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Health Care Reform Round-Up: CBO Finds Some Insurance Savings, New Amendments Proposed

December 02, 2009
by Astrid Fiano, DOTmed News Writer
The Congressional Budget Office released an analysis undertaken with the staff of the Joint Committee on Taxation (JCT) on how the Patient Protection and Affordable Care Act, H.R. 3590, would affect premiums paid for health insurance in various markets.

The non-group (individual) market would have the most significant effect, growing in size under the legislation but still only 17 percent of the overall insurance market by 2016. Under legislative change, the cost for individual policies would be about 10 percent to 13 percent higher in 2016 than the same coverage in 2016 under current law. However, more than half of the enrollees in these policies would receive federal government subsidies (for those individuals and families with income between 133 percent and 400 percent of the federal poverty level (FPL)). When those subsidies are taken into account, the enrollees' cost for the subsidized policies would be around 56 percent to 59 percent lower than the same non-group premiums charged under current law.

The CBO and JCT also stated that a majority of persons who have health coverage from their employers will see little effect--either no increase or a reduction in premiums. For the small group market (defined by the analysis as employers with 50 or fewer employees), CBO and JCT estimate that the change under the legislation in the average premium per person would likely range from a one percent increase to a two percent reduction of premiums in 2016, compared to the same premium prices under current law. In the large group market (50+ employees), the premium cost would be likely zero to three percent lower in 2016 (compared to that under current law).

About 12 percent of those in the small group market would benefit from the small business tax credit on the cost of purchasing insurance under the legislation, with a lowered cost of between 8 percent to 11 percent compared with the same premium cost under current law.

Meanwhile, the debate on H.R. 3590 has begun in earnest on the Senate floor; Monday, Senators Barbara Mikulski (D-MD) and Olympia Snow (R-ME) offered the first bipartisan amendment to the bill. Senator Mikulski stated that the bill "could do more to be able to enhance and improve women's health care," and that her amendment would address that issue. The amendment guarantees women access to critical preventive services and screenings by eliminating, or minimizing, high co-pays and high deductibles that the Senator said "are often overwhelming hurdles for women to access screening programs."

Mikulski noted that the Centers for Disease Control lists types of cancer including breast cancer, cervical cancer, colorectal cancer, and ovarian cancer, as the most frequent fatal diseases for women. In addition, women have high risk of death from heart and vascular disease. Women face challenges from insurance companies, Mikulski stated-most prominently gender discrimination resulting in higher costs.

Mikulski further said that under the amendment, women will be able to obtain preventative care and screening, including mammograms, diabetes testing, and heart disease screening. Mikulski emphasized the benefits of mammograms in light of the recent controversy over mammography guidelines. "We don't mandate that you have a mammogram at age 40. What we say is discuss this with your doctor. But if your doctor says you need one, you are going to get one. My amendment also leaves the decision of which preventive services a patient will use between the doctor and the patient."

Senator John McCain (R-AZ), offered an amendment from the Republican site that would strip away cuts in the bill pertaining to Medicare. The amendment would include removal of Medicare Advantage cuts totaling -$118.1 billion; Medicare disproportionate share hospital payment changes totaling -20.6 billion; and cuts to advanced imaging services totaling -3.0 billion. McCain stated that the "...cuts that are envisioned by this bill...would directly impact the health care of citizens in this country...All of these are cuts in the obligations we have assumed and that are the rightful benefits people have earned--particularly our senior citizens--across this Nation."

On Tuesday, Senator Patrick Leahy (D-VT) filed the Health Insurance Industry Antitrust Enforcement Act of 2009 as an amendment to the bill. The legislation is the same as that which the senator previously introduced in September. The amendment would repeal the antitrust exemption for health insurance and medical malpractice insurance providers and, Senator Leahy said, "ensure that the basic rules of fair competition apply to the industry as part of the reforms that the larger health care bill will enact. Our Nation's antitrust laws exist to protect consumers, and it is vital that the health insurance and medical malpractice insurance companies are subject to these laws."

Leahy went on to say that the amendment is supported by the Consumer Federation of America, Health Care for American Now, and the American Hospital Association. Leahy also stated that he had received support from 10 State attorneys general who felt the legislation would not only enhance competition, but also give state and federal enforcers "additional tools to combat harmful anti-competitive conduct."

"This amendment will prohibit the most egregious anticompetitive conduct--price fixing, bid rigging and market allocations--conduct that harms consumers, raises health care costs, and for which there is no justification," Leahy concluded. "Subjecting health and medical malpractice insurance providers to the antitrust laws will enable customers to feel confident that the price they are being quoted is the product of a fair marketplace."

The CBO analysis: