For other versions of this document, see http://wikileaks.org/wiki/CRS-RL34389 ------------------------------------------------------------------------------ Prepared for Members and Committees of Congress ¢ Congress last debated comprehensive health insurance reform in the 1990s. At that time, the Health Security Act, a bill originating with President Clinton and then First Lady Hillary Clinton, was considered alongside a number of bills introduced by Senators Chafee, Daschle and Dole, and Representatives Gephardt and Bilirakis, among others. The Health Security Act (H.R. 3600, 103rd Congress) would have required health insurance coverage for all U.S. citizens, reformed existing public health insurance programs, and established caps on health care spending. At the time, escalating health care and health insurance costs, declining numbers of individuals with private coverage, and state experimentation and innovation spurred the federal debate. Today, similar conditions may be setting the stage for reconsideration of major health insurance reform. Health insurance reform bills introduced in the 110th Congress can be classified as attempting to expand coverage using one of the following approaches: · Largely replace existing coverage with a national health insurance program (or a national health service). · Expand existing public programs for certain individuals. · Expand privately sponsored coverage--including proposals to · expand employer-based health insurance, · expand the individual market for health insurance, and · improve the private market for health insurance. · Encourage state-based reforms. · Simultaneously expand private and public coverage options. This report presents basic background on health insurance that may be useful to legislators considering health insurance reforms. It describes reform approaches and provides brief descriptions of health insurance reform bills introduced in the 110th Congress. The potential impact of various approaches and bills is not analyzed in this report, however. As a result, it does not provide evaluations of how well different bills, once enacted, would meet their objectives. The relative impact of different bills on their varying objectives is likely to vary widely. This report will not be updated. Introduction ..................................................................................................................................... 1 What Is Health Insurance Reform All About? .......................................................................... 1 Different Objectives............................................................................................................ 2 Prioritizing Among Stakeholders ........................................................................................ 3 Scope of Reform ................................................................................................................. 3 General Approaches to Health Insurance Reform ........................................................................... 5 National Health Insurance Program .......................................................................................... 5 Expand Existing Public Programs for Certain Individuals ....................................................... 6 Expand Privately Sponsored Coverage ..................................................................................... 7 Expanding Employer-Based Coverage ............................................................................... 7 Improving Access to Health Insurance in the Individual Market ....................................... 9 Market Reforms ................................................................................................................ 10 Encourage State-based Reforms.............................................................................................. 12 Simultaneously Expand Private and Public Coverage Options............................................... 14 Health Insurance Reform Bills in the 110th Congress ................................................................... 14 National Health Insurance Program ........................................................................................ 15 H.R. 15.............................................................................................................................. 15 H.R. 676............................................................................................................................ 15 H.R. 1200.......................................................................................................................... 15 H.R. 1841.......................................................................................................................... 16 H.R. 2034/S. 1218............................................................................................................. 16 H.R. 3000.......................................................................................................................... 16 Expand Privately Sponsored Coverage ................................................................................... 16 H.R. 227............................................................................................................................ 16 H.R. 241............................................................................................................................ 17 H.R. 914/S. 397................................................................................................................. 17 H.R. 1802.......................................................................................................................... 17 H.R. 2132.......................................................................................................................... 17 H.R. 2302.......................................................................................................................... 18 H.R. 2626.......................................................................................................................... 18 H.R. 2737.......................................................................................................................... 18 H.R. 3515.......................................................................................................................... 18 H.R. 3516.......................................................................................................................... 19 H.R. 3975.......................................................................................................................... 19 H.R. 5348.......................................................................................................................... 19 H.R. 5784.......................................................................................................................... 19 H.R. 5923.......................................................................................................................... 19 H.R. 5955/S. 3072............................................................................................................. 19 H.R. 6110 .......................................................................................................................... 20 H.R. 6210.......................................................................................................................... 20 H.R. 6582.......................................................................................................................... 20 H.R. 6699.......................................................................................................................... 20 S. 99 .................................................................................................................................. 21 S. 733 ................................................................................................................................ 21 S. 1019 .............................................................................................................................. 21 S. 1783 .............................................................................................................................. 21 S. 1875 .............................................................................................................................. 22 S. 1886 .............................................................................................................................. 22 S. 1899 .............................................................................................................................. 22 S. 2795/H.R. 5918............................................................................................................. 22 S. 2818 .............................................................................................................................. 23 S. 2835 .............................................................................................................................. 23 S. 2948 .............................................................................................................................. 23 S. 3554 .............................................................................................................................. 24 Grants to States ....................................................................................................................... 24 H.R. 506............................................................................................................................ 24 H.R. 3507/S. 2031............................................................................................................. 24 S. 325 ................................................................................................................................ 24 Simultaneously Expand Private and Public Coverage Options............................................... 25 H.R. 2351.......................................................................................................................... 25 H.R. 3163.......................................................................................................................... 25 H.R. 6280.......................................................................................................................... 25 H.R. 7129.......................................................................................................................... 25 S. 158 ................................................................................................................................ 26 Author Contact Information .......................................................................................................... 27 Acknowledgments ......................................................................................................................... 