President Releases Recommendations in Advance of Bipartisan Healthcare Reform Summit

To give the public a more clear picture of the recommendations on healthcare reform that the President will bring to this Thursday’s healthcare reform summit, moments ago the White House released a set of the President’s general policy recommendations. The recommendations build on many of the proposals already in the House and Senate bills, with many of his recommendations simply bridging the gap between the differences of the two.

The following is a summary of the President’s recommendations as compiled by SIIA’s Government Relation’s Staff:

Low-Income Tax Credits:

Tax credits for families with low-incomes that would cap the percentage of income paid for insurance premiums:

• $22,000 – $29,000: 2.0% – 3.0%
• $29,000 – $33,000: 3.0% – 4.0%
• $33,000 – $ 44,000: 4.0% – 6.3%
• $44,000 – $55,000: 6.3% – 8.1%
• $55,000 – $66,000: 8.1% – 9.5%
• $66,000 – $88,000: 9.5%

Health Insurance Rate Review:

• The President recommends that if a premium rate increase is “unreasonable” and/or “unjustified”, insurers would have to lower premiums, provide rebates or take other actions to make premiums “affordable”.
• Proposes the creation of a “Health Insurance Rate Authority” to provide oversight of rate reviews

Health Plan Coverage Requirements:

• The President recommends that all health plans would be required to comply with the proposed insurance market reforms; unlike the Senate bill that only would have imposed them on plans created after the law went into affect.
• The President recommends that the following once exempted proposed reforms, now apply to self-insured health plans:
• Coverage of adult dependents up to at 26
• Prohibition of rescissions
• Implement external appeals process
• Prohibition of all annual and lifetime limits
• Coverage of preventive services with no cost-sharing

Lowers Individual Mandate Penalties:

• The President recommends changes to the proposed penalties for individuals that do not obtain healthcare coverage:
• Specifically, the President recommends maintaining that penalties be the higher of a flat dollar amount or a percentage of income
• The President recommends the following threshold changes:
• 2015 – The higher of $325 (down from 495) or 1% of income (up from 0.5%)
• 2016 – The higher of $695 (down from $750) or 2% of income (up from 1%)
• Subsequent years – Indexed to $695 (down from $750) or 2.5% of income (up from 2%)

Employer Mandate:

• The President supports that employers be required to offered coverage, but recommends the following changes to the Senate’s bill:
• $40 billion in tax credits for small businesses (<50 employees) to help them cover their workers
• For large businesses (>50 employees) subtracting out 30 workers from any penalty calculation
• Large business who do offer coverage be penalized $2,000 (down from $3,000) for every full-time worker who receives tax credits in the exchange
• Maintains that large businesses who do not offer coverage be penalized $750 per full-time worker if they have at least one employee receiving tax credits in the exchange

Revenue Issues:

• Recommends the following changes to the Medicare Hospital Insurance tax for individual workers earning over $200,000 or families earning over $250,000:
• Increase the tax to 2.35% of salary
• Proposes a new 2.9% on income from interest, dividends, annuities, royalties and rents
• Recommends increasing the Senate’s proposed fees on pharmaceuticals

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This entry was posted by Adam V. Russo on Tuesday, February 23rd, 2010 at 8:58 am and is filed under Health Care Legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.