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Energy and Commerce Dems Said to Favor Exchange, Subsidies, Mandates

By John Reichard, CQ HealthBeat Editor

May 14, 2009 -- A summary circulating Thursday of health overhaul provisions said to be favored by House Energy and Commerce Committee Democrats calls for the creation of a "National Health Exchange" initially open to all individuals without employer-sponsored health insurance and small businesses. The overhaul concept outlined by the summary would require individuals to carry health insurance and give them "affordability credits" to pay for it if they didn't qualify for Medicaid and their incomes were below four times the federal poverty level.

An Energy and Commerce Committee aide said the summary "is not a committee document. It appears to be someone's impression of the framework. No paper was distributed to members or staff" at a health overhaul briefing of committee Democrats Wednesday, the aide said. Asked if the summary inaccurately summarized the committee's approach, the aide said, "We're not commenting on the document."

The Exchange would be an entity offering insurance options and administering the credits to reduce the costs of coverage on a sliding scale up to an income of $88,200 for a family of four.

"Everyone would be protected by an annual cap on out-of-pocket spending," the summary said. In addition to those without employer-sponsored coverage, the exchange would be open in the first year to businesses with fewer than 10 employees and in the second year to those with fewer than 20 employees. Eventually, it would be open to large businesses.

Individuals would have a choice of public and private plans and Medicaid would be improved. A new public plan "would be subject to the same market reforms and consumer protections as private plans." The public plan "would have geographic adjusters for prices." It initially would be run by the Department of Health and Human Services, and would be independent of the Health Exchange. It could not be subsidized by the government and "would build on Medicare providers and rates, similar to the practices of private plans today."

A public advisory committee would recommend benefit packages based generally on the Federal Employees Health Benefit Plan. Several levels of benefits would be available on the Exchange. After several years employers would have to meet the minimum benefits offered in the Exchange or allow their workers to buy coverage there.

Employers would have to either "play" by offering insurance to their employees and their dependents or "pay" by contributing a percentage of their payroll to fund coverage. The plan also calls for investments in the health care workforce, more training of residents in community settings, better preventive care in Medicare and Medicaid and increased "support" for community health centers, among other measures.

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