27 Congress last debated comprehensive health insurance reform in the 1990s. At that time, the Health Security Act, a bill originating with President Clinton and then First Lady Hillary Clinton, was considered alongside a number of bills introduced by Senators Chafee, Daschle and Dole, and Representatives Gephardt and Bilirakis, among others. The Health Security Act (H.R. 3600 103rd Congress) would have required health insurance coverage for all U.S. citizens, reformed existing public health insurance programs, and established caps on health care spending. At the time, escalating health care and health insurance costs, declining numbers of individuals with private coverage, and state experimentation and innovation spurred the federal debate. Reforming the one-seventh of the U.S. economy devoted to health care would have been no small feat, however, and despite considerable efforts by the 102nd and 103rd Congresses, comprehensive health insurance reform did not succeed. Support for the Health Security Act began to decline well before its formal consideration was complete. Among the concerns raised were the non- transparent process under which the plan was developed and the government involvement that would result from its implementation.1 Many of the bills considered after H.R. 3600 were rejected for not extending coverage far enough among the uninsured. Today, similar conditions may be setting the stage for reconsideration of major health insurance reform. While in the midst of a recession, the costs of health insurance and health care services are consuming a growing portion of workers' compensation, and the percentage of individuals with job-based coverage is declining. States are innovating and experimenting, providing useful trials and errors to potentially inform the debate at the federal level. This report presents basic background on health insurance that may be useful to legislators considering health insurance reforms. It describes health insurance reform approaches and provides brief descriptions of health insurance reform bills introduced in the 110th Congress. The potential impact of various reform approaches and bills is not analyzed in this report, however. As a result, it does not provide evaluations of how well different bills, once enacted, would meet their objectives. The relative impact on such objectives probably varies widely. Health insurance reform is a broad term that could potentially span a large range of policy options, all of which have their own inherent strengths and weaknesses. Some health insurance reform bills address a discrete health insurance problem or issue, such as expanding public health insurance coverage for uninsured children or reducing the number of costly state mandates on private health insurance plans. At the opposite end of the spectrum, however, are proposals that operate on a broader scale--changing the way people access public and/or private health insurance, investing large amounts of government resources to assist individuals with the cost of health care or health insurance, reducing costs and improving quality. The scope of proposed 1 There are a large number of articles and books examining the failure of H.R. 3600, including Skocpol, T., "The Rise and Resounding Demise of the Clinton Plan," Health Affairs, Spring 1995; Blendon, R., Brodie, M., Benson, J., "What Happened to Americans' Support for the Clinton Health Plan?" Health Affairs, Summer 1995; Clymer, A., Pear, R., and Toner, R., "The Health Care Debate: What Went Wrong?" New York Times, August 29, 1994; "National Health Program, President's Grandest Goal, Is Declared Dead in Congress," New York Times, September 27, 1994; Starr P., "What Happened to Health Care Reform?" American Prospect, vol. 6. no. 20, December 1995:20-31. reforms is one factor that makes a simple yet comprehensive discussion of all of the important options challenging. Other fundamental differences separating health insurance reform approaches include different objectives of reforms and different priorities among important stakeholders. Health insurance reform bills introduced in the 110th Congress have surprisingly different primary objectives, which can include the following: · Reducing the number of people without health insurance. Most health insurance reforms seek to improve access to needed medical care. In the United States, access to a great deal of expensive medical care is dependent on whether an individual has health insurance. · Reducing the reliance on health insurance for at least some portion of needed medical care. A number of bills reflect the position that part of the insurance problem in the United States is that people have too much of it--that the presence of insurance has desensitized Americans to the cost of health care services, allowing both the demand for and the prices of medical care, whether necessary or unnecessary, to grow too quickly. These bills include provisions intended to encourage cost-consciousness in individuals' choices of health insurance and health care and include a group of approaches sometimes referred to as promoting "consumer directed" health care.2 · Reducing the cost of health insurance. Some advocates of reform believe that the rising cost of health insurance must be addressed before other problems can be dealt with. Their reform approaches reflect the belief that more people will purchase insurance once more affordable plans are available. Thus, they assert reducing the number of uninsured is secondary to reducing the cost of the insurance. Cost-reducing approaches span the continuum, from preempting the application of costly state laws to establishing a single government payer for all health insurance. Advocates of single payer approaches believe such a system would improve administrative efficiencies, thereby reducing overall health insurance costs. A number of bills in the 110th Congress feature other objectives related to improving the quality of medical care or the quality of health insurance products. Proposals to improve health outcomes, increase the availability of information about high-quality health care and providers, and establish disease management systems are raising interest among private insurers, government programs, and employers. These provisions alone, however, will not reduce the number of people without any insurance, and their effect on medical costs is as yet undetermined.3 2 Goodman, J., What Is Consumer-Directed Health Care? Health Affairs Web Exclusive, at http://content.healthaffairs.org/cgi/content/full/25/6/w540. 3 Mattke, S., Seid, M., Ma, S., "Evidence for the Effect of Disease Management: Is $1 Billion a Year a Good Investment?" American Journal of Managed Care, vol. 13, 2007. What constitutes adequate health insurance is an important consideration that is beyond the scope of this report. Nonetheless, sponsors of bills extending coverage are likely to grapple with complex questions about the kind of coverage that should be extended. Sponsors of bills offering generous government subsidies for health insurance may feel that it is their duty to set a minimum standard for qualifying coverage as a way to ensure that taxpayers' funds are being used responsibly. £ One of the challenges of undertaking comprehensive health insurance reform is that every U.S. citizen is a stakeholder whose preferences and needs differ from those of others. Reform approaches reflect different choices about the relative importance of needs among stakeholder groups, including federal, state, and local governments, health care providers, medical researchers, insurance carriers, employers, workers, and consumers. Needs can vary considerably between stakeholder groups, and even within them. For example, health care consumers may prefer low-cost health insurance obtained through lower profits to health insurers while, according to standard economic theory, those health insurers will seek to maximize profits. Within consumer groups, there are healthy people who may prefer limited insurance coverage or none at all, while elderly or less healthy consumers may prefer more comprehensive coverage. Sometimes meeting the needs of one group can exacerbate the problems encountered by others. For example, requiring health care premiums to be community rated--that is, based on the average costs of everyone in a large group--can reduce premiums for individuals with expensive medical conditions. On the other hand, community-rated rates could lead to higher premiums for the healthiest individuals. Since the early 1990s, a number of incremental health insurance reforms have been enacted (see Text Box 1). Health insurance reform bills introduced in the 110th Congress reflect little consensus about whether to continue incremental improvements building on our current patchwork of coverage or to implement reforms with much broader scope. s0991 ylraE eht ecniS smrofeR ecnarusnI htlaeH laredeF latnemercnI .1 xoB txeT dna ,smargorp eraflew hsac morf dekniled saw ,eracideM htiw gnola 5691 ni dessap yllaitini ,diacideM rof ytilibigilE ,91033LR tropeR SRC eeS( .dega niatrec dna ,nemow tnangerp ,nerdlihc rof desiar erew sdlohserht ytilibigile diacideM nerdlihC dna stludA rof ytilibigilE ).enraeH naeJ yb , eht ni smelborp fo rebmun a desserdda )AAPIH( 6991 fo tcA ytilibatnuoccA dna ytilibatroP ecnarusnI htlaeH ehT .ecnarusni rof stekram laudividni dna puorg llams eht ni ylralucitrap ,ecnarusni htlaeh etavirp fo gnitar dna gnireffo gnitsixeerp fo htgnel eht decuder snoisivorp ecnarusni sti ,ecnarusni htlaeh fo ytilibatrop gnivorpmi tuoba ylbisnetsO rof snalp fo ytilibaliava eht deetnaraug ,tekram puorg llams eht ni slaudividni niatrec rof sdoirep noisulcxe noitidnoc .snoitidnoc htlaeh no desab spuorg llams nihtiw slaudividni tsniaga noitanimircsid decuder dna ,elpoep elbigile niatrec ecnadiuG dna weivrevO :6991 fo )AAPIH( tcA ytilibatnuoccA dna ytilibatroP ecnarusnI htlaeH ehT ,43613LR tropeR SRC eeS( ).la te dnikiahC adniH yb ,snoitseuQ deksA yltneuqerF no stnarg gnihsilbatse ,)PIHCS( margorP ecnarusnI htlaeH s'nerdlihC etatS eht detaerc 7991 fo tcA tegduB decnalaB ehT etatS ,37403LR tropeR SRC eeS( .nerdlihc emocni-wol derusninu ot ecnarusni htlaeh edivorp ot esu ot setats rof .P enylevE dna ,nosreteP .L sirhC ,zreH .J aicilE yb ,weivrevO feirB A :)PIHCS( margorP ecnarusnI htlaeH s'nerdlihC ).rekcurmuaB rof sloop ksir-hgih dnapxe ro pu tes ot setats rof stnarg :smargorp wen owt detaerc 2002 fo tcA edarT ehT niatrec rof stiderc xat egarevoc htlaeh dna ,tekram laudividni eht ni ecnarusni htlaeh dnif tonnac ohw slaudividni .noitaroproC eetnarauG tifeneB noisneP eht yb deetnaraug era snoisnep esohw elpoep dna slaudividni deyolpmenu tropeR SRC dna ,zednanreF ettedanreB yb ,slooP ksiR hgiH etatS :ecnarusnI htlaeH ,54713LR tropeR SRC eeS( 2002 fo tcA edarT eht yb dezirohtuA tiderC xaT egarevoC htlaeH ,02623LR ).zednanreF ettedanreB yb , .ytilibigile dednetxe yeht sselnu diacideM ro eracideM ot smrofer edulcni ton seoD :etoN A number of incremental reforms enacted over the past 15 years have improved the availability of health insurance for some populations. However, they have been built on a system where some continue to have no access to any insurance and others to only unaffordable options, where the number of uninsured has continued to rise, and where such changes may have exacerbated the loss of privately sponsored coverage. For example, a body of research has concluded that expanding Medicaid and the State Children's Health Insurance Program (SCHIP) has generated some crowd-out of private coverage; on the other hand, children are the only subpopulation in which uninsurance rates have fallen over the past decade.4 Questions about the scope of reforms extend to the cost of the reform plans. At one end of the federal financing spectrum are bills that feature subsidies for individuals to use toward the cost of health insurance. Such bills presume that a financial commitment from the federal government is essential to achieve universal or near universal coverage, whether coverage is provided through government programs or private plans. A fair amount of research supports the notion that significant subsidies would be needed to induce many of the uninsured to purchase coverage.5 4 Crowd-out occurs when public funds substitute for, rather than supplement, private funding. For more information, see Gruber, J., Simon, K., Crowd-out Ten Years Later: Have Recent Public Insurance Expansions Crowded out Private Health Insurance? National Bureau of Economic Research Working Paper 12858 http://www.nber.org/papers/w12858; Crowd-Out and SCHIP Reauthorization, An Alliance for Health Reform Toolkit, at http://www.allhealth.org/ publications/Child_health_insurance/Crowd-out_and_SCHIP_toolkit_70.pdf; Long S., Marquis, S., "Participation in a Public Insurance Program: Subsidies, Crowd-Out, and Adverse Selection," Inquiry, vol. 39, no. 3, Fall 2002. 