12 New Features in the Latest House Health Reform Bill

Much has happened in the discussion of healthcare reform since three House committees voted to approve their versions of the initial bill (HR 3200) before adjourning for summer recess.

In the intervening three months, discussions played out in a variety of venues—from town hall meetings to Capitol Hill hearing rooms—that have created a bill with many changes. Here's a look at 12 of the new features in the Affordable Health Care for America Act (HR 3962) that was released on Thursday:

Public insurance option. While HR 3200 did have a public insurance option, the way it proposed to pay for services was different. With the lower-cost earlier version, hospitals and physicians would have been paid using Medicare rates, plus 5%—a formula that most hospitals and physicians opposed. The new public option proposal requires the Health and Human Services (HHS) secretary to negotiate rates with healthcare providers--as private insurers currently do. The House bill does not have a state opt-out measure that is likely to be proposed in the Senate bill when it comes to the floor of that chamber.

"Millionaire" healthcare surcharge. In the earlier version approved by the House Ways and Ways Committee, those individuals making $280,000 or families making more than $350,000 would have been required to pay a surcharge. In the new bill, this has been raised to encompass only the wealthiest 0.3% of the population: individuals making above $500,000 and families above $1 million would pay the surcharge.

Doughnut hole timeline. The revised bill moves up the effective date to begin reducing the Medicare drug payment doughnut hole from Jan. 1, 2011, to Jan. 1, 2010. The hole initially will be reduced by $500, with a 50% discount instituted for brand name drugs paid for in the hole. Elimination of the doughnut hole will be achieved by 2019, instead of 2024 under the earlier bill.

Value-based Medicare payment formula. A new provision was included that changes the way Medicare pays hospitals and physicians—by moving from a formula that pays for the volume of tests and procedures performed to a value based formula that emphasizes quality care and cost effectiveness. The Institute of Medicine (IOM), through two studies, will make recommendations on how to fix the current Medicare reimbursement system, including addressing current geographic variations.

Insurance cooperatives. Under the revised House bill, grants and loans would be made available for the establishment and initial operation of not for profit, member-run health insurance cooperatives. They could provide coverage through the health insurance exchanges.

Intermediate assistance for uninsured. To fill the gap before the health insurance exchange is ready, an insurance program with financial assistance will be made available for those who have been uninsured for several months or denied a policy because of pre existing conditions.