CQ TODAY ONLINE NEWS
– HEALTH
June 19, 2009 – 6:20 p.m.
Health Care Overhaul Full of Contentious Provisions
By Drew Armstrong, CQ Staff
Buried inside a health care overhaul draft bill unveiled by House Democrats on Friday are a collection of proposals likely to draw opposition from Republicans, including a profit limit on insurance companies, a powerful “Health Benefits Advisory Council” that would regulate much of a new insurance market, and potentially controversial provisions on a government-run health insurance option.
Under one provision in the 852-page draft legislation, health insurance companies would have their profit and administrative margins limited to 15 percent of the money they take in through premiums.
Known as a “minimum loss ratio,” the requirement would take effect within a year of the bill’s enactment into law and would apply to all private insurers. Health insurance customers would get any extra money rebated back to them, according to the bill.
A spokesman for House Ways and Means Committee Democrats said it was incorrect to describe the provision as a profit limit.
“It doesn’t limit profits, but says they have spend a certain amount on the benefits that people are actually purchasing,” said spokesman Matthew Beck.
Democrats are including the proposal as a way of “improving efficiency and value in health care,” the bill says.
Another proposal in the bill would give the surgeon general’s office broad powers over private insurance plans seeking to sell products in the “exchange” market that would be used to cover many currently uninsured Americans.
According to the draft, the surgeon general would head a panel known as the “Health Benefits Advisory Council.” The board would be able to set minimum standards for private insurance plans to participate in the exchange, to be reviewed and approved by the Department of Health and Human Services.
The board would have 26 members, appointed by the president and the Government Accountability Office.
The surgeon general is currently little more than a communications position. While ostensibly the director of the U.S. Public Health Service Corps, the surgeon general typically serves as the nation’s doctor, issuing messages on health and wellness.
A third provision deals with the government-run insurance plan House Democrats included in the bill to compete with private insurers.
Democrats have touted the public plan as a way to keep costs down and force private insurers to compete aggressively for business.
But one provision in the plan would also at least party achieve a long-held Democratic goal to have the government negotiate drug prices with pharmaceutical companies.
Under the public plan, doctors and hospitals would be paid Medicare rates for the first three years, plus a 5 percent additional payment for those that participated in the public plan as well as Medicare.
For prescription drugs, however, the government would have negotiating authority to buy them, something it currently lacks in the Medicare Part D drug benefit. There, drug prices are negotiated by the private insurance companies that administer the plans.




Comments
As we know, the public option currently being discussed is modeled after Massachusetts Plan, under which about 97% of all Massachusetts residents are now covered. However, in recent estimates, CBO left out two crucial features, including a 'public health insurance option' and 'employer mandate and an individual mandate'. The estimates with 'no employer mandate and an individual mandate' ended up with 36 million uninsured. By contrast, in case the proposed provisions with respect to the strong public option, medical IT, increased efforts in prevention, and a broader array of cost-saving plans and beyond add to the Massachusetts Plan with the provision of employer mandate and an individual mandate, the cost containment does not matter at all. And most importantly, the promising stem cell research is making its way. To date, private insurers have coexisted profitably with Medicare and Medicaid for many years. Basically, healthy society leads to better productivity and better performance.
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