5 Reschovsky, J., Hadley, J., Employer Health Insurance Premium Subsidies Unlikely to Enhance Coverage Significantly, Center for Studying Health System Change Issue Brief No. 46, December 2001; Thomas, K., "Are Subsidies Enough to Encourage the Uninsured to Purchase Health Insurance? An Analysis of Underlying Behavior," Inquiry, vol. 31, no. 4 (Winter 1994-95); Pauly, M., Herring, B., and Song, D., Tax Credits, the Distribution of Subsidized Health Insurance Premiums, and the Uninsured, Forum for Health Economics & Policy, 2002, (Frontiers in (continued...) On the other end of the spectrum are a number of market reform approaches that reflect the position that government laws and regulations have raised the cost of insurance, reduced the number of options available to people, and created disincentives to purchasing low-cost insurance. For example, state benefit mandates are blamed for increasing costs and reducing choices. Bills at this end of the spectrum aim to make the market for insurance work better, proposing to achieve higher coverage rates without subsidies because people will find health insurance products are more affordable by meeting, but not exceeding, their insurance needs. Health insurance reform bills introduced in the 110th Congress can be classified as expanding coverage using one of the following approaches:6 · Largely replace existing coverage with a national health insurance program (or a national health service). · Expand existing public programs for certain individuals. · Expand privately sponsored coverage--including proposals to · expand employer-based health insurance, · expand the individual market for health insurance, and · improve the private market for health insurance. · Encourage state-based reforms. · Simultaneously expand private and public coverage options. A number of proposals introduced in the 110th and earlier Congresses were directed at the creation of a national health insurance program. While the legislation can take a variety of forms, the general thrust of such proposals is to make basic health insurance available to all Americans so that access to health care would not be contingent on individuals' ability to pay or their employment status. These bills all share at least three common features: replacement of most or all of the existing sources of coverage, universal entitlement to health care or health insurance, and government-provided health coverage. National health insurance legislation in the 110th Congress generally took one of two approaches: social insurance7 or national health service. Under the social insurance approach, all individuals (...continued) Health Policy Research), Article 5 http://www.bepress.com/fhep/5/5; Marquis, S., Long, S., State Efforts to Insure the Uninsured, An Unfinished Story, a RAND Research Brief, 2005. 6 For other classification schemes, see Collins, S, Schoen, C., Davis, K., Gauthier, A., Schoenbaum, S., A Roadmap to Health Insurance for All: Principles for Reform, Commonwealth Fund, October 2007; Insuring America's Health: Principles and Recommendations, Institute of Medicine, Committee on the Consequences of Uninsurance, January 2004 http://www.iom.edu/CMS/3809/4660/16675.aspx. 7 The definition of "social insurance" used in this instance is based on its traditional definition, referring to "government-sponsored programs with all of the following characteristics: a. The program, including benefits and (continued...) would obtain their health insurance through a government-administered and financed system. Medicare is an example of a social insurance program for elderly and disabled individuals. Private insurers can retain a role in such a system, essentially acting as contractors. In contrast, the national health service approach, modeled after systems like Britain's National Health Service, includes universal coverage, as well as reforms of some or all of the factors of health care production--such as public ownership of hospitals, or public employment of physicians. Private insurers may or may not have a role is such a system. Because of the magnitude of the changes in such approaches, they would be subject to criticism, particularly about the level of governmental intrusion they would potentially introduce. The counterargument could be that the continuation of more incremental changes cannot be relied on to achieve universal or near universal insurance coverage. ¡ ¡ The majority of bills in the 110th Congress to expand public health insurance programs would have done so only for certain targeted groups of individuals. For example, some bills would have allowed younger non-disabled adults (for example, those between ages 55 and 64) to enroll in Medicare. Other bills would have eliminated the two-year Medicare waiting period for people who are disabled. Yet other bills would have extended SCHIP and Medicaid, with an objective of covering nearly all children. None of these partial coverage bills are summarized at the end of this report. Instead, the list of introduced legislation is focused on only those bills that are not limited to particular demographic groups. Although the bills characterized in this section are not listed at the end of this report because of their narrow scope, that is not to suggest their impact would be insignificant.8 If one measures the success of past health insurance reforms by the number of previously uninsured individuals who obtained health coverage, then the expansion of public programs (Medicare, Medicaid, and SCHIP) must be considered great successes. For example, in the years after the creation of SCHIP, the percentage of children who were uninsured fell by more than one-third; this is in contrast to a 12% increase among non-aged adults over the same period.9 A number of bills offered in the 110th Congress would have built on those programs to extend coverage to more uninsured individuals. Public program expansions have advantages over other types of reforms in that the programs are already operational and their administrative costs may (...continued) financing method, is prescribed by statute. b. The program provides for explicit accountability of benefit payments and income, usually in the form of a trust fund. c. The program is financed by contributions (e.g., taxes or premiums) from or on behalf of participants, which in some programs are supplemented by government income from other sources. Investment income on program assets may also be used to finance the program. d. The program is universally (or almost universally) compulsory for a defined population, or the contribution is set at such a subsidized level that the vast majority of the population eligible to participate actually participate." From Actuarial Standard of Practice No. 32, Social Insurance, Actuarial Standards Board, Doc. No. 062, http://www.actuarialstandardsboard.org/pdf/asops/ asop032_062.pdf. 8 Some of these limited scope bills could potentially extend coverage to more uninsured individuals than some of the bills that are listed at the end of this report. Because this report focuses on approaches and not impact, it does not address those differences in coverage. 9 Based on the percentage of individuals uninsured for the full year, in 1996 and 2006, from the Medical Expenditure Panel Survey (MEPS), administered by the Agency for Healthcare Research and Quality (AHRQ). be lower, relative to the costs of benefits, than for typical private coverage.10 If the target population of a reform proposal is predominantly those who cannot afford private coverage, or if the proposal includes sliding scale subsidies, utilizing existing programs that already conduct income determinations and administer subsidies may be efficient. Proposals to expand public coverage while maintaining the existing private market for insurance face an obstacle in "crowd out." There is evidence that in the presence of expanding public coverage, private coverage will be lower than it would have been. However, analyses have concluded that when public programs cover the lowest income people, for whom few affordable private sources of coverage exist, crowd-out is low. But when public programs extend into higher income levels, crowd-out rises.11 ¡ ¢ Private health insurance sponsored by employers covers more than 60% of the U.S. population.12 As a result, a major portion of health insurance in this country is funded privately by workers and their employers. Some of the bills focus on expanding employer-based or "group" coverage generally, and others address the particular needs of small employers or the problems present in the individual market for insurance.13 Still other approaches focus on freeing private markets for insurance from the laws, regulations, and incentives that raise costs and reduce flexibility, with the hope that such changes would improve the availability and affordability of health coverage.14 ¡ ¢ Because more than 80% of uninsured individuals under age 65 are employed or are family members of a person with ties to employment,15 efforts to expand or strengthen the employer- based, or group, market for insurance can potentially be effective in reducing the number of uninsured. Work-focused approaches, of course, have limited impact on people who have no or tenuous ties to the workforce. Many bills in the 110th Congress proposed to subsidize workers' or employers' share of premiums (either directly or through tax credits, exclusions or deductions; see Text Box 2), mandate that some or all employers offer coverage, or improve pooling in the small employer market for 10 Reported administrative costs for Medicare and Medicaid are generally between 3% to 4% of benefits, while private plans range from between 5% to 50% of premium. Analysts argue, however, about whether the administrative public program data are complete and comparable. See Matthews, M., Medicare's Hidden Administrative Costs: A Comparison of Medicare and the Private Sector (Based in Part on a Technical Paper by Mark Litow of Milliman, Inc.), Council on Affordable Health Insurance, January 2006. 11 Public program crowd-out of private coverage: What are the issues? The Robert Wood Johnson Foundation, Research Synthesis Report No. 5, http://www.rwjf.org/pr/synthesis/reports_and_briefs/pdf/no5_researchreport.pdf. 12 CRS Report 96-891, Health Insurance Coverage: Characteristics of the Insured and Uninsured Populations in 2007, by Chris L. Peterson and April Grady. 13 For a background on the ways in which people obtain health insurance and the markets for insurance, see CRS Report RL32237, Health Insurance: A Primer, by Bernadette Fernandez. 14 The list of bills at the end of this report associated with this section do not include limited scope reforms that, for example, prohibit pre-existing condition exclusions for children or restrict private plans' ability to use lifetime limits. 15 See Figure 1 in CRS Report 96-891, Health Insurance Coverage: Characteristics of the Insured and Uninsured Populations in 2007, by Chris L. Peterson and April Grady. stop-loss policy that reimburses them for losses above a specified level.) collected premiums instead of passing that risk along to the insurance company (although many of them purchase a insurance carrier. Those employers retain the risk that costs of medical benefits for their employees exceed the 17 Many large employers self-insure their own health coverage instead of purchasing insurance through a traditional Uccello, American Academy of Actuaries at the National Association for Social Insurance 2008 Annual Meeting.) more predictable and stable the premiums can be. (From "Overview: Insurance Markets 101" presentation by Cori together allows the costs of the less healthy to be subsidized by the healthy. In general, the larger the risk pool, the Risk pools are large groups of individuals whose medical costs are combined to calculate premiums. Pooling risks 16 .tnemnrevog eht morf ro srerusni lla morf snoitubirtnoc yb dednuf loop a rehtie ot spuorg niatrec gnirevoc rof ksir "ssecxe" eht fo emos refsnart ot esoporp sllib esehT .ssergnoC ht011 eht ni sllib mrofer ecnarusni htlaeh fo rebmun a ni deraeppa ,ecnarusni-er ,esoht fo enO .setuor tcerid ssel aiv ecnarusni ezidisbus ot syaw rehto era erehT .egarevoc rof stnemyap laudividni ro reyolpme gnitsixe fo tuo-dworc gnigaruocne yb smelborp yrategdub etabrecaxe dluoc seidisbus ,yllaniF .emocni gnisaercni htiw seilimaf ro slaudividni rof eludehcs tuo-esahp reporp eht ro ,egarevoc drawot etubirtnoc ot detcepxe eb dluohs ylimaf ro laudividni emocni-wol a taht emocni fo tnuoma mumixam eht ,egarevoc yub ot gnilliw emoceb lliw ohw seilimaf ro slaudividni derusninu fo rebmun eht ezimixam ot level ydisbus tcerroc eht wonk ot tluciffid si tI .sdnuf cilbup tsewef htiw sesahcrup ecnarusni htlaeh mumixam eveihca ot netfo si stnuoma ydisbus gnittes ni laog enO .metsys xat eht hguorht ro yltcerid dereviled