House Bills: Health Reform

EQUAL Health Network

Affordability Tables

Factors for Affordability, UC Berkeley Summary 3/21/10

laborcenter.berkeley.edu

Inputs to Calculator, Updated 3/22/10

Medicaid Eligibility
Reconciliation Act		133%	FPL

Estimated Premium, 70% plan, 2009
		Age of Youngest Adult in Family
		20	30	40	50	60
Individual	Reconciliation Act	$ 143	$ 215	$ 286	$ 358	$ 429
Family	Reconciliation Act	$ 388	$ 582	$ 776	$ 970	$1,164
Includes 3:1 age rating
40-year old premium based on CBO estimate (11/30/09) of second lowest-cost "Silver" plan
2016 premiums under Senate, deflated by 6.1% annually to estimate 2009 premiums

Maximum Premium Percentages
Reconciliation Act
FPL Lower Bound	Max Cost Lower	FPL Upper Bound	Max Cost Upper
0%	Medicaid	100%	Medicaid
101%	Medicaid	133%	Medicaid
133%	3.00%	150.00%	4.00%
150%	4.00%	200.00%	6.30%
200%	6.30%	250.00%	8.05%
250%	8.05%	300.00%	9.50%
300%	9.50%	350.00%	9.50%
350%	9.50%	400.00%	9.50%
400%	9.50%	1000.00%	9.50%
Under proposal, premium percentage cap is 2.0% between 101-133%, applicable to
permanent residents who are not eligible for Medicaid

Maximum Out of Pocket Amounts
Reconciliation Act
FPL Lower Bound	Actuarial value percent	Individual Max	Family Max
133%	94%	$ 1,933	$3,867
150%	87%	$ 1,933	$3,867
200%	73%	$ 2,900	$5,800
250%	70%	$ 2,900	$5,800
300%	70%	$ 3,867	$7,733
350%	70%	$ 3,867	$7,733
400%	70%	$ 5,800	$11,600
Based on a percentage of 2009 HSA limits

Poverty Guidelines, 2009
1	$ 10,830
2	$ 14,570
3	$ 18,310
4	$ 22,050
5	$ 25,790
6	$ 29,530
7	$ 33,270
8	$ 37,010

EQUAL Analysis: HR 3200 Delays Public Plan, Skirts Affordability

Summary: Key Blue Dog and Progressive Amendments

John Gilman (johnhgilman@yahoo.com) and Ellen Shaffer analyzed the House bill released on July 14, and relevant amendments in the Energy and Commerce Committee as of July 31. The new provisions from E & C are in bold & italics below. (See links below for further details.)

House leaders will consolidate this bill with versions approved by House Committees on Ways & Means, and Education and Labor, and present the combined bill for a vote by the full House, possibly in September. They can strengthen it.

The public plan does not begin until 2013, and affordability credits are limited. There are incentives for Medicare providers to participate, improvements to Medicare, and expansion of primary care. In the Energy and Commerce bill, Blue Dog amendments add to costs, Progressive amendments help protect affordability. One amendment attempts to balance concerns on coverage for abortions.

Excerpt: [changes made in E & C in bold + Italics below)

Concerns: These provisions should be changed to strengthen coverage and affordability:

· Delayed Implementation of Health Insurance Exchange, Public Option, and Affordability Credits and limited access once implemented.

o Exchanges do not go into effect until 2013. In that year the only employers that may insure through the Exchange are those with 10 or fewer employees. Individuals without other coverage may also enroll, but if they have been offered coverage by their employer they will not be eligible for any affordability credits.

o Beginning in 2014, any employer with 20 or fewer employees may enroll in the Exchange. Individuals without other coverage may also enroll, but if they have been offered coverage by their employer they will be eligible for affordability credits, but only if the employee’s share of premium exceeds 12% of adjusted gross income and the employee’s family income does not exceed 400% FPL. [Note: Prior version set threshold at 11%]

o Beginning in 2015, and beyond, the Health Care Commissioner may, but is not required to, expand employer participation to larger employers.

· There is an individual mandate to have insurance but Affordability Credits are limited. These credits are not available unless you receive coverage through the Exchange, and even then, they are not available through the Exchange if you have declined coverage from your employer unless your share of premium under your employer’s plan exceeds 12% of your income. [Note: Prior version set threshold at 11%]

o Affordability Credits provide some protection for those who qualify, but these credits quickly phase-out and are not available for much of the middle class. Anyone with family income above 400% FPL ($43,320 for an individual; $88,200 for a family of four) is not eligible for any subsidy. The following are examples of health care costs for people buying coverage through the Exchange:

§ A single person with $16,000 annual income would receive a subsidy and pay no more than a $480 per year premium (3% of income), while having a cost sharing burden of 3-5% of medical costs.

