollnient forms, clinical encounter records, and claim forms for submission of claims for benefits or payment under a health plan. Providers and health benefit plans would be required to use the fornis proniulgated by the Ronrd on or after 270 days after t h e publication of the stnndnrd forliis. H.R. 120015. 491 (McDermott/Wellstone) I1.R. 308015. 1533 (Michebtt) for the uniform electronic transmission of information concerning hospital and physician services; and by a later date determined to be feasible for the uniform electronic transmission of information for other services. If the Secretary determined 2 years after promulgating the standards that a significant number of claims for benefits for services are not being submitted in accordance with these standards, the Secretary could require, after a t least 6 months notice, that all health care providers must submit claims to plans in accordance with the standards. The Secretary would make such a determination if it was found that the requirenient would result in significant, measurable additional gains in efficiencies for the administration of the health care system. The Secretary could I1.R. 322215. 1579 (CooperlBreaw) for beneficiaries and providers of items or eervices under health plans. Similarly, the Board would be required to establish national goals and time frameworks for the industry in achieving uniformity in the rules for determining the liability of insurers when benefits are payable under two or more health plans. 1l.R. 36981s. 1 743 (StaarnsINicklcs) 1I.R 37041s. 1770 (W. ThomasIChafee) H.R. 391815. 1807 (SantorumJCramm) In order to be eligible for any Federal funds in connection with any State-administered health care program, States would be required to standardize the processing of paper and electronic claims to reduce the administrative and paperwork burdens of such programs by 75 percent during the 5year period following enactment. At the end of the 4-year period after enactment, if the Secretary determined that a State had not achieved substantial progress toward the required reductions, the Secretary would notify the State regarding the reduction necessary to achieve compliance. If a t the end of the 5-year period the State had not achieved the required reductions, the Secretary would reduce Federal payments for health care programs administered by the State by 10 percent. For each subsequent year that the Stnte I1.R. 36001s. 1757 (Administration plan) H.R. 12001S. 491 H.R. 322215. 1579 (McDermott~Wellstone) H.R. 39181s. 1807 - impose a civil money penalty on any provider that knowingly and repeatedly submitted clainls in violation of such standards. The Secretary would be required to promulgate standards for hospitals concerning electronic medical data. The data standards would include standards for electronic patient care data and protections against its unauthorized use, standards concerning the transmission of electronic medical data, and standards relating to confidentiality of patient-specific information. Data standards would be optional for other providers, but similar to those required for hospitals. The Secretary would be required to provide grants to qualified entities to demonstrate and conduct research on the application of con~prehensive information systems for ,r. . ... .. failed to comply with these requirements, Federal payments for such health care programs would be further reduced by an additional 10 percent. States subject to Federal payment reductions could appeal to the Secretary for a 1-year waiver of such reductions. To achieve further paperwork reduction during the subsequent 3-year period following enactment, the Secretary would be required to modify by regulation the initial standards adopted based on recommendations reported by the Standardized Form Commission. Established within 12 months of enactment, the Commission, composed of 12-20 representatives of private health care providers and insurers, would be required to make recommendations regarding the further standardization of paper l1.R. 360015. 1757 (Administration plan) H.R. 120015. 491 (McDermott/Wellstone) H.R. 308015. 1533 (Michewtt) continuously monitoring patient care and improving patient care; would be allowed to provide between 2 and 5 grants to community organizations or coalitions of providers, plans, and purchasere to establieh and document the efficacy of communication links between information systeme between health plans and health care providers; and would be allowed to provide between 2 and 5 grants to public or private nonprofit entities to develop regional or community-based clinical information systems. 11.R. 322215. 1579 (CooperlBreaux) 1 1 . ~ .36981s. 1743 (Stearnsflickles) lI.R. 37041s. 1770 ~homasIChafee9 ( W. H.R. 391815. 1807 ( S a n t o r u m / C ramm9 and electronic claims processing to reduce paperwork burdens and enhance the eficiency and productivity of claims processing. The Commission would be required to report findings and recommendations to the Secretary by not later than 24 months after enactment. The Secretary would then be required to take the Commissions recommendations and submit them to Congress for consideration in the form of a n implementing bill by not later than 3 months after the Commission had submitted its report. Health care providers or insurers failing to comply with any recommendations of the Comn~issionthat are enacted and applicable would be ineligible for payments of claims submitted under any provision of the Social Security Act or the ll.R. 360015. 1757 (hdminlstration plan) H.R. 120015. 491 (McDermott/Wellstone) H.R. 3080/S. 1533 (Michel/Lott) H.R. 322215. 1579 (CooperlBreaux) 1l.R. 36981s. 1743 (Stearnsmickles) H.R. 370415. 1770 (W. T h ~ m ~ I C h a f e e ) 1I.R 391815. 1807 (SantorumlGramm) Public Health Service Act. n. Unique Identifier Numbers B. Unique Identifier Numbers B. Unique Identifier Numbers B. Unique Identifier Numbera R. Unique Identifier Numbers R. Unique Identifier Numbers R. Unique Identifier Numbers The Board would be required to establish a system to provide for a unique identifier nunlber for each eligible individual, employer, health plan, and health care provider. State health security programs would be required to assign unique patient and provider identifier numbers to be used in the processing of claims and for other purposes. Health plans would be required to use standard identification numbers for beneficiaries and providers by January 1, 1995. No provision. No provision. The panel would be required to develop unique identifiers for individual participants, health plans, and providers not later than 9 months after enactment. No provision. C. lIealth Security Carda C. Ilealth Security Carda C. IIeaith Security Carda C. Health S e c ~ r l t y Cards C. Health Security Cards C. IIealth Security Cards C. Health Security Cards The Board would be required to promulgate regulations for the pernlissible uses of health security cards, the form of the card and illformation to be encoded in electronic form on the card. No provision. The Secretary would be required to adopt standards related to use of a magnetized identification card for Medicare beneficiaries that would help providers determine eligibility and help them bill the Medicare program. The Secretary would also be required to encourage States to design and use Medicaid identification cards for beneficiaries. No provision. No provision. No provision. No provision. lI.R. 3600/S. 1757 (Administration plan) H.R. 1200/S. 491 (McDermott/Wellstone) D. Confidentiality of llealth Care Information D. Confidentiality of The Board would be required to promulgate standards to safeguard the privacy of individually identifiable health information by no later than 2 years after enactment. The Board would also be required to develop a detailed proposal for legislation to provide a coniprehensive scheme of Federal privacy protection for individually identifiable health information three years after enactment. A National Privacy and Health Data Advisory Council would be established to advise the Board on its duties related to health information systenis and adniinistrative sitilplification. H.R. 3080tS. 1533 (MicheULott) B.R. 3222/S. 1579 (CooperlRreaux) 1i.k 3698/S. 1743 (StearnslNickles) D. Confidentiality of Health Care Information D. Confidentiality of Health Care Information D. Confidentlality of iiealth Care Informatlon D. Confidentlality of Health Care Information D. Confidentiality of Health Care Information The Board would be required to establish standards designed to protect the privacy of identifiable patient data included in the uniform electronic data base. The Secretary would be required to establish standards for confidentiality of health care information, including standards to protect against the unauthorized use and disclosure of information. The Board would be required to promulgate, and could modify, requirements to facilitate and ensure the confidential treatment of individually identifiable health care information in electronic environrnente. Such requirements would not be applied to States that already had laws in effect providing for the protection of confidentiality and privacy rights, including enforcement provisions of these laws, consistent with the Board's requirements. The Secretary would be required to adopt standards for protecting and assuring the confidentiality of patient information, including standards to protect against the unauthorized use and disclosure of information. The panel would be responsible for adopting standards that include strict measures ensuring the confidentiality of electronicallytransmitted patient data. Standards established for uniform electronic transmission of data elements (for billing and utilization review) would include protections to assure the confidentiality of patient-specific inforniation and to protect against the unauthorized use and disclosure of information. E. State Quill Pen 1,nws E. State Quill Pen E. State Quill Pen Laws E. State Quill Pen Laws E. State Quill Pen Laws E. State Quill Pen Laws E. State Quill Pen Laws Stnt.e quill pen laws would tw pree~ilpted1~ standards estnl~lishedLly No provision. State quill pen laws would be preenipted After 1994, State quill pen laws would be preenipted. State quill pen laws would be preempted as of January 1, 1996. No provision. No provision. Health Care Information ~ W R 1i.R. 3704/S. 1 770 (W. ThomasIChafee) H.R 3918/S. 1807 (SantorumlGramm) 11.R. 3600lS. 1757 (Administration pian) the Board for the maintenance of medical or health plan records, except in specified circumstances. 1I.R. 120015. 491 ( McDermottNellstone) 1I.R. 3080lS. 1533 (MicheULott) beginning January 1, 1994. H.R. 322215. 