rehtehw ,seidisbus gnitaulave ni esira snoitacilpmoc rehto ,sretirw llib roF .srekrow pleh yletamitlu ton yam ro yam seidisbus reyolpme dnA .tluciffid si metsys eht otni meht gnitteg ;snruter xat launna elif ton od ytilibail xat tuohtiw seilimaf ro slaudividni emocni-wol ynaM .egarevoc gnizidisbus rof smetsys dezinituor setacilpmoc ,seidisbus rof elbigile esoht fo slevel emocni gniyrav htiw denibmoc ,snalp tnereffid rof stsoc muimerp ni noitairav egral ehT .segnellahc evitartsinimda esiar sehcaorppa llA .snalp 'srekrow ot snoitubirtnoc reyolpme suoreneg erom egaruocne ot sreyolpme ot yltcerid seidisbus ro stiderc xat edivorp dluow sllib fo puorg lanif A .elbigile era yeht hcihw rof ydisbus eht fo tnuoma eht ni stiderc xat eviecer dluow yeht ,dlohserht ytilibigile eht woleb eb ot denimreted si emocni rieht fi dna ;raey tsap eht gnirud egarevoc rieht ot tsetta dluow srelif xat ,hcaorppa dnoces eht rednU .sgnilif xat laredef launna gnitsixe eht otni seidisbus dliub dna )SRI( ecivreS euneveR lanretnI eht ezilitu ot si hcaorppa dnoces ehT .reirrac ecnarusni eht ot yltcerid edam eb dluow stnemyap ro ,stsoc ecnarusni rieht drawot esu ot rehcuov ro tnemyap a htiw rehtie dedivorp eb dluow ,elbigile denimreted ecno ,dna eciffo etairporppa eht ot ylppa dluow slaudividnI .ycnega htlaeh detangised s'tnemnrevog laredef ro etats eht yb deretsinimda eb dluow taht ecnarusni htlaeh rof seidisbus tcerid etaerc dluow sllib emoS .ssergnoC ht011 eht ni dereffo sllib ni desoporp era egarevoc htlaeh ezidisbus ot syaw evitanretla eerhT .emocni s'ylimaf eht fo %52 naht erom rof tnuocca ylisae nac level ytrevop laredef eht eciwt ta ylimaf a rof smuimerp ecnarusni htlaeh esuaceb ,stsoc htiw ecnatsissa edulcni ot dnet egarevoc esahcrup ot slaudividni eriuqer taht sllib nevE .ti esahcrup ot gnilliw eb yam nosrep emocni-tsedom ro -wol a erofeb muimerp a fo noitrop tnacifingis a revoc ot deen seidisbus taht dnif ecnarusni htlaeh rof dnamed 'slaudividni gninimaxe seiduts suoiraV .yrassecen eb ot ylekil si ecnarusni htlaeh fo tsoc eht htiw ecnatsissa laicnanif ,egarevoc ecnarusni htlaeh etavirp lasrevinu raen ro lasrevinu eveihca oT ecnarusnI htlaeH etavirP rof seidisbuS .2 xoB txeT small group or individual markets for insurance. administrative costs, can confer a considerable cost advantage over similar benefit plans in the not defined as "insurance"). This, along with the broad risk spreading and low per person insures,17 its health benefits are not subject to state insurance laws and regulation (because it is economies of scale that keep per person administrative costs low. When a large employer self- employer groups are able to spread risk more broadly among their employees and enjoy approaches are discussed more thoroughly in the "Market Reforms" section below.) Large face in providing health insurance as a benefit relative to large employers. (A number of these insurance.16 A number of bills were intended to address the disadvantages that small employers Most health insurance in the United States is obtained through employment. This is due to a number of factors--workers perceive employers as paying for most of the cost of group health insurance, and payments for group plans have tax-advantaged status.18 Further, the cost of group plans are calculated for an entire group, whereas people in the individual, or non-group, market are often "underwritten" based on their own health status--that is, the price of the insurance policy is based on an individual's own set of health conditions. While health underwriting could result in low-cost plans for healthy individuals seeking coverage, those with medical conditions could be at a significant price disadvantage relative to the price they might be charged if their premiums were averaged across an employment based group. Insurers selling plans in many states can even refuse to sell to individuals with health conditions, or sell policies that exclude coverage for particular conditions and sometimes for entire body systems.19 Some bills offered in the 110th Congress were intended to address these issues, in the hopes of making the individual market work better for more people. Potential advantages of improving the individual market for insurance include · increasing individuals' choices (coverage options would not be limited to those chosen by their employer), and · increasing the portability of health insurance (portable health insurance does not have to be discontinued when one leaves a job). Tools utilized by individual market bills include · giving individually purchased insurance the same tax-advantaged status as employer-sponsored coverage, and · providing subsidies for the purchase of coverage in the individual market. Some bills would eliminate the tax benefits for employer-based health insurance premiums and replace them with new tax benefits for coverage in the individual market. (See Text Box 3 for summaries of tax policies related to health insurance.) These provisions were intended, over time, to provide incentives for people to move from employer-based coverage to coverage in the individual market. However, because of the market limitations discussed above, such as health underwriting, lack of guaranteed availability of plans, and the absence of employer contributions, these proposals by themselves may improve options for some, but not others. For example, employer contributions fund a large portion of the nation's health insurance bills. Without replacing those funds, some people may find individual insurance less affordable than their employer-sponsored plan, at least in the short run.20 In addition, risk pooling in the individual 18 Under current law, people buying health insurance through their employers and self-employed individuals are able to exclude premiums for health insurance from taxable income. Others may deduct medical costs but only if they itemize deductions (which most taxpayers do not) and only to the extent that premiums and other unreimbursed medical expenses exceed 7.5% of adjusted gross income. 19 Pollitz, K., Sorian, R. and Thomas, K., How Accessible is Individual Health Insurance for People in Less-Than- Perfect Health? Report for the Kaiser Family Foundation, June 2001, http://www.kff.org/insurance/upload/How- Accessible-is-Individual-Health-Insurance-for-Consumer-in-Less-Than-Perfect-Health-Report.pdf. 20 Over time, employers would likely convert at least some portion of premium contributions to wages. Nonetheless, there would probably be some "leakage," and in the immediate term, not all employers have policies in place to raise wages immediately. In general, such approaches would retain the current sources of coverage. encourage "consumer driven" health plans and health choices. · over a larger group of individuals; and broaden risk pools so that premiums for health insurance products are averaged · affordability; reduce state regulation of health insurance plans, with an objective of increasing · intended to intended to make private health insurance more accessible and affordable. These approaches were A number of bills offered during the 110th Congress included other market improvements .sgnivas egaruocne ot dna secivres htlaeh fo esu suoicsnoc tsoc evorpmi ot dednetni netfo era stnuocca eseht dnapxe ot slasoporP .snalp htlaeh elbitcuded hgih htiw denibmoc era stnuocca eseht semitemoS .ecnarusni eht yb diap ton erac htlaeh yrassecen rof yap ot desu eb nac taht stnuocca sgnivas degatnavda-xat fo ytilibaliava eht dednapxe sah noitalsigel tneceR .stnuocca sgnivas degatnavda-xaT .evoba snoitpo eht htiw ti ecalper dluow yllausu noisulcxe eht dne ot slasoporP .seidisbus ro snoisnapxe ecnarusni htlaeh rehto rof ecruos gnidnuf a edivorp dluoc dna tnacifingis eb dluoc noisulcxe eht gnippac morf desiar seunever xat ,noitidda nI .ecnarusni htlaeh fo sresahcrup gnoma ssensuoicsnoc tsoc erom egaruocne ot eb dluow ycilop a hcus fo esoprup ehT .elbaxat pac eht fo ssecxe ni stnemyap muimerp ekam dluow noisulcxe eht gnippaC .emocni 'slaudividni morf dedulcxe eb yam ecnarusni htlaeh desab-tnemyolpme rof diap tnuoma yna ,wal tnerruc rednU .smuimerp ecnarusni htlaeh rof noisulcxe xat tnerruc eht gnippac ro gnidnE .ecnarusni desahcrup yllaudividni dna desab-reyolpme fo sresahcrup neewteb tnemtaert xat elbarapmoc hsilbatse dluow hcaorppa sihT .desahcrup yllaudividni ro derosnops-reyolpme si ecnarusni ton ro rehtehw ,sreyapxat lla ot elbaliava eb dluow dna noitcuded dradnats eht smialc ro sezimeti reyapxat eht rehtehw elbaliava eb dluow noitcuded ehT .tnuoma dradnats a rof semitemos ,smuimerp ecnarusni htlaeh rof )noitcuded "enil-eht-evoba" na( emocni ssorg detsujda fo noitaluclac eht ni noitcuded a wolla dluow sllib lareveS .stnemyap ecnarusni htlaeh rof noitcuded dednapxE .eud era yeht nehw smuimerp rof tnemyap htiw slaudividni tsissa ot stnemyap esoht fo ssenilemit eht evorpmi yam stiderc elbaecnavdA .stiderc elbaecnavda ro/dna elbadnufer rof edivorp dluow sllib eseht fo tsoM .sesir emocni sa rellams emoceb yllaudarg taht stnuoma htiw ,elpoep emocni-rewol rof stiderc regral rof edivorp dluow emoS .ecnarusni htlaeh fo esahcrup eht rof stiderc xat desoporp sllib fo rebmun A .ecnarusni htlaeh fo esahcrup eht rof seidisbus xaT .rekattihW .M eiluJ dna ekyL boB yb ,noitalsigeL dna waL tnerruC fo weivrevO :sesnepxE dna ecnarusnI htlaeH rof stifeneB xaT ,50533LR tropeR SRC ees ,ecnarusni htlaeh rof stifeneb xat tuoba noitamrofni erom roF .sllib mrofer ecnarusni htlaeh ni desoporp stifeneb xat eht fo emos eht fo snoitpircsed feirb era woleB .sllib eht fo sevitcejbo eht teem pleh ot metsys xat .S.U eht dezilitu evah dluow ssergnoC ht011 eht ni decudortni sllib mrofer htlaeh eht fo ynaM ecnarusnI htlaeH rof slaudividnI ot stifeneB xa .3 xoB txe T T tend to be combined with other reforms addressing some of these issues. economies of scale are high. For these reasons, most bills proposing individual market solutions possibly needier group of uninsured. Finally, the administrative costs in an environment with few market, but those less healthy and arguably most in need of health insurance become a new and employers drop coverage, healthy people could easily find replacement policies in the individual market in many states is limited, and individual underwriting common. This could mean that once States are primarily responsible for regulating the business of insurance. Over the years, states have developed a significant body of law dealing with all aspects of health insurance. State laws and regulations include patient protections, instructions on how insurance carriers may develop the rates charged for their products, and procedures for approval of those rates. They address how entities in the business of selling health insurance fund their enterprises and prepare against the risk of insolvency. Insurance carriers are subject to fair marketing practice laws, requirements related to the filing of grievances against the plans, and appeals processes of plan decisions. States also have benefit requirements that ensure that certain medical services must be available for a product to be sold and marketed as health insurance.21 Proposals to reduce state regulation would move insurance markets closer to an unrestrained free market and would invariably reduce costs for some purchasers of health insurance. (However, they may increase costs for others.) They would also address insurers' complaints about the challenges of selling products across state lines when laws in some states are significantly different from others. Many of the state laws were developed, however, to protect consumers from certain business practices; bills that would preempt those state laws raise concerns about those business practices reemerging. Pooling proposals often focus specifically on small employers. Small employers have a harder time providing insurance to their employees for a number of reasons. Small groups are not able to spread their highest health risks broadly. As a result, premiums for small firms, particularly those with older or less healthy workers (or workers' dependents), are relatively high for similar benefits than for larger employers. Proposals encouraging small employers to join into health purchasing groups (sometimes called health insurance purchasing cooperatives or regional purchasing cooperatives) are meant to pool together those small groups, raising the number of individuals over which premiums are calculated. Bills encouraging professional and trade associations to offer coverage were considered in the 109th and 110th Congresses and were ostensibly about such pooling. In addition, those bills would have provided regulatory relief for insurers selling products through associations. Most of those bills, however, did not require premiums to be calculated across the entire group, and so would not have increased the size of the risk pools. Increasing the size of risk pools is one objective of bills that would establish programs similar to the Federal Employees Health Benefits Program (FEHBP). In general, those bills would identify an existing federal agency or create a new one to negotiate with a limited number of health plans. At least one plan would be available in all areas of the country, and enrollment would be offered either to all small employers or to both small employers and individuals. The coverage would be modeled on the plans offered through the FEHBP. In general, the bills would require that premiums for plans offered through the program would be averaged across all of the enrollees for each plan--the largest possible risk pool.22 In addition, those bills usually include significant subsidies for low-income employees or individuals and sometimes for employers as well. Spreading risk broadly, however, is not a panacea. Community-rating (setting the level of premiums based on the average expenses of all subscribers in an area could result in increased 21 See also CRS Report RS22476, Standardizing State Health Insurance Regulation, by Bernadette Fernandez and Jean Hearne. 