Cath Lab Digest

Reports Project
Effects of Senate, House Bills on Premiums

Debate over national healthcare reform has left Americans
concerned about how changes might impact the price of their insurance premiums,
and the inclusion of new subsidies in premium calculations has added to
confusion over the actual price to enroll in a health plan if reform proposals
are enacted. As leaders in the House and Senate work to reconcile differences
between their respective reform bills, proponents and critics of healthcare
legislation were citing reports by the Congressional Budget Office (CBO) and
the Centers for Medicare & Medicaid Services (CMS) to make their case for
whether health insurance premiums will rise or fall under proposed legislation.
On average, new insurance requirements are expected to add to both the cost of
health insurance and the value of benefits, and new federal subsidies are
expected to make plans more affordable for those with lower incomes.

A national survey conducted November 24 by Rasmussen Reports
found the cost of healthcare to be a top priority. Respondents were asked which
of the following is the biggest problem with healthcare: the lack of universal
coverage, the cost, the inconvenience of scheduling, or the quality of care. Of
the 1000 likely voters polled, 62% said cost was the biggest problem followed
by 18% who cited lack of universal coverage, 6% chose inconvenience of
scheduling, and 5% said quality of care is the biggest problem.

Analyses of the effects these bills will have on premiums
have focused largely on the current Senate bill, the Patient Protection and
Affordable Care Act (S.AMDT.2786 an amendment in the nature of a substitute to
HR 3590). There have also been attempts to estimate the financial impact of the
House bill, the Affordable Health Care Act (HR 3962), but these have focused
more on overall costs to the government than on health plan premiums. At press
time, reformers in the Senate were tweaking the design of one of their most
contentious proposals—the government-run health plan known as the public
option.

Senate Bill

At the request of Sen. Evan Bayh (R-IN), the CBO and the
Joint Committee on Taxation (JCT) analyzed how health insurance premiums might
be influenced by enactment of the Patient Protection and Affordable Care Act,
as proposed by Sen. Reid on November 18, 2009. In the report, released on
November 30, CBO and JCT estimated the effect of the legislation on premiums in
the nongroup, small-group, and large-group insurance markets, as well as the
contributions to the changes in premiums from each of those 3 sources of
change.

The report noted new requirements under which insurers would
operate if the bill were enacted. These requirements include individual and
employer mandates for minimum coverage, taxes on high-value plans, insurance
exchanges, and creation of a government-run health plan. After 2013, health
plans could not impose lifetime limits on the total amount of services covered,
coverage rescissions would be limited, certain preventive services would need
to be covered with no cost sharing, and unmarried dependents could remain under
their parents’ policies up to age 26. Those changes would also apply to new
coverage provided by large employers, including companies that self-insure.

In addition, by 2014 insurers would have to accept all
applicants during an annual open-enrollment period, and insurers could not
limit coverage for preexisting medical conditions. Moreover, premiums could not
vary to reflect differences in enrollees’ health or use of services and could
vary on the basis of an enrollee’s age only to a limited degree.