1579 (Cooper/Breaux) 1l.R. 36981s. 1743 (StearnslNickles) 1t.R. 37041s. 1770 (W. ThomaslChafee) H.R. 3918lS. 1807 (SantorumlCramm) H.R. 12001S. 491 (McDermott~Wellstone) H.R. 3080lS. 1533 (Admlnlstrallon plan) XI. MALPRAC'I'ICE XI. MALPRACTICE XI. MALPRACTICE XI. MALPRACTICE XI. MALPMCTICE XI. MALPRACTICE XI. MALPRACTICE A. T o r t Reforms A. T o r t R e f o r m s A. T o r t Reforms A. T o r t Reforms A. T o r t Reforms A. T o r t Reforms A. T o r t Reforms The bill would limit attorneys contingency fees (33 113 percent of total recovered 1, reduce awards for payments from collateral sources, and permit periodic payments of damages. No provision. The bill would limit noneconomic damages to $250,000; bar punitive damages except in extreme cases and require payment of such damages to State for quality assurance activities; provide for periodic of future losses in excess of $100,000; limit attorneys' fees (25 percent of first $150,000 recovered and 10 percent of any excess); eliminate joint liability; specify a 7-year statute of limitations; specify a uniform standard for determining negligence; and provide that a higher standard of proof required for obstetric claims where physician delivering baby did not provide prenatal care. Any party contesting alternative dispute resolution (ADR) ruling would be required to pay opposing parties legal fees unless the amount of damages H.R. 3222: The bill I1.R. 3698 and S. 1743: The bill would permit periodic payments where future losses exceeded $100,000; omset for payments from collateral sources; specify a uniform statute of limitations (2year from time ily'ury should have been discovered, 4 years from event, whichever is later); limit noneconomic damages to $250,000 (except where court finds that a reduction of a jury award to this level would be unjust); eliminate joint liability for noneconomic damages; and limit awards of punitive damages to extreme cases. The bill would limit attorneys' fees to 25 percent of recoveries, cap noneconomic damages a t $250,000, reduce awards for payments from collateral sources, permit periodic payments for future losses exceeding $100,000, require 75 percent of punitive damages to be paid to the State health care education and disciplinary program, limit statute of limitations to 2 years (longer for minors), and eliminate joint liability. Attorneys hired to represent a party to a suit would be required to disclose the estimated probability of success, hours required. and attorney fees; a t the close of action, a full disclosure of work and hours spent would be required. If court or adjudicating body determined that the The bill would limit noneconomic damages to $250,000 and would prohibit the award of noneconomic damages for medical product liability claims if the drug or device was approved by the Food and Drug Administration (FDA) or generally recognized as safe and effective pursuant to conditions established by the FDA (except in ca& of withheld information, misrepresentation, or illegal payment). It would specify a uniform statute of limitations (2 years from time iqjury should have been discovered, 4 years from event, whichever is later, with a longer time for minors); eliminate joint liability for economic and noneconomic perrnit periodic damages; A medical malpractice liability action could not be brought without a certificate of merit t i.e., an afidavit signed by a specialist t h a t there is reasonable and meritorious cause for the filing of the action). Individuals seeking t o enroll in health plans could obtain information reported to the national nlalpractice data bank on practitioners for whom reports were made on a repeated basis. (MlcheVLolt) H.R. 322215. 1579 (CooperlBreaux) would limit noneconomic damages to $250,000 and bar punitive damages for manufacturera of medical products. The Health Care Standards Commission would develop and recommend to the Congress alternative limits for payments for noneconomic damages by class of iqjury. Attorneys' fees would be limited (25 percent of first $150,000 recovered, 10 percent of any excess). Party contesting ADR ruling would be required to pay opposing parties legal fees unless the amount of damages awarded changed in favor of contestant. Individual filing a malpractice action would be required to submit a certificate of merit or post a surety bond with the court. H.R. 39181s. 1807 (SanlorumlGramm) H.R. 3698: Attorneys' fees would be limited to 40 percent of the first $50.000 recovered, 33 113 percent of the next $50,000, 25 percent of payments where future economic losses exceeded $100,000; and reduce 1f.R. 36001S. 1757 ( A d m l n b t r a t i o n plan) 1I.R. 120019. 491 (McDermott/Wellstone) H.R. 308019. 1533 H.R. 322219. 1579 (MicheVLott) (CooperlBreaux) awarded changes by more than 10 percent in favor of the contestant. S. 1579: A U.S. Commission on Malpractice Awards would be established to promulgate limits on noneconomic and punitive damages; awards would be limited to amounts set. H.R.3222 and S. 1579: Both bills would eliminate joint liability for noneconomic damages; allocate punitive awards to State provider licensing and disciplinary activities; permit periodic payments where future losses exceeded $100,000; set a 2-year statute of limitations (longer for minors); set a higher standard of proof where physician delivering baby did not deliver prenatal care; and establish a uniform standard for determining liability. tl.R 37041s. 1770 (W. ThomasIChafee) the next $500,000, and 15 percent of any excess. S. 1743: Attorneys' fees would be limited to 25 percent of first $150,000 recovered, 15 percent of any excess. claim was frivolous, it would impose a sanction against the attorney or claimant, as appropriate. H.R 391815. 1807 (Santorum/Gramm) awards for payments from collateral eources. Requests for discovery would be specific; the court would award prevailing party reasonable fees and expenses in connection with discovery motion (unless court found that position of unsuccessful party waa substantially justified ). The court would require the party against whom a judgment was rendered to pay the prevailing party's costs and fees, including attorneys' fees, unless losing party could show that the claim was substantially justified. The bill would limit attorneys' fees (25 percent of first $150,000 recovered, and 15 percent of any excess); require maintenance of records by attorney of record; and specify that the court would determine reasonable expenses and attorneys fees which could not exceed a reasonable amount (based on I1.R. 3600JS. 1757 (Administration p l a n ) H.R. 1200lS. 491 (McDermottlWellstone) H.R. 308019. 1533 (Michemtt) K R . 32221s. 1579 (Cooper/Breaux) 11.R. 36981s. 1743 (StearnelNickles) 1I.R. 37041s. 1770 (W. ~ h o m ~ l C h a f e e ) H.R. 391 81s. 1807 (Santorum/Gramm) specified criteria). Each nonsettling party could recover contribution and indemnification from any other nonsettling party who, if joined in the original suit would have been liable for damages. Any party who executed a release, dismissal or settlement agreement would be discharged from all claims from nonsettling or other settling parties. In a class action suit, the share of damages awarded to a representative claimant would be calculated in the same manner as for all other claimants; an attorney could not represent the class if the attorney paid or was obligated to pay a fee to a third party to assist the attorney in obtaining representation of any party to the action. ll.R. 36001s. 1757 (Administration plan) H.R. 120015. 491 (McDermott~Wellstone) H.R. 308015. 1533 (MicheULott) H.R. 322215. 1579 1I.R. 36981s. 1743 (Stearnsmickles) B. Alternative Dispute Resolution (ADR) R. Alternative Dispute Resoiution (ADR) B. Alternative Dispute Resoiution (ADR) No provision. Qualified health plans would be required to provide eflective mediation procedures for hearing and resolution of claims. If mediation failed, the parties would participate in ADR. No provision. 11.R. 37041s. 1770 (W. ThomasIChafee) H.R. 39181s. 1807 (Santorum/Gramm) Il. A l t e r n a t i v e L)ispute R e s o l u t i o n (AIIR) B. Alternative B. Alternative B. Alternative Dispute Resolution (ADR) Dispute Resoiution (ADR) Dispute Resolution (ADR) No medical malpractice linl)ility action could be brought until the final resolution of the claim under ADR. Each regional alliance and corporate alliance plan would be required to: (i) ndopt a t least one ADR method developed by the National Health Board (such a s arbitration, mediation, or early offers of settlement) for resolution of claims, ~ n d (ii) disclose procedures for grievances to enrollees. No provision. No medical malpractice liability action could be brought until after initial resolution of the claim under ADR meeting specified standards. Uncontested decision would have the same legal eflect as court action. H.R. 3222: No medical malpractice liability action could be brought until after initial resolution of the claim under ADR meeting specified standards. Uncontested decision would have the same legal eflect ae court action. C. P r a c t l c e Cuidellnes C. P r a c t l c e Guidelines C. P r a c t i c e Guidelines C. P r a c t l c e Guideiines C. Practice Guidelines C. Practice Guidelines C. P r a c t i c e C uideilnes The Secretary, within 1 year of determining nppropriate guidelines were available, would be required to establish a pilot program t o deterlrline t h e effect of applying practice The Council would develop practice guidelines; however there is no linkage between the guidelines and medical liability claims. No provision. The Secretary would make wants to a t least 10 States for development of practice guidelines that could be used to resolve liability claims. No provision. Providers following guidelines approved by Agency for Health Policy and Research would have a presumptive defense against claims. No provision. No medical malpractice liability action could be brought until the final resolution of the claim under ADR mechanism established by the State. A party challenging an ADR decision would be required to pay all legal fees if the court decision was less favorable for them. S. 1579: The Secretary would make 2-year g a n t a to a t least 10 model States for implementation and evaluation of ADR systems. I1.R. 3600lS. 1757 (Adminhtration plan) H.R. 12001s. 491 (McDermott/Wellstone) t1.R. 3080/S. 1533 (MicheVLott) H.R. 32221s. 1579 (CooperlBreaux) 1I.R. 36981s. 1743 (Stearnsflickles) H.R. 37041s. 1770 (W. ~ h o m a s l c h a f e e ) H . R 391 81s. 1807 (Santorum/Gramm) guidelines in the reholution of malpractice liability nctions. I). Enterprise Liability D. Enterprise Liablllty D. Enterprise Llability D. Enterpriee Llability D. Enterprtse Llability D. Enterprise Liability D. Enterprise Liability The Secretary would establish a den~onstrationproject by January 1, 1996, in one or more States to test the concept of enterprise liability under which the health plan rather t h a n the individual physician assumed liability. No provision. No provision. No provision. No provision. No provision. No provision. 1I.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 120015. 491 (McDermott~Wellstone) H.R. 308015. 1533 (Mlchel/Lott) H.R. 322215. 1579 (W p e r l B r e a u x ) XII. ANTI-TRUST XII. ANTI-TRUST XII. ANTI-TRUST XII. ANTI-TRUST XII. ANTI-TRUST XII. ANTI-TRUST XII. ANTI-TRUST The establishment of a fee schedule by a regional alliance would be considered to be pursuant to a clearly articulated and aIlirmatively expressed State policy to displace competition and to be actively supervised by the State. No provision. The Attorney General would establish guidelines under which a limited exemption from antitrust laws would be provided for entities entering joint ventures; liability for these entities would be limited to actual damages. H.R. 3222 and S, 1579: The President would be required to provide for the development and publication of explicit guidelines on the application of Federal anti-trust laws to AHPs. The Attorney General would establish a review process under which an AHP (or organization proposing to establish an AHP) could obtain a prompt opinion from the department of Justice on the plan's conformity with Federal anti-trust law. An exemption from antitrust laws would be established for the following safe harbors (meeting certain requirements): (1) combinations of providers if the number does not exceed 20 percent of the provider type or specialty in the area; (2) activities of medical self-regulatory agencies; (3) participation in surveys; (4)joint ventures for high technology and costly equipment and services; (5) mergers of 2 hospitals if one below 150 beds and 50 percent occupancy; (6)joint purchasing arrangements; and (7) negotiations. The Attorney General could designate additional safe harbors for activities designed to increase access or enhance quality or efliciencies. Further, the Attorney General would issue certificates of review under an expdited waiver process. Under Same as H.R. 3698/S. 1743. In addition, an Oflice of Health Care Competition Policy would be established in HHS. Same as H.R. 3080/5. 