22 For a discussion of that debate see CRS Report RL31963, Association Sponsored Health Plans: Legislation in the 109th Congress, by Jean Hearne. prices for young healthy people with low health risk and lower prices for those who are older or have health problems. If the goal of such approaches is to increase insurance coverage among those who need it most, this trade-off may be acceptable. If, however, the healthier and younger groups find their rates excessive, they may drop coverage altogether (where enrollment is voluntary), making the pool increasingly costly and undermining the objective of spreading risk. Only one state has "pure community rating," where no individual-market premiums can vary by any individual factor, even age. More than 15 other states have taken other steps, such as rate banding or adjusted/modified community rating (generally using at least age as a rating factor), that effectively pool some risk.23 Federal policies in this area might take into account the unique state markets that have developed in response to state laws to ensure that federal policies do not undermine improvements that states have already made.24 "Consumer driven" reforms are those that seek to encourage more choices for individuals in terms of the cost and coverage, and to raise cost consciousness, encouraging a preference for low- cost plans and better decision making about health care use. Ultimately, these reforms are intended to reduce overall premium growth. For example, proposals to create tax preferences for high deductible health plans combined with health savings accounts are intended to encourage price reductions in coverage through several mechanisms: high deductible health insurance plans offer limited coverage relative to what may be covered by more typical comprehensive products, and health savings accounts encourage people to think more before seeking care for which money must be drawn from their savings account. As in the early 1990s, state experimentation with health insurance reform is generating interest and discussion at the federal level. A number of states are experimenting with comprehensive insurance reforms toward a primary objective of achieving universal or near universal coverage (see Text Box 4). Some of these reforms may serve as a blueprint for federal changes, providing demonstrations that can better inform a federal debate. Many legislators, however, would rather have states continue to undertake reforms to address coverage gaps for their citizens. As a result, a number of bills have been introduced to provide grant funds for states to continue and expand health insurance reforms on their own. 23 "Individual Market Rate Restrictions, 2007," Kaiser Family Foundation's statehealthfacts.org, http://www.statehealthfacts.org/comparetable.jsp?ind=354&cat=7. 24 Herring, B., Pauly M., The Effect of State Community Rating Regulations On Premiums and Coverage in the Individual Health Insurance Market, NBER Working Paper Series 12504, http://www.nber.org/papers/w12504. Pauly, M., Herring, B., Pooling Health Insurance Risks, AEI Press, 1999. budgets. 28 In such times, states and their advocates are quick to note that all but one state (Vermont) must annually balance their Monthly, July/August 2007, p. 26. 27 Klein, E., "Over State: Why the Laboratories of Democracy Can't Achieve Universal Health Care," the Washington Laws, by Jon O. Shimabukuro and Jennifer Staman. 26 CRS Report RL34637, Legal Issues Relating to State Health Care Regulation: ERISA Preemption and Fair Share Alliance for Health Reform Toolkit, August 2007. Health Policy, November 2006 and Employee Retirement Income Security Act (ERISA) and State Health Reform, An of the Maryland "Fair Share Act" Court Decision, prepared for AcademyHealth and the National Academy for State on ERISA and the legal landscape, see Butler, P., ERISA Implications for State Health Care Access Initiatives: Impact 25 Although exactly how much of an impediment ERISA creates is in flux as legal challenges are considered. For more necessary. states' ability to fund such needs.28 Finally, to ensure equity across states, federal reforms may be including health insurance, rises often at the same time that states' tax base erodes, reducing states' tax collections. During challenging economic times, a need for state assistance of all kinds, the reforms.27 States' ability to pay for reforms can be subject to the peaks and valleys of the record includes a number of failed initiatives--often related to inability to fund the rising costs of states' ability to require employers to offer or pay for health insurance.26 Further, states' track employer benefits, such as health insurance.25 For example, ERISA has generally pre-empted Income Security Act of 1974 (ERISA) impedes states from passing certain laws that affect State based reforms, however, face several significant obstacles. The Employee Retirement markets and economic conditions. the close relationship between private health insurance and local health care providers, labor homogenous states. Access to health insurance and health care can be very localized, reflecting Some maintain that state-led reform can better reflect local needs, particularly in smaller or more .margorp eht dnuf ot eunitnoc ot woh ediced ot evah lliw erutalsigel eht ;wal eht denrutrevo sretov eniaM ,8002 rebmevoN nI .snoisivorp rehto sulp ,ados dna eniw ,reeb no xat a morf seunever esiar ot dessap saw wal wen a os ,snoitatcepxe fo trohs nellaf evah margorp eht rof seuneveR .slaudividni rehto dna ,deyolpme-fles eht ,seeyolpme 05 naht ssel htiw sessenisub eniaM ot ecnarusni htlaeh dezidisbus sreffo margorp eciohCogiriD s'eniaM .sraey gninevretni eht ni gnidnuf fo kcal rof delaeper ro kcab dellup neeb evah hcihw fo ynam ,tsap eht ni smrofer rojam detcane evah ,nogerO dna ,eessenneT ,iiawaH ,notgnihsaW gnidulcni ,setats rehtO .slasoporp egarevoc htlaeh gnipoleved era setats rehto fo rebmun A .semocni gniyfilauq htiw slaudividni rof seidisbus muimerp sedivorp osla etats ehT .tneve gniyfilauq a dah evah ohw ro raey a revo derusninu neeb evah ohw elpoep rof )PVM yb dna dleihS eulB ssorC eulB yb dlos( tcudorp ecnarusni htlaeh a ,htlaeH tnuomataC dehsilbatse etats ehT .erac htlaeh fo ytilauq evorpmi dna ,ssecca esaercni ,tsoc niatnoc ot dengised sevitaitini 53 revo dedulcni smrofer s'tnomreV ).8002 ,1 .tcO ,ebolG notsoB ",ecnarusni erachtlaeh rof b6.01$ steg .ssaM" ,elpmaxe rof ,eeS( .dednetxe neeb yltnerappa sah lawener sti tub ,nrecnoc a neeb sah gnidnuf diacideM laredef eht fo noitaunitnoc ehT .diacideM morf gnimoc sdnuf esoht fo flah revo htiw ,secruos fo rebmun a hguorht smrofer eht decnanif sttesuhcassaM .ecnarusni etavirp rof sdradnats tifeneb muminim ediwetats dna ,smrofer tekram ecnarusni ,snoisnapxe diacideM ,)derusninu eht rof seidisbus sdrawot tnemssessa na yap ecnarusni htlaeh edivorp ton od taht sreyolpme nierehw( stnemeriuqer "yalp ro yap" reyolpme ,seidisbus detaler-emocni ,ecnarusni htlaeh niatbo ot emocni tneiciffus htiw snezitic eriuqer taht setadnam laudividni :smrofer gniwollof eht detnemelpmi sah ,elpmaxe rof ,sttesuhcassaM .snoitaluger tekram gnitirwer dna ,stnemeriuqer "yalp ro yap" reyolpme ,setadnam laudividni sa sloot hcus gnizilitu ,snoitroporp cirotsih fo smrofer ecnarusni htlaeh gnitcane era setats fo rebmun A smrofeR ecnarusnI htlaeH etatS .4 xoB txeT ¢ ¡ A large number of introduced bills include provisions incorporating combinations of the approaches discussed above. Proponents of such proposals tend to rely on existing sources of private insurance in combination with expanding public programs to extend coverage among the uninsured. They reflect a view that no single approach (except for what some maintain is politically unlikely national health insurance) with its inherent strengths and weaknesses will be sufficient to get to all Americans insured. Bills advocating multiple approaches often include market improvements to extend the availability of plans and subsidies to help low-income populations pay for their health coverage. Some of these bills were new to the 110th Congress, while others had been reintroduced from earlier Congresses. The newest of the bills advocating multi-system reforms tended to include provisions to improve quality of care, better manage chronic diseases, and encourage healthier living. While there may be a small number of introduced bills in this category, it is a favored approach among many in the policy community. Proposals offered by America's Health Insurance Plans (AHIP, [www.americanhealthsolution.org]) and The Health Coverage Coalition for the Uninsured (http://www.coalitionfortheuninsured.org/amuninsured/amuninsured.html), which includes groups such as AARP, Blue Cross Blue Shield Association, and the American Hospital Association, among many others, advocate such multidimensional approaches. Brief summaries of the major provisions of health insurance reform bills introduced in the 110th Congress are provided below. The bills are loosely classified into the following reform approaches, similar to the discussion above · Largely replace existing coverage with a national health insurance program (or a national health service). · Expand privately sponsored coverage. · Provide grants to states to encourage state-based reforms. · Simultaneously expand private and public coverage options. As discussed previously, there were many bills in the 110th Congress to expand public health insurance programs for certain targeted groups of individuals--for example, to allow non- disabled individuals between ages 55 and 64 to enroll in Medicare. None of these narrow scope bills are summarized in the list that follows. Similarly, bills affecting private health insurance that only targeted certain individuals or narrow issues--for example, to prohibit pre-existing condition exclusions for children or to restrict private plans' ability to use lifetime limits--are also excluded from the list that follows. The National Health Insurance Act was introduced in January 2007 by Representative John Dingell. The bill would require that medical services, hospital services, and other personal health services be made available to all eligible individuals, including U.S. wage earners and their dependents who are not eligible for Medicare. States and local administrative committees or officers would administer the health benefits. It would establish a National Health Insurance Board in the Department of Health and Human Services and a National Advisory Medical Policy