Public Option and Affordability Credits, House-style

The public option contained in the House Bill today is actually not as watered-down as many might think. It’s certainly better than what the Energy and Commerce Committee had in their version, but it’s also not as great as the Medicare +5 option might have been.

The Public Option

Here are the key points, with some nods to the townhall hysteria back in August:

• Offered alongside private insurers’ plans on the Exchange with a specific caveat that it is an option.
• Benefits will be the same benefit tiers required of private insurers
• Negotiated Rates to providers not to be lower than Medicare Rates, nor higher than the average rates paid by other insurers offering plans on the public exchange.
• Establishes a provider network
• Gives incentives for innovation that improves outcomes
• Incorporates privacy standards required under HIPAA
• Members of Congress may choose the public option
• Effective January 1, 2013

A bit of commentary here: Since prescription drugs are part of the basic benefits package, it seems to me that the negotiated rate provision is actually a good thing. There was much heat and fury a few months back about some ‘back-room deals’ happening that allowed Pharma to keep their Medicare Part D at retail rather than negotiated rates. It seems to me that negotiating rates and allowing insurers to negotiate rates for policies offered on the exchange means a better deal for all of us, given that prescription medications are taking a huge chunk out of everyone’s wallet right now.

Affordability Credits (Subsidies)

Also effective in 2013 as follows:

• Individual is enrolled in an Exchange-participating health benefits plan
• Modified gross income below 400% of Federal Poverty Level (FPL 2009-2010 Individual = $10,830; Family of 4 = $22,050)
• Not eligible for Medicaid or enrolled in any other acceptable coverage
• Credits will reduce copayments, out-of-pocket limits, and premium payments
• Undocumented aliens are excluded by specific definition

Tagged as: affordability credits, AHCAA, Health, health care reform, health insurance, House bill, insurance, Medicaid, Medicare Part D, Pelosi, Prescription drug, public option