1533. The bill amends the McCarran-Ferguson Act to repeal the current exemption for health insurers. The Attorney General would issue a certificate of public advantage (providing exemption from antitrust laws) to entities entering joint ventures that meet specified criteria; criteria to be met include demonstration of greater emciencies, expanded access, reduced costs, and elimination of excess capacity. An anti-trust exemption would be provided for medical self-regulatory entities. An Interagency Advisory Conlmittee on Conlpetition, Anti-Trust Policy, and Health Care would be established. H.R. 3222: The requirement for issuance of certificates of public advantage same as H.R. 3080. II.R 37041s. 1770 (W. ThomasIChafee) H.R. 39181s. 1807 (SantorumlGramm) I1.R. 360015. 1757 (Administration plan) H.R. 1200/S. 491 (McDetmott/Wellstone) H.R. 3080lS. 1533 (MicheVLott) H.R. 322215. 1579 (Cooper/Breaux) 1I.R. 36981s. 1743 (Stearns/Nickles) certain conditions, joint ventures providing notifications of activities to the Attorney General would be subject to reduced penalties under anti-trust laws. I1.R. 37041s. 1770 (W. ~hornas/Chafee) 1i.R. 391 81s. 1807 (Santorum/Cramm) - 1I.R. 36001s. 1757 (Admlnlstratlon plan) H.R. 32221s. 1579 (Cooper/Breaux) XllI. QUALITY MII. QUALITY XIII. QUALITY MI!. QUALITY xrrr. QUALITY The Board would establish and oversee the National Quality Management Program administered by the National Quality Management Council. The Council would develop a set of national measures of quality performance to assess the provision of and access to health care services. National measures would be selected to provide information on access, appropriateness, outcomes, health promotion, prevention, and consumer satisfaction. T h e Council would recommend (in areas where it determined that suflicient information and consensus existed) that the Board establish goals for performance by health plans and providers on a subset of national measures of quality performance. The Council would also evaluate t h e impact of' H.R. 1200 and S. 491: The Council would collect data from outcomes research and, on the basis of this and clinical knowledge, develop practice guidelines which could vary by area. The Council would develop methodologies for profiling practice patterns and identifying outliers. States would be required to establish one or more entities to conduct quality reviews in accordance with established Federal standards. A State could use alternate standards if it could show they were as eflicacious in promoting and achieving quality of care. Within 6 years of enactment, the State comparative value information programs would be required to include information on quality and outcomes data. The Commission (Board under S.1579) would be required to establish minimum quality standards that AHPs would be required to meet. HPPCs would be required to conduct enrollee satisfaction s u r v e p and monitor enrollee disenrollment with AHPs. Provision relating to State comparative value information systems, same as H.R. 30801S. 1533. States would be required to use a uniform electronic data base (using uniform software developed by the Board ) for all patient records for systematic quality review and outconles The Secretary would be required to provide for the collection and analysis of data on cost, quality, and outcomes. The Secretary would provide up to $10 million a year for demonstrations and research on monitoring and improving patient care. Within 3 years of enactment, the Secretary would report to Congress recomnlendations regarding restructuring the Medicare peer review quality assurance program given the availability of hospital data in electronic form. The Commission (Board under S. 1579) would provide for submission of information by a specialized center of care (which is organized for the provision of specific wrvices) on the quality of care provided, including outcomes and risk factors. The information would be analyzed and compared with that of other specialized centers and other providers. A new Agency for Clinical Evaluations would support research on medical effectiveness, conduct effectiveness trials, maintain a mI1. QUALITY xrrr. QUALITY Each health plan would No provision. be required to have a quality assurance program meeting standards established by the Secretary; plans would be required to provide quality data, including information on outcomes and effectiveness. Federal research on effectiveness and outcomes would be expanded. The Secretary would provide for submission of information by a specialized center of care (which is organized for the provision of specific services) on the quality of care provided, including outcomes and risk factors. The information would be analyzed and compared with that of other specialized centers and other providers. A clearinghouse and other registries on clinical trials research would be developed. A 11.R. 36001s. 1757 ( A d m i n b t r a l i o n plan) H.R. 12001s. 491 (McDermott~Welbtone) the Act on quality and access. Alliances would be required to publish annual reports outlining the performance of each health plan on the set of national measures of quality performance. They would also publish the results cf consumer surveys. analysis. Patient confidentiality would be protected. The Council would direct the Administrator for Health Care Policy and Research to develop and review clinically relevant practice guidelines. The Council would also direct the Administrator to support research directly related to the identified performance nieasur&. The Board would establish a National Quality Consortium which would estahlish continuing education progrants, advise the Board, the Council and the Adnlinistrator, and oversee the developnient of regiolial professional foundations. H.R. 1200: Existing Federal requirements for utilization review would be replaced by January 1, 1998. S. 491: State programs could require, as a condition of payment, certifications for services comparable to those required for Medicare. A State could establish a utilization review program and deny payment to the extent services failed to meet coverage standards; routine utilization review for all cases would not be permitted. H.R. 30801s. 1533 (MicheVLoll) H.R. 322215. 1579 (Cooper/Breaux) clearinghouse on clinical trials and research data, and assure a p e m a t i c evaluation of existing as well as new treatments and diagnostic technologies. J1.R. 36981s. 1743 (Slearnsfllckles) 1i.R. 37041s. 1770 (W. ThomasIChafee) National Medical Research Trust Fund would be established with funding from voluntary transfers from tax overpayments and from spcified health-related civil penalties. H . R 39181s. 1807 (Santorum/Gramm) ll.R. 36001s. 1757 (Admlnlstration plan) The Medicare peer review program would be repealed. H.R. 1200/S. 491 (McDermott~Wellstone) 1I.R. 3080/S. 1533 (MlcheVLott) N.R. 32221s. 1579 (CooperlBreaux) I I.R. 3698/S. 1743 (Stearns/Nicklecl) H.R. 3704/S. 1770 (W. ThomaslChafee) H.R. 391 8/S. 1807 (Santorum/Cramm) 11.R. 36001s. 1757 (Admlnlstration plan) H.R. 120015. 491 (McDermott/Wellstone) I1.R. 30801S. 1533 (MlcheVLott) H.R. 32221s. 1579 (CooperfBreaux) 1I.R. 36981s. 1743 (Stearns/Nickles) 1l.R. 37041s. 1770 (W. Thomas/Chafee) I1.R. 39181s. 180'7 (Santorum/Gramm) XIV. FRAUD XIV. FRAUD XIV. FRAUD XIV. FRAUD XIV. FRAUD XIV. FRAUD XIV. FRAUD The Secretary and the Attorney General would establish a program: to coordinate the functions of the Attorney General, the Secretary, and other organizations with respect to prevention, detection, and control of health care fraud and abuse; to conduct investigations, audits, and similar activities relating to t h e delivery of and payment for health services; and to hcilitate enforcement of statutes applicable to health care fraud and abuse. The Secretary and Attorney General would coordinate with all applicable law enforcement agencies and with health alliances and health plans. Current Federal sanctions would apply to State health security programs in the same manner as they now apply to Medicaid. An all-payer anti-fraud and abuse program would be established in the Inspector General's Oflice: to coordinate Federal, State and local law enforcement programs relating to health care; to conduct investigations, audits, evaluations, and inspections relating to delivery of and payment for care; and to facilitate enforcement of relevant statutes. Authorizes $100 million in FY 1995 and such funds as a r e necessary in future years. No provision. Federal health antifraud and abuse sanctions would be applied to all fraud and abuse against any health insurance plan. All payer fraud and abuse control program siniilar to H.R. 3080; such funds as necessary would be authorized. No provision. An all-payer health care fraud and abuse account would be established in the Treasury with funds from fines and civil penalties placed in the account; account would I)c used for covering A national health care fraud data base would be established by the Board; reporting and disclosure requirements would be coordinated with those for the malpractice data base. Each State would be required to establish a State health care fraud and abuse control unit meeting specified requirements. Current limitations on physician self-referrals expanded to additional payers. (Provision drafted before enactment of P.L. 10366.) An anti-fraud and abuse trust fund would be established with Federal anti-fraud and abuse penalties deposited to the Fund. Federal health antifraud and abuse sanctions would be applied to all fraud and abuse against any health benefit plan. - Federal criminal penalties would be established for attempts to defraud by a health care provider. Rewards would be authorized for information leading to prosecution and conviction. Establishment of antifraud and abuse trust fund provision similar to H.R. 3080. Provision applying Federal anti-fraud and abuse sanctions to any health benefit plan sin~ilarto H.R. 3080. At the same time, existing fraud and abuse sanctions would be revised and strengthened. The Secretary would establish a national health care fraud and abuse data collection program for the reporting of final adverse actions (not including settlements where no finding of liability w a s made) against providers, suppliers, or practitioners. The information in the B.R. 360015. 1757 (Admlnlstration plan) costs of prosecuting health care matters and conducting investigations, audits, inspections, and evaluations. An HHS Ofice of Inspector General Asset Forfeiture Proceeds Fund would be established with funds used for investigations. The fraud and abuse control sanctions under the Social Security Act would apply to all payers. (At the same time, a number of clarifjring and strengthening changes would be made in the existing provisions.) The current Medicare and Medicaid limitations on physician selfreferrals would apply with respect t o health plans. (Changes and clnrifications would also be made in these provisions. Federal criminal pciialties would be established for certain frnudulent acts including sttenlpts to defraud a n alliance or Z1.R. 120015. 491 (McDermottlWellstone) 1i.R. 308015. 