Council. The Board would be required to (1) determine the amount of funds required for the provision of the benefits and (2) determine allotment amounts to states for services. The bill would establish a National Health Care Trust Fund, into which proceeds from a value added tax of 5% on each sale of property, performance of services, and importation of property for commercial purposes, with exceptions, would be deposited for the purpose of funding the provisions of the Act. The United States National Health Insurance Act, introduced by Representative John Conyers in January 2007, would establish the United States National Health Insurance (USNHI) Program to provide all individuals residing in the United States and territories with all medically necessary health care at no cost. Care would be provided by public or not for profit institutional providers, HMOs, and participating physicians. It would prohibit health insurers from selling coverage duplicative of USNHI benefits; however, they could sell coverage for services not considered to be medically necessary. The bill would establish a USNHI Trust Fund to finance the program with amounts deposited (1) from existing sources of government revenues for health care, (2) by increasing personal income taxes on the top 5% income earners, (3) by instituting a progressive tax on payroll and self-employment income, and (4) by instituting a small tax on stock and bond transactions. The bill would establish a National Board of Universal Quality and Access to provide advice on quality, access, and affordability. The American Health Security Act of 2007 was introduced by Representative Jim McDermott in February 2007. The bill would require each participating state to establish an American Health Security Program to provide every U.S. citizen, national, or lawful resident alien with health care services. It would eliminate Medicare, Medicaid, SCHIP, the Federal Employees Health Benefits Program, and the Civilian Health and Medical Program of the Uniformed Services. It would require each state to prohibit the sale of health insurance in that state that duplicates benefits provided under the program. It would establish a benefits standards board to (1) develop policies, procedures, guidelines, and requirements to carry out the Act; (2) establish reporting standards; (3) create several advisory councils; and (4) establish a budget for covered health care services. Finally, it would create the American Health Security Trust Fund and appropriate to the Fund specified tax liabilities and current health program receipts. The AmeriCare Health Care Act of 2007 was introduced by Representative Pete Stark in March 2007. The bill would establish a new health insurance program called AmeriCare and establish an individual entitlement to its benefits for all U.S. residents. It specifies the benefit packages to be offered as well as allowable cost sharing. Benefits under AmeriCare would be (1) the same as the benefits provided under Medicare Parts A and B or (2) equivalent to the coverage in any of the four largest health plans offered under the Federal Employees Health Benefits Program. Financing for the program would come from individual premiums, employer contributions, state maintenance of effort payments, and general revenue funds. The Medicare for All Act was introduced by Representative John Dingell in the House of Representatives and Senator Ted Kennedy in the Senate in April 2007. The bill would amend the Social Security Act to establish a new health insurance program, Medicare for All. The program would offer a choice of plans to eligible individuals, provided such individuals are not eligible for Medicare. Persons eligible for this program would include all citizens and persons with lawful status. The act specifies that the benefit packages to be offered would be (1) a comprehensive set of benefits that include (but would not be limited to) the full range of benefits under Medicare fee-for-service or (2) equivalent to the coverage in any of the four largest health plans offered under the FEHBP. The act also specifies the cost-sharing to be imposed under this new program, including reduced cost-sharing for low-income persons. The program would be financed through new taxes on workers and employers, and would be administered by the federal government. The Josephine Butler United States Health Service Act was introduced by Representative Barbara Lee in July 2007. The bill would establish the United States Health Service (USHS), through which all individuals while within the United States would be eligible to receive health care and supplemental services. All health care services would be provided at federal health care facilities. Such facilities would be established by the USHS in such number and location as to ensure that every resident receives equitable access to needed health care resources funded by the federal government. Benefits provided would include health promotion; prevention; diagnosis and treatment of illness and injury; rehabilitation and therapy; drugs and therapeutics, and ambulance and other transportation; child care; homemaking and home health; and counseling and social service assistance. All current law health provisions would be repealed. A health service tax would be imposed on each individual, estate, trust, and corporation. All other health-related tax deductions and exclusions would be ended. The Health Service Trust Fund is created into which current Medicare trust fund amounts would be transferred along with health service tax receipts. ¡ ¢ The Health Care Tax Deduction Act of 2007 was introduced by Representative Cliff Stearns in January 2007. The bill would establish a standard tax deduction from gross income for health insurance premiums and unreimbursed prescription drug expenses paid for the benefit of the taxpayer, the taxpayer's spouse, and dependents. The Small Business Health Fairness Act of 2007, introduced by Representative Sam Johnson in January 2007, would provide for the establishment and governance of association health plans (AHPs)--group health plans whose sponsors are trade, industry, professional, chambers of commerce, or similar business associations, and which meet certain certification requirements. AHP plans would be exempt from certain state regulations. The bill would establish an Association Health Plan Fund to make payments to maintain coverage for plans that become insolvent and would establish a Solvency Standards Working Group. The bill would preempt any state law that precludes a health insurance issuer from (1) offering health insurance coverage in connection with a certified AHP or (2) offering health insurance coverage of the same policy type to other employers operating in the state that are eligible for coverage under such AHPs, whether or not such other employers are participating employers in such a plan. (Similar AHP provisions are included in H.R. 324, a minimum wage bill, and H.R. 1012 which provides for tax changes for small businesses.) Tax Equity and Affordability Act of 2007 was introduced by Senator Mel Martinez in the Senate in January 2007 and in the House by Representative Paul Ryan in February 2007. The bill would amend the Internal Revenue Code (IRC) to (1) allow individual taxpayers a refundable tax credit for health insurance costs paid for the benefit of the taxpayer, the taxpayer's spouse, and dependents; (2) require business taxpayers who receive payments for certain employee health insurance coverage to file informational returns; (3) direct the Secretary of the Treasury to make advance payments of health insurance tax credit amounts to health insurance providers; and (4) limit the tax exclusion for employer-provided health care coverage. The Keeping Small Businesses Healthy Act of 2007, introduced by Representative Darlene Hooley, would amend the IRC to allow certain small business employers with 100 or fewer employees a refundable tax credit for up to 60% of the health insurance costs paid for their employees. The tax credit would be calculated on a sliding scale. The smallest businesses would receive credits that cover a greater percentage of cost. The Small Business Health Plans Act of 2007 was introduced by Representative Thomas Allen in May 2007. The bill would direct the Secretaries of Health and Human Services (HHS) and Labor to provide for a national health pooling arrangement for eligible small employers modeled after FEHBP, through which they could offer health insurance coverage to employees and their dependents. The bill outlines program elements and coverage requirements. The bill would require the HHS Secretary to (1) establish a program of premium assistance for small employers that provides a sliding scale of assistance based on the number of employees, the average wage, and the employer profit margin; (2) provide for reinsurance coverage for an individual's claims that exceed a specified amount for a year; and (3) provide grants to states for the establishment, initial administration, and operation of pooling arrangements. The Health Insurance Affordability Act of 2007, introduced by Representative Steve King in May 2007, would amend the IRC to allow a deduction from gross income for premiums paid for a high deductible health plan. The deduction would not be allowed for those premiums that are excluded from income under the existing exclusion for employer sponsored health insurance premiums. The Comprehensive Health Coverage And Reform Enhancement Act of 2007, introduced by Representative Tom Price in June 2007, would amend the IRC to allow an advanceable tax credit and a deduction for qualified health insurance. It would impose a tax penalty on employers who do not make premium contributions to individually sponsored health plans in lieu of the employer's group health coverage. The bill would change federal employees' contribution requirement so that the government contribution amount would not change based on the chosen health benefits plan. The bill would treat health care professionals negotiating with health plans as collective bargaining units for purposes of antitrust laws. The bill would regulate health care lawsuits and dispute resolution, and would deem hospitals, emergency departments, physicians, and physicians groups that provide emergency care to be employees of the Public Health Service for purposes of any civil action that may arise due to items and services furnished. It would also simplify applicable state health insurance laws and would allow medical care providers to immediately deduct the cost of health care information technology and permit a business tax credit for certain telecommunication charges. It would allow certain physicians a bad debt tax deduction for their costs in providing uncompensated care to emergency room patients. It would also require the Secretary to establish a Technical Advisory Group to review issues related to HIPAA. The Health Care Relief Act of 2007, introduced by Representative Leonard Boswell in June 2007, would amend the IRC to allow (1) a refundable tax credit of up to $1,000 for the health insurance coverage costs of a previously uninsured taxpayer, the taxpayer's spouse, and dependents; and (2) certain small employers a business tax credit for amounts paid under a new health plan for employee health insurance coverage. The Health Insurance Tax Relief Act of 2007 was introduced by Representative John McHugh in September 2007. The bill would amend the IRC to (1) allow individual taxpayers a refundable and advanceable tax credit for payments for qualifying health insurance and (2) require business taxpayers who receive payments for certain employee health insurance coverage to file informational returns. The Affordable Health Care for Americans Act of 2007 was also introduced by Representative John McHugh in September 2007. The bill would amend the IRC to allow a tax deduction from gross income for the health insurance costs of an individual taxpayer, the taxpayer's spouse, and dependents (available whether or not a taxpayer itemizes deductions). The Health Insurance Affordability Act of 2007, introduced by Representative Steve Chabot in October 2007, would amend the IRC to allow individual taxpayers