New Health Reform Features Public Option, Individual Mandate, Payment Changes

Paying for the reform likely will be the challenge. House Democrats currently seek raising about $544 billion over the next 10 years with a graduated surtax on the incomes of wealthier families and individuals. As proposed now, the plan would mean that:

• Joint filers with adjusted annual gross incomes between $350,000 and $500,000, and individual taxpayers with adjusted gross incomes between $280,000 and $400,000, would pay an additional 1% income tax.
• Joint filers making between $500,000 and $1 million and individual filers making between $400,000 and $800,000 would pay an additional 1.5% income tax.
• Joint filers making more than $1 million and individuals making more than $800,000 would pay an additional 5.4% income tax.

To provide coverage and choice and expand healthcare coverage, the newly drafted bill calls for:

• Creating a health insurance exchange that would permit individuals and small employers to shop and select among private and public insurers for coverage.
• Establishing a public health insurance option that would be subject "to the same market reforms and consumer protections" as other private plans in the exchange; it would be self sustaining—financed only by its premiums.
• Creating guaranteed coverage and insurance market reforms to prevent insurers from refusing to sell or renew policies because of an individual's health status or from excluding coverage of treatments for pre existing health conditions.
• Developing a benefit package based on "standards set in the law" by a new independent advisory committee staffed by practicing providers and healthcare experts and chaired by the U.S. surgeon general.

The bill calls for "shared responsibility"—or requiring all American to get coverage or pay a penalty by:

• Giving employers an option to provide coverage or pay the government a fee based on 8% of their payroll.
• Requiring individuals to obtain coverage or pay a fee equivalent to 2% of their adjusted gross income (except in cases where hardship is indicated).
• Exempting small businesses with payrolls under $250,000 from the fee, but phased in for employers with payrolls above that level.

For the healthcare workforce, the new bill calls for:

• Increasing the National Health Service Corp to reach more underserved areas.
• Promoting more training of primary care physicians and "expansion of the pipeline" of those going into primary care, nursing, and public health.
• Redistributing unfilled graduate medical education residency slots for the training of more primary care physicians.

There is additional focus on controlling costs by:

• Encouraging innovation through accountable care organizations, medical homes, and bundling of acute and post acute provider payments.
• Preventing waste, fraud, and abuse.
• Promoting administrative simplification through reducing paperwork.