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Healthcare Reform Reconciliation Bill

 

Email Alert

By Julie Barnes*

March 19, 2010

Late yesterday, Democratic leaders of the U.S. House of Representatives released the language of a 153-page reconciliation bill that makes several changes to the healthcare reform bill that the U.S. Senate passed on Christmas Eve. Access the reconciliation bill.

The House Rules Committee will meet tomorrow morning to finalize the procedural rules for the vote that is expected to take place on Sunday, March 21, 2010. House Democratic leaders need 216 votes to pass the legislation before the Senate begins its own reconciliation process.

The changes to the Senate healthcare reform bill reflect President Barack Obama's recently announced priorities for the healthcare reform overhaul:

Coverage

Tax credits are increased for middle-income families to buy private insurance; the tax penalty for an individual's failure to purchase insurance is adjusted; the exclusion from gross income for employer-provided health coverage is extended to include adult children up to age twenty-six. The bill is expected to create new avenues to buy and provide new subsidies for private insurance coverage to thirty-two million Americans.

Access

Mandatory funding for community health centers is increased to $11 billion over five years.

Insurance Reforms

The prohibition of lifetime limits, prohibition on rescissions, limitations on excessive waiting periods is extended, and a requirement to provide coverage for non-dependent children up to age twenty-six to all existing health insurance plans begins six months after enactment. For group health plans, preexisting condition exclusions and annual limits are prohibited beginning in 2014.

Drugs

The underlying 340B expansion to inpatient drugs and exemptions to group purchasing organization exclusion is repealed and orphan drugs are exempt from required discounts for new 340B entities.

Federal Programs

Medicare

A $250 rebate will be given to all Medicare Part D enrollees who enter the coverage cap (donut hole) in 2010 and increases discounts on brand-name drugs gradually to close the donut hole by 2020. Medicare Advantage (MA) payments will be frozen in 2011, and reductions to MA benchmarks will be phased in over time. Medicare disproportionate share hospital cuts are to begin earlier, in fiscal year 2014.

Medicaid

The Nebraska special deal to receive 100% federal matching rate for Medicaid costs of newly eligible individuals is removed and applied to all states until 2016. Medicaid payment rates to primary care physicians will be increased to 100% of Medicare payment rates in 2013 and 2014.

Waste, Fraud, and Abuse

Funding for the Health Care Fraud and Abuse Control Fund will be increased by $250 million over the next decade.

Revenue

The biggest revenue-raiser in the bill is a fixed (rather than adjusted for inflation) Medicare payroll tax on unearned income for joint filers earning $250,000 or more and individuals making more than $200,000. Beginning in 2018, the excise tax on high-cost health plans will be applied to policies that cost more than $10,200 per year for individuals and $27,500 for families. Slightly delayed industry fees include a fee assessed on brand-name pharmaceutical sales, a 2.9% excise tax on medical devices, and a health insurance fee. The bill eliminates a tax credit received by cellulosic biofuel producers for unprocessed fuels known as "black liquor."

*We would like to thank Julie Barnes, Esquire (New America Foundation, Washington, DC), for providing this email alert.

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