a tax deduction for health insurance costs. The American Health Benefits Program Act of 2008, introduced by Representative Langevin in February 2008, would establish the American Health Benefits Program based on FEHBP. A limited number of health insurance plans, modeled after those offered to federal employees, would be made available to all individuals who are not eligible for qualifying employer- sponsored insurance. The government would pay about 72% of the cost of the plans, and sliding scale subsidies would be available to those with low-income for remaining cost-sharing amounts. The bill would make other tax policy changes and would institute an individual mandate to obtain coverage. The Affordable Health Care Expansion Act of 2008 was introduced by Representative Kay Granger in April 2008. The bill would amend the IRC to provide individual taxpayers with a refundable and advanceable tax credit for health insurance costs paid for the benefit of the taxpayer, the taxpayer's spouse, and dependents and would require business taxpayers who receive payments for certain employee health insurance coverage to file informational returns. The Patients' Health Care Reform Act was introduced in April 2008 by Representative John Shadegg. The bill would amend the Internal Revenue Code of 1986 to allow individuals a refundable and advanceable credit for health insurance costs, to allow employees who elect not to participate in employer subsidized health plans an exclusion from gross income for employer payments in lieu of such participation, and for other purposes. The Making Health Care More Affordable Act of 2008 was introduced in May 2008 by Representative Timothy Walberg and Senator Roger Wicker. The bill would provide a tax credit for the purchase of coverage. It also permits the establishment of AHPs that would be exempt from certain state insurance regulations but subject to new ERISA provisions. The bill also includes provisions allowing a health insurer to designate a primary state; the insurance laws applicable to the individual market for insurance in that primary state would apply to individual policies sold by that insurer in that state as well as in other states, which the laws of those other states preempted. It would also increase the tax deduction for contributions to HSAs and would allow a new tax deduction for high deductible health plan premiums. The Roadmap for America's Future Act of 2008 was introduced by Representative Paul Ryan in May 2008. The bill would eliminate the current exclusion from individuals' income of employers' contribution to health insurance, replacing it with a refundable tax credit for qualified coverage. It would allow a health insurer to designate a primary state; the insurance laws applicable to the individual market for insurance in that primary state would apply to individual policies sold by that insurer in that state as well as in other states, which the laws of those other states preempted. It would establish regulatory relief from state insurance regulation for plans offered through trade and professional associations. The bill also revises Medicaid to require states to elect either a block grant for acute care services or implement a refundable tax credit for the Medicaid population for such services; under Medicaid it also phases out disproportionate share hospital (DSH) payments and establishes a block grant to states for long-term care services. The bill would abolish SCHIP and amend Medicare to make an income-related reduction in the Part D prescription-drug premium subsidy. The Small Business Health Options Program Act of 2008, or the SHOP Act, was introduced by Representative Ron Kind in June 2008. The bill would require the HHS Secretary to establish a nationwide health insurance purchasing pool for small businesses and the self-employed that would offer a choice of private health plans. It also provides a tax credit for small employers. The Small Business Cooperative for Healthcare Options to Improve Coverage for Employees (CHOICE) Act of 2008, or the Small Business CHOICE Act of 2008, was introduced by Representative Nydia Velazquez in July 2008. The bill would provide for the establishment and governance of Small Business Health Insurance Cooperatives, which are insurance companies chartered in a qualified state by small businesses to provide reinsurance for enrolled individuals whose paid claims exceed a certain amount (between $10,000 and $250,000). The bill directs the Secretary of the Treasury to establish an independent commission to promote the development of such cooperatives, make recommendations to the Secretary regarding minimum capital requirements, and conduct oversight of such cooperatives. The bill would exempt such cooperatives from certain state laws and regulations. It would also establish the small business CHOICE tax credit for small employers for costs related to providing qualified employer- subsidized health coverage for employees and their families, disallowing the credit unless the employer offers a qualified wellness program. The Health Security for All Americans Act of 2008 was introduced by Tom Latham in July 2008. The bill would provide for federally regulated health insurance for associations of small employers and for alternative market pooling organizations primarily for individuals. It also requires the Secretary to promulgate regulations establishing health insurance rating rules for the small-group market. The bill also would provide a tax deduction for the qualified health insurance costs of individuals. The Small Business Health Care Tax Credit Act was introduced by Senator John Kerry in January 2007. The bill would provide a partially refundable tax credit to small businesses (less than 50 employees) based on a percentage of the employer's cost of providing qualified health benefits to employees and dependents. The tax credit would be calculated on a sliding scale basis, with the smallest businesses receiving credits that would cover a greater percentage of costs. Promoting Health Care Purchasing Cooperatives Act was introduced by Senator Russell Feingold in March 2007. It would authorize the Secretary of HHS, acting through the Director of the Agency for Healthcare Research and Quality (AHRQ), to award grants for the development of health care purchasing cooperatives of two or more self-insured employers. It would set requirements for cooperatives, including that they (1) be nonprofit, wholly owned, and democratically governed by its member-employers; (2) exist solely to serve the membership base; (3) assist members in pooling their health care insurance purchasing power; (4) provide data to improve the ability of the members to make data-based decisions regarding their health plans; and (5) conduct activities to enhance quality improvement in the health care community. The bill would also require the Secretary to carry out an identical grant program for eligible groups of two or more employers that have 99 employees or less and purchase health insurance for their employees. The Universal Health Care Choice and Access Act, introduced by Senator Tom Coburn in March 2007, would amend the IRC to (1) allow participants in high deductible health plans an increased tax deduction for contributions to a health savings account and (2) allow individual taxpayers a refundable tax credit for health insurance premiums paid. It would require states to establish and operate a qualified high-risk pool or a state-designated alternative that ensures access to private health insurance for medically uninsurable individuals. The bill also includes provisions allowing a health insurer to designate a primary state; the insurance laws applicable to the individual market for insurance in that primary state would apply to individual policies sold by that insurer in that state as well as in other states, which the laws of those other states preempted. The bill would also provide for health promotion and disease prevention activities, including requiring the HHS Secretary to convene an interagency coordinating committee to develop a national strategic plan for preventive care. The Ten Steps to Transform Health Care in America Act was introduced by Senator Michael Enzi in July 2007. The bill would require all adults with dependent children to obtain qualified health insurance coverage for those children and would establish an advanceable and refundable health insurance tax credit for the purchase of health insurance. It would merge the small group and individual markets for insurance and includes provisions intended to simplify insurance standards for health plans, to improve quality of health care and to facilitate the adoption of health information technology. The bill would provide for grants for demonstration projects encouraging residential or community based settings of integrated skilled nursing care and for states to develop alternatives to tort litigation for resolving disputes over injuries caused by health care providers. The Healthy Tax Reform Act was introduced in July 2007 by Senator Jim DeMint. The bill would establish an advanceable and refundable health insurance tax credit for the purchase of qualified health insurance, limit the availability of certain tax preferences for individuals eligible for the health insurance tax credit, and repeal the alternative minimum tax. In order to be eligible for the credit, a taxpayer must be purchasing coverage in a state that has been deemed by the Secretary of HHS to be making efforts to provide its citizens with greater access to affordable private health insurance, including by establishing a state health insurance exchange as well as a high-risk pool, a reinsurance mechanism, or some other approach for dealing with those with high risks. The bill sets requirements for state health insurance exchanges and would amend Medicaid to allow for the offering of health opportunity accounts in all states. The Every American Insured Health Act was introduced by Senator Richard Burr in July 2007. The bill would provide every American with a refundable, advanceable flat tax credit of $2,160 per individual and $5,400 per family. It would encourage the establishment of statewide insurance pools to reduce costs and help high-risk individuals access affordable coverage and would expand the availability of health opportunity accounts under the Medicaid program. The Universal Health Coverage Act of 2007, introduced by Senator Ben Cardin in July 2007, would require all Americans to enroll in a qualified health care plan. The bill would require the Secretary of HHS, in consultation with the National Association of Insurance Commissioners, to develop at least three types of low-cost health insurance plans for each State and the District of Columbia to make available, on a guaranteed-issue basis, to all individuals with incomes below 400% of the federal poverty line. Those who fail to enroll for any coverage for a continuous period greater than 60 days would be required to pay a tax equal to the average monthly premium amount for qualified coverage as defined by the state in which they reside. Funds collected by this tax would then be used to automatically enroll them in a state-approved plan. The Small Business Health Options Program Act of 2008 (SHOP Act) was introduced by Senators Durbin, Coleman, Snowe, and Lincoln in the Senate and by Representative Barrow in the House of Representatives in April 2008. The purpose of the bill is to expand health insurance access and reduce costs through the establishment of a national health insurance purchasing group, the implementation of nationwide adjusted community rating standards, and financial assistance through tax credits for small employers that choose to sponsor health insurance plans in states that enact (or already have in place) adjusted community rating. The national health insurance purchasing group--called the SHOP program--would guarantee access to health insurance for all small employers and self-employed individuals. In addition, plans sold through the SHOP program would be priced based on adjusted community rating principles, wherein workers' individual or collective health status cannot be used to set the price for a