Sen. Edward Kennedy (D-MA), the chairman of the Health, Education, Labor and Pensions Committee, is circulating draft legislation designed to overhaul the nation’s health care system. This so-called “draft of a draft,” as one Kennedy spokesperson described the set of documents now available, is the first piece of concrete health reform legislation to emerge from Democrats in Congress.
The legislation, called the “American Health Choices Act,” would provide universal coverage to all Americans and establish a new public health care plan to compete alongside private insurers.
As previously reported, the new public plan would reimburse providers Medicare rates plus 10 percent. Under this arrangement, the new public option would not have to negotiate its own rates, but could piggy back off of Medicare’s considerable reach. Using Medicare plus 10 rates, rather than the prevailing market rates, would lower costs and allow the plan to charge lower premium rates.
Moreover, the bill aims to improve access to coverage by regulating insurers, expanding Medicaid and SCHIP, and building state-sponsored insurance gateways (or exchanges) to help Americans find affordable coverage. Individuals and employers would be required to purchase insurance, but families earning up to 500 percent of of federal poverty line (FPL) ($110,000 for a family of four) could “buy insurance on a sliding scale with government subsidies” and anyone earning up to 150 percent of the FPL ($33,000 for a family of four) would also be eligible for Medicaid; the bill also expands SCHIP to cover people up to age 26, from age 18. Currently, an adult with no dependent children could be penniless but still ineligible for Medicaid coverage in 43 states.
Sen. Chris Dodd (D-CT), who is leading the committee’s health care effort in Kennedy’s absence, “has said he hopes to begin debating a bill in committee on June 15.”
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