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Comparison of the ACA and the Republican Common Sense Healthcare Reform Act

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Comparison of the ACA and the Republican Common Sense Healthcare Reform Act

health care reform debate


Debate is sure to be lively, and hopefully somewhat congenial, as the House Republicans bring a vote to the floor Wednesday, Jan. 19th, to repeal and replace the Affordable Care Act which was signed into law by President Obama on March 22, 2010.

No doubt you've heard the Republicans want to repeal the new health care legislation. But, do you know the details of the GOP's CSHRA Act? Well, here's your chance to see a side-by-side comparison. Probably for the first time ever.

There is no agenda here. This is a straight-up comparison of the two healthcare bills as best as I can using Congressional Budget Office estimates.

Eligibility Provisions: Affordable Care Act

  • Establishes an individual mandate whereby all Americans are required to obtain coverage through their employer, or if that is unavailable, on their own. If they choose not to obtain coverage a fine or penalty will be imposed. Individuals who cannot afford coverage are exempted from the penalty.
  • Eliminates pre-exisitng conditions for children effective September, 2010 and for adults effective January, 2014. Guarantee issue and renewability under HIPAA is expanded to include all plans in the individual and small group markets and in the Health Insurance Exchanges. Includes rating restrictions for age, family size, and geography on a 3:1 premium rating ratio and for tobacco use on a 1.5:1 premium rating ratio.
  • Provides dependent coverage for children up to age 26 for all individual and group policies. This was effective September, 2010.
  • Creates state-based Health Insurance Exchanges through which individuals can compare available health plans in the individual market with uniform rates and benefit packages.
  • The Congressional Budget Office has stated that the ACA expands coverage to about 32 million of the roughly 50 million uninsured Americans.

Eligibility: Common Sense Healthcare Reform Act Provisions

  • The CSHRA requires states to establish a functioning risk pool or reinsurance program ensuring every american has access to "affordable health care, regardless of health status." States will be required to eliminate high risk pool waiting lines qnd enrollee premiums would be limited to 150% of the average premium charged in a State.
  • Extends existing HIPAA guaranteed availability protections for persons with pre-existing conditions regardless of source of previous health insurance coverage. Allows protections while eliminating requirement to exhaust COBRA coverage.
  • Extension of dependent coverage to age 25. If a health insurance plan offers coverage to dependents, then the plan must cover them up through their 25th birthday. The provision increases access to affordable coverage for young adults.
  • Allows creation of state health plan finders so consumers can effectively comparison shop for health insurance.
  • HSAs and individual tax issues:

  • Under current law, low and moderate-income individuals are eligible for a limited, nonrefundable tax credit for a portion of their contributions to IRAs and 401(k)s. Section 231 of the CSHRA expands this “saver’s credit” to cover contributions to Health Savings Accounts (HSAs), making HSAs more attractive to families earning under $50,000 annually.
  • Section 232 of CSHRA: This provision allows taxpayers to use HSA funds to pay monthly premiums on their high deductible health plans (HDHPs), but only if, after the distribution, taxpayers retain a balance in their HSAs equal to or greater than 2x the amount of the minimum annual deductible.

Benefit Provisions: Affordable Care Act

  • The bill prohibits individual and group health plans from placing lifetime limits on the dollar value of coverage. Beginning in 2014, prohibit individual and group health plans from placing annual limits on the dollar value of coverage.
  • Create four benefit categories of plans plus a separate catastrophic plan to be offered through the Exchange, and in the individual and small group markets: – Bronze plan represents minimum creditable coverage and provides the essential health benefits, cover 60% of the benefit costs of the plan, with an out-of-pocket limit equal to the Health Savings Account (HSA) current law limit ($5,950 for individuals and $11,900 for families in 2010); – Silver plan provides the essential health benefits, covers 70% of the benefit services of the plan, with the HSA out-of-pocket limits; – Gold plan provides the essential health benefits, covers 80% of the benefit services of the plan, with the HSA out-of-pocket limits; – Platinum plan provides the essential health benefits, covers 90% of the benefit services of the plan, with the HSA out-of-pocket limits; – Catastrophic plan available to those up to age 30 or to those who are exempt from the mandate to purchase coverage and provides catastrophic coverage set at the HSA current law levels except that prevention benefits and coverage for three primary care visits would be exempt from the deductible. This plan is only available in the individual market.
  • .The ACA provides grants for up to five years to small employers that establish wellness programs beginning in 2011.

Benefit Provisions: Common Sense Healthcare Reform Act

  • The bill prohibits health plans from arbitrary annual or lifetime spending caps, thereby protecting individuals with a catastrophic diagnosis or chronic disease by ensuring health plans meet their obligations to those with the most expensive medical needs. There are far fewer regulations on benefits under the CSHRRA versus the ACA.
  • Employee wellness- This provision increases the financial rewards that can be offered to plan enrollees from 20% to 50% of value of the plan for successful completion of a standards based wellness program. Under this provision employers, for example, could provide a 50% discount on premiums for an employee who successfully quits smoking.

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