small employer's group. The bill's adjusted community rating provisions are envisioned as reducing variation in premiums (in states that do not already require community or adjusted community rating) so that instead of individuals paying premiums based on their individual health risks, the costs of those at greatest risk of needing costly medical care are spread among all of a plan's purchasers. Other employer cost reductions would be achieved by providing tax credits to small employers who share in the cost of the premiums for their employees. The Small Business Health Plans Act of 2008 was introduced by Senators Enzi, Ben Nelson, and Gregg in April 2008. The bill's main provisions would establish regulatory relief from state insurance regulation for plans offered through trade and professional associations and establish a framework of incentives to encourage states to adopt a single, federally described set of insurance laws and regulations. The bill envisions that reducing state regulation of certain health insurance plans and reducing the variation in regulation of all other plans would result in lower-cost offerings and more choices for sponsors of health insurance in the small group market. Those regulatory reforms would move states that have already established community rating or adjusted community rating principles toward greater individual underwriting. Under such practices, younger, healthier, or low-risk individuals may find their health insurance costs declining relative to older or higher-risk individuals, who will have to bear a greater share of their own projected expected health costs. A bill to amend the IRC to allow the purchase of health insurance with pre-tax dollars, and for other purposes, was introduced by Senator Jim DeMint in April 2008. The bill would amend the IRC to allow (1) taxpayers who do not itemize their deductions to deduct from gross income the costs of health insurance and long-term care insurance, and (2) payments from health savings accounts for individual-market high-deductible health plan premiums. The Small Business Empowerment Act was introduced by Senator Sherrod Brown in April 2008. It would establish a national health insurance purchasing pool modeled on FEHBP through which self-employed and uninsured workers in small firms could purchase coverage. The program would be administered by a private entity under a contract with HHS. Plans sold through the pool would be rated based only on a purchaser's age. The bill would also authorize a pilot project and an assessment of the pilot under which carriers offer a model health benefits plan, the specifications of which would be developed by a National Health Coverage Commission. The bill would also authorize the Secretary to establish a reinsurance program for carriers offering health benefits through the pool and a public education campaign. The Affordable Coverage for Small Employers Act of 2008 was introduced by Senator Gordon Smith in September 2008. The bill would create a National Health Coverage Policy Board that would divide the country into regions over which separate boards would be established to oversee private health insurance exchanges and the rules under which they would operate (e.g., establishing standard benefit packages, rating rules). Sliding-scale tax credits would be provided to lower-income employees of small businesses and to other individuals purchasing coverage through an exchange. Tax credits would also be provided to small businesses for their contributions toward the cost of coverage. The Health Partnership Through Creative Federalism Act, introduced by Rep Tammy Baldwin in January 2007, would require the Secretary of HHS to do the following: establish a State Health Coverage Innovation Commission to oversee and review proposals submitted by states (or other government entities) to expand and improve health care and health programs; submit to Congress a list of state applications that the Commission recommends for approval; report to the public concerning progress made by states; and make recommendations. Plans may include other goals, such as improvements in quality, efficiency, cost-effectiveness, and the appropriate use of information technology. The Secretary would provide grants to those states with approved applications. The bill requires the commission and Secretary to fund a balanced diversity of approaches and link allocations to goals and performance measures. It authorizes an appropriation of such sums as are necessary. The States' Right To Innovate in Health Care Act of 2007 was introduced by Representative John Tierney in the House of Representatives and Senator Bernard Sanders in the Senate in September 2007. The bill would authorize planning and demonstration grants for states to develop cost- effective delivery systems of universal, comprehensive health care with simplified administration. It would direct the Secretary of HHS to establish a commission to review applications. State plans would be required to provide for coverage of all state residents with health benefits that are at least actuarially equivalent to the standard Blue Cross/Blue Shield preferred provider option service benefit plan under FEHBP. The Health Partnership Act was introduced by Sen. Jeff Bingaman in January 2007. The bill would make grants available to states to carry out health care expansion and improvement programs. It would establish a State Health Innovation Commission, which would do the following: provide states with reform options; establish minimum performance measures and goals with respect to coverage, quality, and cost of such programs; review state applications; and submit to Congress a list of state applications that the commission recommends for approval. The bill sets forth rules for congressional consideration of such proposals and establishes that priority would be given to those programs that the commission determines have the greatest opportunity to succeed in expanding health insurance coverage. It authorizes an appropriation of such funds as necessary. ¢ ¡ The Health Coverage, Affordability, Responsibility, and Equity Act of 2007 was introduced by Representative Marcy Kaptur in May 2007. The bill would encourage the use of demonstration waivers by states to implement policies that make comprehensive, affordable health coverage available for all state residents. Coverage would emphasize the use of preventive services, care coordination, and health information technology. If states choose to undertake such waivers, they would be eligible to receive the grants funds and federal tax expenditures that would otherwise be available under other provisions of this bill. If states do not undertake such waivers, then the bill would extend Medicaid to allow for the coverage of all individuals with incomes below 100% of the poverty line and amend SCHIP to provide additional funds for states that extend coverage to all targeted low-income children. The bill would also provide for an advanceable, refundable tax credit for the cost of qualified health insurance, establish an FEHBP-like purchasing pool for individuals and small groups to obtain coverage, create standards for state-based reinsurance programs, and make grants available to states toward the costs of such programs. The Healthy Americans Act was introduced by Representative Brian Baird in September 2007. Its provisions are almost identical to those of S. 334 (described below) except instead of replacing the existing tax exclusion for payments for employer-provided health insurance with a standard deduction for premiums for all taxpayers, it would replace the exclusion with a refundable tax credit. America's Affordable Health Care Act of 2008 was introduced by Representative Jeff Fortenberry in June 2008. The bill would permit the HHS Secretary to create three health insurance coverage policies that could be available in the individual market in any state and would be subject to specified federal requirements and without regard to state benefit requirements. In addition, the bill would provide funding for the creation and expansion of state high-risk pools. The Several Approaches to Reduce the Uninsured Act of 2008 was introduced by Representative Robert Andrews in September 2008. The bill would amend ERISA to permit states to regulate the health plans of employers with 100 or more workers that might otherwise be exempt from state laws and regulations if the state enacted a comprehensive health program that also required residents to be insured with adequate coverage. It also amends ERISA to permit states to enact requirements that employers contribute certain amounts toward the health insurance they offer. The legislation permits states and small employers to have buy-in arrangements so that they can both make contributions to the insurance they may obtain for individuals. It creates a federal commission to review applications from states to do comprehensive health care reform, with recommendations for funding provided to the Congress for its expedited consideration to provide funding through 2013, subject to federal budget neutrality. The Access to Affordable Health Care Act was introduced by Senator Susan Collins in January 2007. The bill would amend the IRC to provide (1) tax credits to small businesses for qualified employee health insurance expenses, (2) tax credits for individuals and families for qualified health insurance, (3) deductions for long-term care insurance premiums, and (4) tax credits for individuals with long-term care needs. It would require the Secretary of Labor to award grants to states to assist in planning, developing, and operating qualified small employer purchasing groups for health insurance. It would direct the Small Business Administration to award grants to states, local governments, and nonprofit organizations to provide health insurance information to small employers and require the Secretary to award demonstration grants for states on the effectiveness of innovative ways to increase access to health insurance. The bill would amend the SCHIP program to provide additional allotments to eliminate funding shortfalls and to allow states to extend coverage to qualified children, parents, and pregnant women. It would provide for improved outreach and enrollment in government programs for eligible children and homeless individuals and families and express the sense of the Senate that appropriations for consolidated health centers and the National Health Service Corps should be doubled over the next five fiscal years. The bill would require the Secretary of HHS to (1) award grants to states for the promotion of healthy lifestyles and for the establishment and operation of worksite wellness programs for small employers and their employees, (2) expand comprehensive school health education programs, and (3) establish demonstration projects related to providing low-cost, high-quality health care and attracting educators and clinical practitioners to underserved areas. S. 334 The Healthy Americans Act was introduced by Senator Ron Wyden in January 2007. The major provisions of the bill would mandate that all individuals (with some exceptions) have health coverage. Individuals would have the opportunity to enroll in one of the private health plans ("Healthy Americans Private Insurance Plans") administered by regional insurance entities ("State Health Help Agencies"). HAPI plans would be comprehensive and include prevention and disease management programs. Full subsidies would be made available for individuals and families with income below poverty, and partial subsidies for other low income individuals. The program would be financed by individual and employer payments, reductions in Medicare and Medicaid spending, and other general Treasury funds. The existing tax exclusion for payments for employer-provided health insurance would end and a standard deduction would be established for premiums for all taxpayers. Chris L. Peterson Specialist in Health Care Financing cpeterson@crs.loc.gov, 7-4681 This report is largely based upon the previous work of Jean Hearne. For this version, research assistance was provided by Angela Napili. ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL34389