§ A family of three, with family income of $72,000 would receive a subsidy and pay no more than an $8640 per year premium (12% of income), while having a cost sharing burden of up to 30% of medical costs with an out-of-pocket family limit of $10,000 per year. [Note: Prior version maximum annual premium was $7920 (11% of income)]

· The bill permits a basic insurance plan to have high out-of-pocket expenses. Cost sharing under the basic plan can be up to 30% of medical costs, with out-of-pocket limits of $5000 per individual and $10,000 per family.

A family of four with family income of $90,000 would not be eligible for any premium subsidy and in addition could expect to have a cost sharing burden of up to 30% of medical costs with an out-of-pocket family limit of $10,000 per year. According to the California HealthCare Foundation, in 2008, the average total family premium for an employer sponsored PPO in California is $1251/month ($15,012/year). This family would be paying over 16% of its income just for the health care premium.

Table 1. Premium/Income Thresholds. If an employer offers insurance, and an employee's share of premium is greater than these amounts (12% of income), the employee is eligible to decline the employer's offer and enter the Health Insurance Exchange to buy insurance as an individual. S/he would be eligible to receive Affordability Credits. (Based on the 2009 Federal Poverty Guidelines):

Persons in family

Income Poverty guideline

Premium cap@12%

200% of poverty

Premium cap@12%

300% of poverty

Premium cap@12%

400% of poverty

Premium cap@12%

1

$10,830

$1,300

$21,660

$2,599

$32,490

$3,899

$43,320

$5,198

2

14,570

1,748

29,140

3,497

43,710

5,245

58,280

6,994

3

18,310

2,197

36,620

4,394

54,930

6,592

73,240

8,789

4

22,050

2,646

44,100

5,292

66,150

7,938

88,200

10,584

5

25,790

3,095

51,580

6,190

77,370

9,284

103,160

12,379

6

29,530

3,544

59,060

7,087

88,590

10,631

118,120

14,174

7

33,270

3,992

66,540

7,985

99,810

11,977

133,080

15,970

8

37,010

4,441

74,020

8,882

111,030

13,324

148,040

17,765

Families with more than 8: add $3,740 to income limit for each additional person

Guidelines are slightly higher for Alaska and Hawaii

Poverty guidelines: http://aspe.hhs.gov/poverty/09fedreg.shtml

Table 2. Maximum annual premium, and Out-of-pocket spending limits, for individuals who purchase insurance through the Health Insurance Exchange. Any additional premium costs would be covered by Affordability Credits (subsidies) paid for by the federal government. (2 examples shown here. Click on link to see Family Sizes 1 - 8)

Table 2: Maximum Premiums and Out of Pocket Payments under HR 3200
Family size =1		FPL =	$ 10,830
Percent of FPL*		Income Level		Maximum Premium	Premium as a	**Maximum Cost-sharing
					% of income	as a % of charges
133%		$14,404		$ 216	1.5%	3%
150%		$16,245		$ 487	3.0%	7%
200%		$ 21,660		$1,191	5.5%	15%
250%		$ 27,075		$2,166	8.0%	22%
300%		$ 32,490		$3,249	10.0%	28%
350%		$ 37,905		$4,170	11.0%	30%
400%		$ 43,320		$5,198	12.0%	30%

Family size =4		FPL =	$ 22,050
Percent of FPL		Income Level		Maximum Premium	Premium as a	**Maximum Cost-sharing
					% of income	as a % of charges
133%		$ 29,327		$ 440	1.5%	3%
150%		$ 33,075		$ 992	3.0%	7%
200%		$ 44,100		$ 2,426	5.5%	15%
250%		$ 55,125		$ 4,410	8.0%	22%
300%		$ 66,150		$ 6,615	10.0%	28%
350%		$ 77,175		$ 8,489	11.0%	30%
400%		$ 88,200		$10,584	12.0%	30%

NOTES: .	* FPL = Federal Poverty Level
	**Total annual maximum cost sharing (in dollars) for all income levels is $5000 per individual/ $10,000 per family.
	Includes all out of pocket (OOP) expenses

HOUSE RELEASES NEW HEALTH REFORM BILL JULY 14, 2009

The 1,017 page bill modifies the June discussion draft. Three House Committees plan to begin marking up the bill, according the jurisdiction of each. The goal is to come to consensus and a vote before the August recess.

HOUSE TRI-COMMITTEE HEALTH REFORM BILL 6-19-09

The House Commitees on Energy & Commerce, Education & Labor, and Ways & Means, produced an 850 page health reform bill. It includes a public plan that would reimburse providers at or close to Medicare rates.

Earlier, the three Committees in the U.S. House of Representatives responsible for health reform had issued an outline of their starting point. The Committees on Ways and Means, Energy and Commerce, and Education and Labor, collaborated on this document.

EQUAL Health Network

Center for Policy Analysis

San Francisco Presidio

P.O. Box 29586, San Francisco, CA 94129

ph. 415-922-6204 fax 415-885-4091