1533 (Michel/Lott) Federal criminal penalties would be established for attempts to defraud by a health care provider. Appropriations would be authorized for a t least 225 Federal Bureau of Investigation (FBI) agents and support staff, a t least 50 U.S. attorneys and support staff, and a t least 25 staff in the Inspector General's onice to work on health care fraud cases. Rewards would be authorized for information leading to prosecution and conviction. H . R 322215. 1579 (CooperIBreaux) 1I.R. 36981s. 1743 (StearndNlckles) ILK. 370415. 1770 ~hornaslChafee) ( W. database would be available Federal and to the State public, agencies, and health plans. The Secretary would publish a listing of adverse actions on a quarterly basis. Federal criminal penalties would be established for attempts to defraud a health care plan. H.R. 391815. 1807 (Santorum/Grarnrn) 1I.R. 36001s. 1757 (Administration plan) plan, false statements, bribery or graft, theft or embezzlement of alliance or plan funds, or nlisuse of health security card. H.R. 120015. 491 (McDermottlWellstone) H.R. 30801s. 1533 (MicheVLott) H.R. 32221s. 1579 (CooperlSreaux) I1.R. 36981s. 1743 (Stearns/Nicklee) 11.R. 37041s. 1770 (W. ~homaslchafee) H.R. 39181s. 1807 (Santorurn/Gramm) I1.R. 36001S. 1757 (Administration plan) H.R. 120015. 491 (McDermott/Wellstone) XV. MEDICARE XV. MEDICARE XV. MEDICARE XV. MEDICARE XV. MEDICARE XV. MEDICARE XV. MEDICARE A. M e d i c a r e a n d Ilevised S y s t e m A. M e d i c a r e a n d Revised S y s t e m A. Medlcare a n d Revised S y s t e m A. Medicare a n d Revised System A. Medicnre and Revised System A. Medicare a n d Revlsed S y s t e m A. M e d b a r e a n d Revised S y s t e m Current Medicare beneficiaries would continue to be covered under the existing Medicare program a s they are today, except that the working aged would continue to be covered under their employer-paid plans and could not enroll in Medicare until they ceased working. Persons enrolled in an alliance managed care plan before becoming Medicare eligible could, on turning 65, choose to remain in the plan and continue to receive comprehensive benefits through the plan. Medicare would pay t,he plan 95 percent of what it would have spent for a conlparable individual choosing regular Medicare coverage. Medicare would be eliminated and current beneficiaries would become entitled to the same comprehensive benefits as all other persons. Medicare HMO law would be amended to permit Mediuire~nly HMOs. All Medicare enrollees would be permitted to enroll in plans that provide benefits through provider networks and with lower cost-sharing. No provision. The Secretary of HHS would conduct a study on the feasibility of permitting future . Medicare beneficiaries, once they turned 65, to retain private insurance coverage and receive, in lieu of Medicare benefits, certificates for purchasing private insurance. The Secretary of HHS would develop a legislative proposal for enrollment of Medicare beneficiaries in qualified health plans. Current Medicare beneficiaries would have the option of obtaining services through their current arrangements, or enrolling in qualified health plans with payments not to exceed the lesser of the actual premium or 100 percent of the per capita payments made to HMOs or other riskbased plans. Medicare HMO law would be amended to encourage greater enrollment in HMOs and other managed care arrangements. All Medicare enrollees would be permitted to enroll in plans ("Medicare select") that provide benefits through provider networks with lower cost-sharing. Current Medicare beneficiaries (i.e., those eligible on or before September 30, 1994) could continue to be covered under the existing Medicare program a s they are today, or could elect to have Medicare make payments for their enrollment in a managed care plan or another private insurance plan, including a catastrophic plan with a medical savings account. For those electing (by March 31, 1995) to be covered under a private plan, Medicare would make a payment to the plan equal to the lesser of the plan's annual premium or the per capita aniount that the Secretary of HHS estimates Medicare would make for groups of beneficiaries (bawd on residence, age, and gender) still enrolled in States with regional alliance syst.enls could apply to the Secretary to i~lcludenll lor a , 1I.R. 36001s. 1757 (Admlnlstratlon plan) portion 00 Medicare beneficiaries in the alliances where they would choose among health plans. States would have to ensure t h a t a fee-for-service plan was available t h a t provided the equivalent of Medicare benefits a t no greater cost to beneficiaries t h a n under the regular Medicare program. States choosing to establish a single-payer system could also include Medicare beneficiaries in their system. Medicare HMO law would be amended to encourage greater enrollment in HMOs and other managed care arrangements. Medicare could also enter into contracts with point-of-service networks, under which e~lrolleeschoosing to use networks would pay lower cost-sharing. H.R. 1200lS. 491 (McDermott/Wellstone) H.R. 30801s. 1533 (MicheVLott) H.R. 322218. 1579 (CooperIBreaux) 1I.R. 36981s. 1743 (Stearns/Nickles) 11.R. 37041s. 1770 (W. ~ h o m a s l c h a f e e ) H . R 39181s. 1807 (SantorudCramm) Medicare in t h e coming calendar year. The Secretary would be required to pay persons enrolled in private plans one-half of the amount by which per capita expenditures exceed the plan's premium; the Secretary would be required to pay the full amount of the difference to persons who have private long-term care insurance. Persons becoming eligible for Medicare after September 30, 1994, would have 1 year to elect to enroll in a private plan. 1I.R. 360015. 1757 (Administration plan) H.R. 120015. 491 (McDermott/WelIatone) H.R. 308015. 1533 (MichellLott) H.R. 322215. 1579 (Cooper/Breaux) 1i.R. 36981s. 1 743 (Stearns/Nickles) 1I.R 370415. 1770 (W. ThomasIChafee) H.R. 391815. 1807 (Santorum/Gramm) B. New Medicare Benefits B. New Medicare Benefits B. New Medicare Benefits B. New Medlcare Benefita B. New Medicare Benefits B. New Medlcare Deneflta B. New Medicare Benefi ta Medicare would be amended to expand coverage of services provided by advance practice nurses in certain settings. Medicare would be eliminated and beneficiaries would become entitled to the comprehensive benefits specified above. No provision. Medicare Part B benefits would be expanded to cover colorectal screening, tetanusdiphtheria immunizations, wellchild care services for eligible persons under 7, and annual screening mammography. Medicare's Part B premium would be increased by $1.40 to finance these new benefits. No provision. No provision. No provision. Medicare P a r t B benefits would be expanded to cover outpatient prescription drugs beginning in 1996. The benefit would be subject to a $250 deductible and 20 percent coinsurance, up to an out-of-pocket limit of $1,000 per year; lowincome beneficiaries would receive assistance with cost-sharing. The deductible and out-ofpocket limit would be indexed to ensure that the same proportion of beneficiaries received t.he benefit each year. Mrdicare would receive rebates from matlufacturers (except for generic drugs) equal t.o the greater of ( a ) the tlifTerence between nvcbrage retail and wholesale prices or (1)) 1I.R. 36001s. 1757 (Administration plan) H.R. 12001s. 491 (McDermott/Wellstone) 11-R. 30801s. 1533 (Michewtt) 1I.R. 32221s. 1579 (Cooper/Breaux) 11.11. 36981s. 1743 (Stearns/Nickles) 1I.R. 37041s. 1770 (W. ~ h o m a s l c h a f e e ) H.R. 39181s. 1807 (Santorum/Cramm) 17 percent of average retail prices. The Secretary could nrgotiate rebates for new drugs considered to be overpriced, or could exclude them from coverage. The new prescription drug I~enefitwould be financed by a n increase in the P a r t B premium to cover 25 percent of its costs, with the remainder financed by general revenues. C. Reductions In Medicare Spending C. Reductions in Medicare Spending C. Reductlone in Medicare Spending C. Reductione in Medicare Spending C. Reductione in Medicare Spending C. Reductlorn In Medicare Spendlng C. Reductions in Medicare Spending The bill would reduce Medicare payments to providers; establish new coinsurance requirements for home health and laboratory services; increase P a r t B premiums for individuals with incon~es greater than $90,000 and couples with inconles greater than $115,000; continue the policy of requiring Medicare to he secondary pnyer to private hrnlth it~surancc;and require Medicare would be eliminated. The Medicare Part B premium would be increased for individuals with incomes greater than $100,000 and couples with incomes greater than $125,000. The bill includes specific proposals to reduce Medicare payments to providers and to increase Part B premiums for individuals with incomes greater than $75,000 and couples with incomes greater than $100,000. The bill would reduce Medicare payments to providers and would establish new coinsurance requirements Tor home health, skilled nursing facility, and laboratory services. The bill includes specific proposals to reduce Medicare payments to providers; to establish new coinsurance requirements for home health and laboratory services; to increase Part B premiums for individuals with incomes greater than $90,000 and couples with incomes greater than $115,000; and to continue the policy of requiring Medicare to be secondary payer to No provision. 1I.R. 3fiOO/S. 1757 (Administration plan) all State and local employees (some of whom are now exempt) to pay the Medicare hospital insurance payroll tax. 1I.R. 1200/S. 491 (McDermott~Wellstone) 11.R. 30801s. 1533 (MicheVLott) H.R. 322215. 1579 (CooperlBreaux) I1.R. 36981s. 1743 (StearnsINickles) 11.R. 37041s. 1770 (W. ThomasIChafee) private health insurance. H.R. 39181s. 1807 (Santorum/Cramm) I1.R. 36001s. 1757 (Administration plan) 1I.R. 1200/S. 491 (McDennott/Wellstone) 1I.R. 3080lS. 1533 (MichellLott) H.R. 322215. 1579 (Cooper/Breaux) XVI. MEDICAID XVI. MEDICAID XVI. MEDICAID XVI. MEDICAID XVI. MEDICAID XVI. MEDICAID XVI. MEDICAID Medicaid would continue for persons over 65 and persons receiving cash benefits under either AFDC or SSI program. On behalf or AFDC and nonelderly SSI beneficiaries, Medicaid payments would be made to regional alliances by the Federal and State governments. These payments would be set at 95 percent of the State's previous per capita spending for providing the coniprehensive benefits to AFDC and SSI beneficiaries, updated for inflation. AFDC and SSI beneficiaries would remain Medicaideligible for items and services not covered under the conlprehensive benelit package. Current Medicaid beneficiaries would be integrated into the single-payer plan effective January 1, 1995. Under an optional State Health Allowance Program (HAP), State payments for premiums to group health plans could be included under Medicaid if a t least 1 plan was paid on a capitation basis. Federal payment would be restricted to payment for acute care services. A State opting to establish a program would have to cover all individuals with household incomes up to 100 percent of the Federal Poverty Level (FPL) or a lower percentage if necessary to ensure that total expenditures did not exceed what would have been spentwithoutthe expansion. States would be permitted to subsidize group health plan preniiunis for individuals with household incomes up to 200 percent FPL, requiring the individuals to contribute on a sliding scale basis. Medicaid would be repealed effective January 1, 1995. Under a new Federal program, premiums for acute health care would be paid for individuals in households with incomes up to 100 percent of the poverty level and sliding scale subsidies