House Health Bill

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"House Health Bill"

The House of Representatives is now prepared to unveil their health reform legislation with markup taking place tomorrow and Thursday. It’s a good bill (more on that later) but it’s worth also giving a tip of the cap in the direction of the House process. The chairs and members of the three relevant committees did a great mitzvah by putting egos aside, forming a unified “tri-committee” bill writing process, largely shutting up about their internal negotiations, and getting down to the job of writing a bill that fits the parameters Americans voted for in November. I appreciate that the Senate has its own idiotic self-imposed supermajority requirement to deal with, but it would be nice to see the same discipline and seriousness of purpose from Senators at the committee stage.

So what’s in the bill?

Well, there’s a fairly strong public plan. It needs to be financially self-supporting and nobody will be forced to accept its reimbursement rates, but it will be open to anyone with access to the Health Insurance Exchange will model its payments on Medicare and they say the default assumption will be that anyone who serves Medicare clients will also take Public Plan clients.

Speaking of which, there’s a Health Insurance Exchange which will be national in scope, though states will be able to opt-out if they can meet some state guidelines. That seems like a reasonable compromise to me. It’s basically designed for employees of very small businesses, but there’s the possibility of larger businesses entering the exchange via mutual agreement between the employer in question and the Commissioner governing the exchange. Clearly how that cashes out will have a lot to do with how the discretionary authority is used.

Minimum benefits are defined in a slightly circular way as equivalent to the prevailing employer-based coverage in the area.

About half the cost is paid for via entitlement savings—$500 billion over ten years will be saved from Medicare and Medicaid. The other half is paid for via a surtax on rich people. The bill prudently calls for the level of the tax to be adjusted depending on whether or not the bill actually costs what it’s projected to cost.

The CBO sees a net cost of $1 trillion to the non-revenue portions of the bill. The intention is to have the revenue portions cover the cost of the non-revenue portions, but we’ll have to wait and see for that part of the analysis to get done.

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