would help individuals with incomes up to 200 percent of poverty. Cost sharing for low-income individuals would be nominal. Federal per capita Medicaid payments for acute care would be capped in FY 1995 a t 20 percent above Federal FY 1993 payments for similar services. Actual Federal payments to a State would be the lesser of adjusted per capita amounts spent for adults and children updated in future years by CPI plus 1 percent, or adjusted total Federal payments updated by CPI plus 2.5 percent. States would be required to maintain their Medicaid per capita spending for acute care, updated for inflation. States could apply for 5-year renewable waivers of any Medicaid requirements in order to establish innovative and cost effecti~~e programs for acute care services. States would have the option of providing coverage to Medicaid beneficiaries through qualified health plans instead of through the State's Medicaid program. For a Medicaidsligible individual enrolled in a qualified health plan, the State would pay the premium and costsharing charges, subject to the premium limit for nonmedicaid premium subsidies. Of a State's estimated Medicaid population receiving benefits under AFDC or SSI, 15 percent could enroll in health plans in each of the first 3 years, and 10 percent more in each succeeding year. Enrollnient limits could be waived by the Secretary. Growth in per capita Federal Medicaid paynients to the States for acute and long-term care services would be limited to the percentage change in the medical care coniponent of CPI. Beginning in FY 1995, Federal Medicaid payments to the States would be equal to per capita amounts spent for acute and long-term care services in FY 1993, updated for medical care inflation, multiplied by the total number of eligible persons receiving services. States would have to continue to extend eligibility to all categories of persons eligible for Medicaid in FY 1993. States could apply for 5-year renewable waivers of any Medicaid requirements in order to establish innovative and costsffective programs for providing services. Reneficiaries could chmse any plan whose preniium was a t or I)clow the weighted average p r e n i i ~ n ~ ( W A P ) . For those in low cost-sharing plans, States would gradually assume responsibility for Medicaid long-term care services, redirecting current Medicaid acute care spending to nursing facility services, intermediate care facility services for the mentally retarded, home health care services, and home and communitybased services. Between 1995 and 1998, Federal assistance would be available to States that nieet the bill's Federal per capita paynients for acute care Medicaid services would be subject to a cap based on FY 1994 Medicaid expenditures excluding DSH payments for the (Admlnistratlon plan) copayments would be reduced to 10 percent of amounts otherwise applicable. Other current Medicaid beneficiaries would enroll in health alliances, either through employers or a s individuals, and would be eligible for inconiebased premium subsidies, but not for cost-sharing reductions. Each State would make payments to t h e alliances equal to the State's previous costs for furnishing benefits to nonwelfare Medicaid beneficiaries, updated for inflation. Medicaid coverage for Iwneficiaries over age 65 would not be n~odified; Medicaid would continue to serve a s a supplement to Medicare for low-income seniors. (See XVlI for long-term care.) The I,iII would establish a new Stntendnlinistered frdernlly funded progrnnl u ~ l d e r H.R. 12001S. 491 (McDermott/Wellstone) H.R. 30801s. 1533 H.R. 32221s. 1579 (MlcheVLott) (CooperlBreaux) States would have more flexibility to enroll Medicaid beneficiaries into managed care arrangements. maintenance of efirt requirements. J1.R. 36981s. 1743 (StearnslNickles) J1.R. 37041s. 1770 (W. ThomasIChafee) services. The cap ~ o u l d be increased annually by 6 percent for each of fiscal years 1997-2000 and by 5 percent for FY 2001 and thereafter. The Medicaid requirement for payment adjustments to disproportionate share (DSH) hospitals would be repealed as would that portion of the socalled Boren amendment that pertains to hospital payments. The option of making DSH payments would be phased out over fiscal years 1996-2000. States would be given more flexibility to contract for coordinated care services under Medicaid. H.R. 39181s. 1807 (Santorum/Gramm) I1.R. 36001s. 1757 (Admlnlstratlon plan) which low-income children could receive benefits comparable to those currently available under Medicaid's Early and Periodic Screening, Diapliostic, and Treatment program. Income eligibility standards would be those currently used under Medicaid for nonAFDC children. Funding would be subject to limits based on past spending for the covered services. The bill would establish a Medicaid Commission, with State and Federal representation, which would report within one year after enactment on options for converting remaining Federal Medicaid funding into a block grant, integrating long-term care services with the m u t e care furnished by health pln~is,or consolidating the institutional and home-based coniponents of long-tern1 care. H.R. 1200lS. 491 ( McDermottlWellstone) I1.R. 3080lS. 1533 (Mlcheatt) H.R. 32221s. 1579 (CooperlBreaux) I1.R. 36981s. 1743 (StearnslNickles) 11.11. 37041s. 1770 (W. ThomaslChafee) H.R. 39181s. 1807 (Santorum/Gramm) 1I.R. 36001s. 1757 (Administration plan) 1I.R. 12001s. 491 (McDermott/Welbtone) XVII. LONG-TERM CARE M I . LONG-TERM M I . LONG-TERM CARE XVII. LONG-TERM CARE CARE XVII. LONG-TERM XWI. LONG-TERM XVII. LONG-TERM CARE CARE CARE A. New Federal Program A. N e w Federal Program A. New Federal Program A. New Federal Program A. New Federai Program A. New Federal Program A. New Federal Program The bill would establish a new capped grant program to the States to cover home and community-based care for severely disabled persons of all ages and income levels. Four categories of disabled persons would be eligible for services, provided they require assistance for a t least 100 days: individuals requiring help with three o r more activities of daily living tN)Ls), individuals with severe cognitive or mental impairment, individuals with severe or profound mental retardation, and severely disabled children under t h e age of 6 Federal grants to the States would be based on the State's shnre of disabled persons, its low-income population, wage levels, nntl required S t a t e tnntching rates. State Long-term and chronic care services, including nursing facility, home health, and home and comniunity-based care would be included anlong the comprehensive benefits covered by the national program. Persons with two or more ADLs would be eligible for home and communitybased care; children under 18 would also be eligible according to a n alternative standard of disability developed by the Board. Payments for home and community-based care for a n eligible individual could not exceed 65 percent of t.he average cost of nursing honie care. Persons 65 years of age and older would be required t o pay a monthly longtermhealth care prenlium of $65, if their incomes exceeded No provision. No provision. No provision. No provision. No provision. 11.R. 36001s. 1757 (Administration plan) H.R. 120015. 491 (McDermott/Wellstone) I1.R. 30801s. 1533 (MichellLott) H.R. 32221s. 1579 (CooperlBreaux) I1.R. 36981s. 1743 (StearnslNickies) I1.R 37041s. 1770 (W. ThomaslChafee) H.R. 39181s. 1807 (Santorum/Gramm) matching rates would range from 5 to 22 percent of total spending under t h e prograni, with higher shares paid by States with above-average income. Persons would be required to pay coinsurance on a n income-based sliding scale. Federal funding would be phased in over a 7-year period, beginning with $4.5 billion in FY 1996 and reaching $38.3 billion in FY 2003. certain levels. H.R. 1200: Long-term care services could be subject to cost sharing. D. Medicaid and Long-Term Care B. Medicaid and Long-Term Care B. Medicaid and Long-Term Care B. Medicaid and Long-Term Care B. Medicaid and Long-Term Care B. Medicaid and Long-Term Care B. Medicaid and Long-Term Care NI States would be required to allow nursing home residents to qualify for Medicaid through a spend-down program. States wol~ld Iw given the option of allowing single individuals in nursing ho~nrnto retain up to $12,000 in assets when applying for Medicaid coverage of their care. The n~iliiliiun~ personal nrrds allowance for pc>rsonsin nursing No provision (Medicaid would be repealed). State Medicaid plans would be required to allow persons purchasing qualified long-term care insurance policies to disregard, for purposes of Medicaid eligibility, a certain amount of assets that can be attributed to private long-term care insurance benefits. Federal payments to the States for Medicaid covered long-term care services would be phased out over a 4-year period. No provision. No provision. Beginning in FY 1995, growth in per capita Federal payments to the States for long-term care services would be limited to the percentage change in the medical care conlponent of CPI. 11.R. 36001s. 1757 (Administration plan) H.R. 120015. 491 (McDermott/Wellstone) 1I.R. 308015. 1533 (MichelJLott) 1I.R. 322215. 1579 (Cooper/Breaux) 11.11. 36981s. 1743 (StearnalNIckles) 1I.R. 370415. 1770 (W. ThomasIChafee) H.R 391815. 1807 (Santorum/Cramm) homes would be increased from $30 to $50 per month. C. P r i v a t e LongTerm C a r e l n s u r a n c e C. P r i v a t e LongTerm Care Insurance C. P r i v a t e LongTerm Care lnsurance C. P r i v a t e LongT e r m C a r e Insurance C. Private LongTerm C a r e lnsurance C. P r i v a t e LongTerm Care Insurance C. P r i v a t e LongT e r m C a r e Insurance I. T a x C o d e Clarifications 1. T a x C o d e Clarifications 1. T a x Code Clarifications 1. T a x Code Clarifications 1. T a x Code Clarifications 1. T a x C o d e Clarifications 1. T a x C o d e Clarifications The tnx code would be amended to make the costs of qualified longterm care services deductible to the same extent t h a t medical care expenses are currently deductible; these costs would be deductible for persons with two or Illore ADLs or severe cognitive impairment. Qualified long-term care insurance premiums nnd benefit payments under these policies would be eligible for the same tax preferences as hcalth insurance and health insurance I)e~lefits.Qualified policies would have to nleet a number of requirements, including having benefits of not tllore than $150 per day (ntljusted for inflatioll ill Tilt ure years). Policies No provision. The tax code would be amended to make the costs of qualified longterm care services deductible to the same extent that medical care expenses are currently deductible; these costa would also be deductible for expenses incurred for dependent parents and grandparenta. Long-term care insurance pemiurns (up to certain amounts for specified age groups) and benefit payments under these policies would be eligible for the same tax preferences as health insurance and health insurance benefits. Policies would have to meet a number of requirements, including covering persons having two or Illore ADLs or cognitive No provision. The bill would allow accelerated death benefits received under a life insurance contract to be excluded from taxable income for those persons who are terminally ill or who are chronically ill and confined to certain facilities. Withdrawals from individual retirement plans and 401(k) plans would be excluded from income if used for long-term care insurance premiums, and exchanges of life insurance contracts for long-term care insurance contracts would not be taxable. The tax code would be anlended to make the costs of qualified longterm care services deductible to the same extent that medical care expenses are currently deductible; these costs would be deductible for persons living in nursing homes having three or more ADLs or living a t home and having two or more ADLs. Qualified long-term care insurance premiums and benefit payments under these policies would be eligible for the same tax preferences as health insurance and health insurance benefits. Qualified policies would have to meet a number of requirements, including having benefits of not more than $100 per day No provision. 1l.R. 36001s. 1757 (Admlnlstration plan) 1I.R. 1200IS. 491 (McDermott/Wellstone) 1I.R. 30801s. 1533 (MicheVLott) H.R. 32221s. 1579 (CooperIBreaux) I1.R. 36981s. 1743 (Stearns/Nlckles) impairment for a t least 90 days and having benefits of not more than $200 per day (adjusted for inflation in future years). The bill would allow accelerated death benefita received under a life insurance contract to be excluded from taxable income for those persons who are terminally ill or who are chronically ill and confined to certain facilities. Withdrawals from individual retirement plans and 401(k)plans would be excluded from income if used for long-term care insurance premiums, and exchanges of life insurance contracts for long-term care insurance contracts would not be taxable. would have to meet certain consumer protection standards in order to be eligible for tax preferences. The bill would allow accelerated death benefits received under a life insurance contract to be excluded from t.wable income for those persons who a r e terminally ill. 1f.R. 37041s. 1770 (W. ~homns1Chafee) 1I.R. 39 181s. 1807 (SantorumlGramm) (adjusted for inflation in future years). Policies would also have to meet c ~ r t a i nconsumer protection standards. The bill would allow accelerated death benefits received under a life insurance contract to be excluded from taxable income for those persons who are terminally ill. 2. Long-Term Care I~lsuranceStandards 2. Long-Term Care Insurance Standards 2. Long-Term Care lnsurance Standards 2. Long-Term Care Insurance Standards 2. Long-Term Care lnsurance Standards 2. Long-Term Care lnsurance Standards 2. Long-Term Care Insurance Standards The Secretary of HHS would be required to promulgate r ~ g u l a t i o n s tliat establish Federal consumer protection standards for long-term care insurance policies. No provision. No provision. No provision. No provision. In order to be eligible for tax preferences, long-term care policies would have to meet certain standards specified in the National Association of Insurance No provision. 1I.R. 3600/S. 1757 (Administration plan) H.R. 1200lS. 491 (McDermottlWeilstone) I1.R. 30801s. 1533 H.R. 32221s. 1579 (Michewtt) (Cooper/Breaux) 11.R. 36981s. 1743 (Stearnsmic kles) The bill specifies certain minimum standards that the regulations would be required to address. Grants would be available to States for operating programs to monitor compliance of insurers with these standards. In order to be eligible for grants, States would have to review and certify all policies sold in the State, establish procedures for reporting and collecting data, and prohibit the sale of any plicy t h a t fails to conlply with standards. I1.R. 370419. 1770 (W. ~ h o m a s 1 C h a f e e ) H.R. 39181s. 1807 (Santorum/Gramm) ~ommissioners'(NAIC) Model Act and Regulations as well as other requirements. In addition, insurers would face tax penalties if policies did not meet certain other NAIC standards and requirements. D. O t h e r Provisions D. O t h e r Provisions D. O t h e r Provialone D. O t h e r Provislone D. O t h e r Provlsione D. O t h e r Provisions D. O t h e r Provisions Tax credits for the working disabled would be established to pay 50 percent of personal rare expenses paid or incurred, up to a nlaxin~umof $15.000. The nlaxinlum annual tax credit would be the lesser of 50 percent of the nlaxinlum allowed expenses ($7.500) or of the tnxpayer's earned income. No provision. No provision. No provision. No provision. No provision. For Medicare beneficiaries electing to be covered under a private insurance or managed care plan instead of Medicare, the Secretary would be required to pay the full amount of the difference (if any) between their plan's premium and per capita Medicare expenditures, if these persons also had private long-term care 1I.R. 36001s. 1757 (Administration plan) The Secretary would be required to conduct a demonstration to test the elTectivenesv of various approaches to financing and providing integrated acute and long-tern~care services. 1I.R. 12001s. 491 (McDetmott/Wellstone) 1I.R. 30801s. 1533 (Michel/Lott) H.R. 32221s. 1579 (Cooper/Breaux) 1I.R. 36981s. 1743 (StearnsINickles) 1I.R. 37041s. 1770 (W.~ h o m a s l c h a f e e ) R.R. 39181s. 1807 (SantorundCramm) insurance (see "Medicare" above). In addition, balances in a medical savings account in excess of the deductible under a catastrophic health insurance plan could be spent for long-term care, and such expenses would not. be included in gross income of the individual for tax purposes. 1I.R. 36001s. 1757 (Administration plan) H.R. 1200lS. 491 (McDermott/Wellstone) H.R. 3080lS. 1533 (MicheULott) H.R. 32221s. 1579 (CooperlBreaux) 1I.R. 36981s. 1713 (StearnsINickles) XVIII. OTHER FEL)ERAI, PROGRAMS XVIII. OTHER FEDERAL PROGRAMS XVIII. OTHER FEDERAL PROG RAMS XVIII. OTHER FEDERAL PROGRAMS XVIII. OTIJER FEIJEJML PROGRAMS XVIII. OTIIER FEDEML PROGRAMS XVIII. OTIIER FEDERAL PROGRAMS A. Military IIealth A. Milltary Health Care A. Mllltary Health Care A. Mllitary Health Care A. Military Health Care A. M i i i t a ~ yHealth Care A. Military Ifealth Care Civilian Health and Medical Program of the United States (CHAMPUS) would be eliminated after December 31, 1994. No provision. No provision. No provision. No provision. No provision. Care In addition to existing health care services provided by the military, the Secretary of Defense would be allowed to estal)lish one or more Uniformed Services Ilealth Plans to provide health care services to active duty members of the uniformed services. Plans would be required to oKer a t least t h e items and services in the conlprehensive benefit package and other health care services t h a t the person would be entitled to in the absence of t h e Ilealth Security Act, and confornl, to t h e cxtent practical~le,with the requirenlents for other health plans. - Jf .R. 37041s. 1770 (W. ThomasIChafee) 1i.R. 3918lS. 1807 (Santorurn/Gramm) 1I.R. 36001s. 1757 (Administration plan) 1I.R. 120019. 491 (McDermott/Wellstone) 1I.R. 3080lS. 1533 (MicheYLott) H.R. 32221s. 1579 (Cooper/Breaux) H.R. 36981s. 1743 (StearnsINickles) 1I.R. 37041s. 1770 (W.~ h o m a s l c h a f e e ) H.R. 39181s. 1807 (Santorum/Gramm) D. D e p a r t m e n t of Veterans Affairs B. D e p a r t m e n t of Veterans Affairs B. Department of V e t e r a m Affairs B. Department of V e t e r a m Affairs R. Department of Veterans Affairs B. D e p a r t m e n t o f Veteram Affairs B. Department of V e t e r a m Affairs In addition to t h e existing health care services provided by the V~teransAffairs (VA), the Secretary of VA would be required to organize health plans and operate VA facilities as or within health plans under the Health Security Act. T h e VA health plans would be required, to the maximum extent possible, to conform to the requirements for other health plans under t h e Act, and would be required t.o provide the items and services in t h e conlprehensive benefit package. In addition, the Secretary would be required to provide veterans with any additional care a n d services they a r e eligible to receive under t h e VA Mcdical Systenl that, were not included in the comprehensive benefit package. Veterans would continue to be eligible to receive medical benefits and services provided by Veterans Affairs. No provision. No provision. No provision. No provision. No provision. 1i.R. 36001s. 1757 (Administration plan) H.R. 1200lS. 491 (McDermott/Wellstone) I1.R. 30801s. 1533 (Mlchel/Lott) H.R. 32221s. 1579 (CooperlBreaux) I1.R. 36981s. 1743 (StearnslNlckles) C. Federal Employees Health Benefits Program C. Federal Employees Health Benefits Program C. Federal Employees Health Benefits Program C. Federal Employees Iiealth Benefits Program C. Federal Employees Health Benefits Program C. Federal Employees Health Benefits Program FEHBP would be eliminated after December 31, 1994. No provision. Open AHPs would be required to enter into an agreement with OPM to offer a health plan to Federal employees and annuitants, and family members under FEHBP, under the same terms and mnditiona (other than amounts of premiums) offered by the AHP to eligible individuals through IIPPCs. Each health plan offered under FEHBP would be required to meet the standards applicable to large eniployer plans, in the same manner and as of the same date that such standards first apply to large employer plans. FEHBP plans would be required to meet the standards applicable to large employer plans, in the same manner and as of the same date as such standards applied to large employer plans. No provision. 1i.R 37041s. 1770 (W. ~ h o m a e l c h a f e e ) I1.R. 39181s. 1807 (SantorudCramm) Veterans with serviceconnected disabilities, low-income veterans, and other special categories of veterans who are enrolled in a VA plan would not be required to pay any kind of cost-share charge (premium, copaynient, dedr~ctible, coinsurance charge, or other charge). C. Federal Employees IIeaith Benefits Program The Federal Employees Health Benefits Program (FEHBP) would be repealed as of Deceniber 31, 1997. FEHBP enrollees, active eniployees and annuitants, would be required to enroll in a health plan offered by the regional alliance ill the area where they rrside. The Federal Covernnient would be required to ofler Federal ~mployeesand future nnnuitalits eligibility to enroll ill one or n1or.e Beginning on January 1, 1995, enrollment in a FEHBP plan would not IE permitted unless the plan was an AIIP, and 1I.R. 360015. 1757 (Administration plan) 1I.R. 1200lS. 491 (McDermott/Wellstone) 1I.R. 30801s. 1533 (Michel/lmtt) FEIIBP supplemental plans developed by the Ofice of Personnel Management (OPM). Current annuitants would be eligible to enroll in a FEHBP supplemental plan and would be eligible for the Covernment contribution amount toward the premium for such a plan. These supplemental plans would reflect any additional benefits last generally afforded under FEHBP t h a t were not part of the con~prehensivebenefit package. H.R. 322215. 1579 (CooperlBwaux) 1I.R. 36981s. 1743 (Stearm/Nickles) (W. ThomasIChafee) 1I.R. 391815- 1807 (SantorumlGramm) 1I.R. 37041s. 1770 the amount of the Federal Government contribution under FEHBP were: 1) for any premium class, the same for all AHPs in a HPPC area; 2) for any individual in a premium class, did not exceed the base individual premium (defined by the bill); and, 3) in the aggregate for any fiscal year, total Covernment contributions under FEHBP equaled the aggregate amount that would have been made if this provision were not in effect. D. Indian Health Service D. Indian IIeaith Service D. Indian Health Service D. Indian Health Service D. Indian Ifealth Service D. Indian Ifealth Service D. Indian Ilealth Service In addition to existing health care services provided by t h e Indian Ilealth Service (IHS), Indinns. or a descendent of a member of a n Indian tribe, nn urban Indian, or a n other categories of Indians would be eligible to enroll in a health plan offered by t.he i l l s . IHS enrollees would not Indians would continue to be eligible to receive medical benefits and services provided by or through the IHS. No provision. No provision. No provision. No provision. No provision. 1I.R. 3600lS. 1757 (Administration plan) subject to any charge for health insurance premiums, deductibles, copayments, coinsurance, o r any other cost for health services provided by the 111s program. An IHS health program could also open enrollnlent to family nlenlbers of eligible Indian enrollees. Fanlily members who enrolled in a n IHS program would be subject to all charges for health care services. All Indians would reninin eligible for any additional benefits provided by t h e IHS that were not included in the comprehensive h n e f i t package. The lIIS would not make pnynlents for premiutlls charged for enrollment in an applicable health plan or any other cost of health services for eligil)le Indians who do not enroll in a n IHS program, but instead ellroll in a n applicable health plan. 1I.R. 1200/S. 491 (McDermott/Wellstone) H.R. 30801s. 1533 H.R. 32221s. 1579 (Michehtt) (Cooper/Breaux) 1l.R. 36981s. 1743 (Stearm/Nickles) H . R 37041s. 1770 (W. ~ h o r n a s l c h a f e e ) 1i.R. 39181s. 1807 (SantorumlCramm) 11.R. 360019. 1757 (Admlnlstratlon plan) The Secretary would be required to ensure that the comprehensive benefit package would be provided by all IHS health programs by January 1, 1999. All 1115 health programs would have to meet those Federal certification requirenlents for health plans determined by the Secretary to apply. IHS health services would be integrated with the alliance system to serve eligible populations. H.R. 1200/s. 491 (McDermott~Wellstone) H.R. 30801s. 1533 (MlcheVLott) H.R. 32221s. 157s (CooperIBreaux) 11.R. 36981s. 1743 (StearnsINlckles) 1i.R. 370415. 1770 ThomasIChafee) ( W. H . R 39181s. 1807 (Santorurn/Gramm) 1I.R. 36001s. 1757 (Administration plan) XIX. UNDERSERVED A RFAS/ POPUIATIONS Additional appropriations of $100 million per year would be authorized for community and migrant health centers for each of the fiscal years 1995 through 2000. During the same 5-year period, $2.7 billion would be authorized to be appropriated for the development of coniniunity health plans and networks t h a t provide services in health professional shortage areas or to members of niedically underserved populations. Grantees would be required to eliniinate nonfinancial barriers to service and provide "enabling services" such as trailsportation, outreach, and patient etlucation. Additional lictitls would be authorized for t h e provisioli of e i ~ a l ~ l i n g services by public and H.R. 1200lS. 491 (McDermottlWellstone) H.R. 3080lS. 1533 (MicheVLott) 1I.R. 32221s. 1579 (CooperlBreaux) 1I.R. 369R/S. 174.1 (StearnsMickles) XIX XIX. XIX. UNDERSERVED AREAS/ POPUIATIONS UNDERSERVED ARMS/ POPULATIONS UNDERSERVED AREAS/ POPULATIONS XI X. UNDERSERVED ARFASI POPULATIONS Payment methodologies established by the Board would include incentives to promote the provision of services in medically underserved rural and innercity areas. Health centers (community or migrant health centers, or health centers for the homeless) that are receiving grants under the Public Health Service ( P H s ) Act would be authorized to receive additional grants to (1) promote the provision of off-site services; (2) improve birth outcomes; (3) establish new primary care clinics; and (4) recruit and train providers and cover the costs for unreimbursed services. Appropriations authorized for these grants would be $100 niillion in FY 1994 increased by $100 million per year to $500 niillion in FY 1998. Each fiscal year, 10 percent of appropriated aniounts would have to be used for ON-site services and 10 percent to improve birth outcomes. Up to 50 percent or the The basic capitation payment made to comprehensive health service organizations could be adjusted to account for a disproportionate number of medically underserved individuals served by t h e organization. A State health security program could set additional payments for community-based primary care facilities to cover the costs of serving persons who are not covered under the plan, but whose health care is essential to coniniunity health and coiltrol of coinniunicable disease. Also, additional - Subject to approval of the Commission (or Board under S. 15791, Governors would be able to designate rural and urban areas of their States as underserved areas. A HPPC could require a n AHP to include an underserved area in its service area and apply riskadjustment factorn to increase compensation to the AHP for eerving the area'e residents. The HPPC would increase payment to such AHPe by the amount of subsidy made available by the State. For each of fiscal years 1995-1999, $5 million would be authorized to award grants to support the development of networks in underserved urban and rural areas. For the developnient of MIPS in rural areas, $75 niillion would be authorized to No provision. 1I.R. 37041s. 1770 (W.ThomaqIChafee) 11.R. 39181s. 1807 (Santorum/Cramm) XIX XIX. UNDERSERVED ARFASI POPULATIONS UNDERSERVED AREAS1 POPULATIONS The bills would add 2 new sections to the PHS Act. New section 330A would provide for allotments to States for grants to communitybased primary health care entities that serve low-income or medically underserved persons. Funds would be allotted to States according to a statutory formula and b a d on a State's needy population and Federal funds to the State's health centers receiving grants under section 329, 330, or 340 (community or migrant health centers, or health centers for the honieless) of the PHS Act. No provision. New section 330B would provide funds for expanding federally qualified health centers atid similar entities to serve more niedically ~underserved. 1I.R. 36001S. 1757 (Admlnlstratian plan) H.R. 120015. 491 (McDermott/Wellstone) nonprofit entities: $200 niillion for FY 1996, $300 million for each of fiscal years 1997-1999, and $100 niillion for FY 2000. b a n s and loan guarantees for capital costs would be authorized for the developnlent of qualified conimunity health groups--health plans or practice networks that are consortia of public or private providers. payments could be made to cover costs for case management, transportation, and translation services. The bill would establish an entitlement under which $800 nlillion per year would be paid to hospitals serving vulnerable populations (similar to DS1-l hospitals under existing Medicare and Medicaid law). An eligible hospital would be identified by the State and have a low-income utilization rate of a t least 25 percent. Of the total payable in a year, 75 percent would have to IH? allocated to hospitals for low-income assistance, and 25 percent for ~ s s i s t a n c ein furnishi~lginpatient I1.R. 30801s. 1533 (MicheULott) 1I.R. 32221s. 1579 (Cooper/Breaux) appropriated amounts could be used for new grants to health centers under the P H s Act. be appropriated in each of fiscal years 1995- A new project under the P H s Act would provide 50 percent matching grants to increase access to primary health care. The grants would be available to for planning or coordinating service delivery in areas with u p to 500,000 people, a significant number of whom are low-income or have no insurance. No construction, renovation, or direct services could be provided under this project. 1999. For each of fiscal years 1995-1999, $100 million would be authorized to assist community health centers and migrant health centers in integrating with AHPs and providing the uniform set of benefits. For each of fiscal years 1995-1999 $50 million would be authorized for HHS payments to hospitals serving vulnerable populations. A hospital that applied for and accepted assistance would have to agree to serve all residents of the hospital's area and provide a significant volume to services to people unable to pay. According to standards developed by the Commission (or Board in 1579), 3 years after enactment, a State could identify an area as chronically underserved. In cooperation with each 1I.R. 36981s. 1743 1I.R. 37041s. 1770 (StearnsITVickles) (W. ~ h o m a s l c h a f e e ) Authorization for the 2 new sections would be $400 million for FY 1995, increasing by $400 niillion per year to $1.6 billion for fiscal years 1998 and 1999. The Secretary of HHS would be authorized to conduct demonstration projects under which any Medicare and Medicaid provisions could be waived for the operation of rural health networks that would eervice Medicare and Medicaid beneficiaries. Public and private entities that received waivers would be eligible to receive planning, development, and operations grants for the networks. 1I.R. 391 81s. 1807 (SantorumlCramm) 1I.R. 36001s. 1757 (Admlnlstration plan) services not covered under the bill. A clinic, hospital, or health professional that is federally funded, located in a health professional shortage area, or providing services to a nledically underserved population, could be certified by the Secretary of Health and Iluman Services a s a n essential contmunity pmvider. For 5 years from the time any health plan is ofFered by a regional alliance, each health plan in the area would be required to enter into provider participation ngreements with essential providers in the plan's area or pay for services f u r n i s h 4 by such providers a t ~ l ~ i n i ~ l lspecified um rates. 1I.R. 12001S. 491 (McDermott~Wellstone) 1I.R. 30801s. 1533 H.R. 32221s. 1579 1I.R. 36981s. 1743 (Mlchel/Lott) (Cooper/Breaux) (Stearns/Nickies) HPPC aerving any portion of the area, the State could submit a plan for addressing the problems. Such plan could limit the area HPPCs to a single AHP contract awarded on a competitive basis. 1I.R. 37041s. 1770 (W.T h ~ m ~ l C h a f e e ) 1I.R. 39181s. 1807 (Santorum/Cramm) 1I.R. 36001s. 1757 (Administration plan) 1I.R. 1200lS. 491 (McDermott~Wellstone) 1I.R. 30801s. 1533 (MlcheVLott) H.R. 32221s. 1579 (Cooper/Brea ux) 1I.R. 36981s. 1743 (Stearns/Nickles) 1I.R. 37041s. 1770 (W. T h o m a s I C h ~ f ~ ) H.R. 39181s. 1807 ( S a n t o r u f l ramm) XX. HEALTH PROFESSIONS EDUCATION AND TRAINING XX. HEALTH PROFESSIONS EDUCATION AND TWINING XX IIEALTII XX. IIFALTII XX. IIEXLTII XX HEALTH PROFESSIONS EIIUCATION AND TRnINING PROFESSIONS EDUCATION AND TWINING . PROFESSIONS EDUCATION AND TMINING PIlOFESSIONS EIIUCATION AND TMINING PROFESSIONS EDUCATION AND TRAINING A. G r a d u a t e Medlcal Education A. G r a d u a t e Medical Education A. G r a d u a t e Medical Education A. G r a d u a t e Medical Educatlon A. G r a d u a t e Medical Education A. G r a d u a t e Medlcal Education A. G r a d u a t e Medlcal Education Current financing of graduate medical education (GME) would be replaced with a national fund established through assessments on alliances and Medicare. State health security plans would be required to establish an account for funding health professional education in accordance with guidelines established by the Board. No provision. Current financing of GME would be replaced with a national fund established through assessments on AHPs and Medicare. No provision. No provision. The National Council on Graduate Medical Education would be established to authorize the number of residency positions in primary cnre and other medical subspecialtics, with the goal of reaching 55 percent of residencies in priniary care specialties by the academic year 1998-1999. Each year, tlie Council would be rrcluired to make allocations aniolig rligible residency training progtanis of the nn~iualnunibrr of slwcialty posit.ions tlvsignated for the ye;jr. The Board would be responsible for coordinating health professional education policies and goals, in consultation with the Secretary, to achieve the national goal of 50 percent of medical residents in residency education programs in primary care by not later than 5 years after enactment. The Secretary would be required to establish denionstration projects in no more than 7 States and in no more than 7 health care consortia (in other States). The demos would test and evaluate niechanisms to increase the number and percentage of medical students entering primary care practice relative to nonprimary care practice through the use of Medicare's funding for direct GME payments. The Secretary would be required to pay States or consortia an aniount equal to the niedical education payments participating hospitals would otherwise have received under Medicare. XX. IIEXLTII The Board would be required to develop a formula for reducing payments to State health security progtanis ( t h a t provide The Health Care Standards Commission (Board under S. 1579) would be required to approve residency positions in medical residency training programs and determine funding levels, allocate the entry (first-year) positions among programs, and determine the appropriate total number of entry residency positions allocated to the training programs. The Conimission (or Board) would establish the aniount of reinibursenient per resident, and would be H . R 1200lS. 491 (McDermott/Wellstone) The Council would be required to consider the historical distribution of approved physician training progranis and the underrepresentation of minority groups in nicdicina generally and in the various medical specialties. I'riniary health care would include the niedical specialties of family medicine, general internal niedicine, general pediatrics, and obstetrics and ~ynecology. Funding for CME progranis would be determined by Federal formulas. The Secretary would also be required to make payments to qualified academic health centers (hlics) or qualified teaching hospitals to assist these institutions with costs t h a t are not routinely incurred I)y other providers, but are the result of the acndeniic nature of such instit,ut.iotis. 'I'hese H.R. 30801s. 1533 (MlchaV~tt) B.R. 32221s. 1579 (CooperIBreaux) for payments to medical residency education programs) that failed to meet the primary care goals established by the Board. allowed to vary payments depending on whether a resident was in a primary care or some other medical specialty. Primary care residencies would include programs of family practice, general practice, general internal medicine, or general pediatrics. The Commission (or Board) would be required to fund a physician retraining program that would provide physician retraining in primary care for physicians who completed training in a nonprimary care residency. The Board would be required to establish a n Advisory Committee on Health Professions Education to advise the Board on health professions education. Funding for residency training would come from an assessment against gross premiums of AHPs of one percent and a Medicare payment equal to one percent of the prior year Medicare program expenditures. These funds would be entered into the National Medical Education Fund in the Treasury and be used to fund medical residency training and physician retraining progrnms beginning July 1, 1995. 1I.R. 369UlS. 1743 (StearnsMicklcs) 1J.R. 370415. 1770 (W.ThomasIChafee) Primary care would include the medical specialties of family medicine, general internal medicine, and general pediatrics, and could also include obstetrics and gynecology if the care was personcentered, comprehensive care that was not organ or problem specific. R.R. 39181s. 1807 (Santorum/Cramm) I1.R. 36001s. 1757 (Admlnistratlon plan) costs would include the costs resulting from the reduced productivity of the faculty due to teaching responsibilities, uncompensated costs of clinical research, and the exceptional costs associated with the treatment of health conditions t h a t teaching racilities would have specialized expertise including rare diseases, unusually severe conditions, and other specialized care. Qualified institutions would be required to submit a request for payment to t h e Secretary, and the Secretary would determine if t h e pnynlent was necessary. Funding for G M E and Al1C payments would be drawn from ( a ) a n assessnlent on regional allinnce health plans and on multi-employer corporate alliances equal to 1.5 percent of premiun~s;(b) transfers lroi~lthe Tre:rsury of a portion of 1 percent. pnyroll tax oil corporato H.R. 1200lS. 491 (McDermottlWellstone) 1I.R. 308015. 1533 (Mlchel/Lott) 1I.R. 32221s. 1579 (CooperlBreaux) 11.12. 36981s. 1713 (Stearn~Mickles) J1.R. 370415. 1770 (w. ThomaqIChafee) 1i.R. 39181s. 1807 (SantorumICramm) H.R. 36001s. 1757 (Administration pian) H.R. 12001s. 491 (McDermott/Wellstone) Z1.R. 30801s. 1533 Z1.R. 32221s. 1579 (Michebtt) (CooperlBreaux) I1.R. 36981s. 1743 (StearnslNickles) 1I.R. 370415. 1770 (W.ThomasIChafee) I1.R. 39181s. 1807 (SantorumJCramm) alliances; and (c) transfers from the Medicare trust funds. Direct Medicare payments for GME would be eliminated. IS. 11eaIth B. H e a l t h B. l l e a l t h B. H e a l t h I'rofessions Education a n d Training Professions Education a n d Training Professions Education a n d Training Professions Education a n d Training In addition to current appropriations authority, t h e National llealth Service Corps (NifSC) program authorizations of appropriations would be increased by $50 million for FY 1995;$100 million in FY 1996;$200 nlillion for each year from FY 1997-N2000. Of the amount appropriated for t h e NIISC, the Secretary of 11115 would be required to reserve such amounts ns necessary to ensure that the number of nurses being educated or serving in t h e NIfSC I)e increased to 20 percent of t h e total nuniber of individuals ~)nrticipati~ig in t h e NllSC scholarship and The Board would be responsible for reaching the national goal of assuring a n adequate supply of midlevel primary care practitioners (clinical nurse practitioners, certified nurse midwives, physician assistants, or other nonphysician practitioners as authorized to practice under State law) employed in the health care system by January 1, 2000. In order to meet t h e national goal for midlevel practitioners, the Board would be required to advise t h e P H s on funding allocations for progranis under titles VII and VIII of the P H s No provision. Authorizations of appropriations for the National Health Service Corp scholarship and loan repayment programs would be: $150 miliion for FY 1995;$175 million for FY 1996;$200 million for FY 1997;$225 million for FY 1998;and $250 million for FY 1999. Authority for appropriations for the Area Health Education Center Program would be increased to $30 million for each year from FY 1995-FY1999. Program authority would be extended for the following P H s Act grant programs through FY 1999: Public Health B. IIealth Prolessions Education a n d Training R. Ileaith Professions Education a n d Training No provision. Funding for the NHSC program would be specified a t $120 million for FY 1993-FY1994, and continue to be ror such sums as may be necessary for each year from F Y 1996-FY1998. One-third of total appropriated funds would be required to be made available to the Nt1SC Grants for State Loan Repayment Program. Program authority and appropriations authority would be extended and increased, respectively, for specified programs under titles VII and VIII of the P H s Act supporting primary care physicians, nurse practitioners and R. H e a l t h Professions FAucation a n d Training No provision. 1I.R. 360015. 1757 (Administration plan) H.R. 120015. 491 (McDermottlWelletone) loan repayment programs. Act and the NHSC, in order to increase the supply of health care providers. The National Council on Graduate Nurse Education would be required to authorize graduate nurse training programs (nurse practitioners, nurse midwives, nurse anesthetists, clinical nurse specialists), and positions, as well as allocate funding for institutional costs of graduate nurse training. Authorizes $400 million in appropriations for additional funding of programs authorized in titles VII and VIII of the PIIS Act. These funds would support t h e training of additional primary care physicians nnd physician assistants, including projects to enhance c o n ~ n ~ u n i t y based generalist training for nledical students, residents, and practici~lg physicians; retraining nlidcareer physicians previously certified in a ~lonprin~ary care medical specialty; to The Board would also be required to commission a study of the potential benefits and disadvantages of expanding the scope of practice authorized under State laws for midlevel practitioners. Funding for health professions education and training would be made by the Board from the Trust Fund to PHS, with 50 percent of funds allocated to the NHSC. 1I.R. 308015. 1533 H . R 322215. 1579 1l.R. 36981s. 1743 (Micherntt) (CooperlBreaux) (StearnslN Ickles) and Preventive Medicine; Family Medicine; General Internal Medicine and General Pediatrics; Physician Assistants, Allied Health Project Grants and Contracts; Allied Health Project Grants and Contracts, Nurse Practitioner and Nurse Midwife Programs. The Secretary would be required to obligate not less than 15 percent of annual appropriations for the Agency for Health Care Policy and Research to conduct and support research in primary care. I1.R. 37041s. 1770 (W. ~ h o m a s l C h a f e e ) physician assistants. A program for physician assistant scholarships would be created to award grants to individuals, with preference given to individuals who a r e residents of health professions shortage areas. The Secretary would also be required to award grants to States or nonprofit entities to fund not less than 10 demonstration projects to evaluate one or more of the following: State mechanisms, including changes in the scope of practice laws, to enhance the delivery of primary care by nurse practitioners or physician assistants; the feasibility of re-training subspecialist physicians to deliver primary care services; and State n~echanismsto increase the supply or improve the distribution of primary care providers. 1I.R 39181s. 1807 (Santorum/Cramm) 1I.R. 36001s. 1757 (Admlnlstratlon plan) expand the supply of physicians trained to serve in rural areas, conimunity settings, managed care, costellbctive practice management, continuous quality improvement, and for other purposes. These programs would also support projects to increase the number of underrepresented minority and disadvantaged persons in medicine and other health professions, and projects to support nlidlevel provider training and address nursing workforce needs. In addition, $200 million would be authorized to be appropriated for progranls carried out by the Secretary of Labor, including retraining and upgrading the skills of health care workers, arld other workforce adjustn~entprograms. tlointly, the secretaries of filiS and I,nl~or would I,e required to H.R. 1200/5. 491 (McDermott/Wellstone) H.R. 30801s. 1533 (MlcheVLott) H.R. 322215. 1579 (CooperlBreaux) 11.R. 369S/S. 1743 H . R 37041s. 1770 (StearnsMlckles) (W.ThomarrlChafee) 1I.R. 391815. 1807 (Santorum/Cramm) I1.R. 36001s. 1757 (Administration plan) establish an oflice, the National Institute for llealth Care Workforce Development, to make reconintendations on the supply of health care workers and on the impact of health reform on such workers and the need for education, training, and other career development needs. crspphgw H.R. 120015. 491 (McDermott/Wellstone) H.R. 3080/5. 1533 H.R. 322215. 1579 (MicheVLott) (Cooper/Breaux) 1I.R. 36981s. 1743 (StearmlNbklea) I1.R 37041s. 1770 (W. ThomaslChafee) H.R. 39181s. 1807 (Santorum/Cramm)