HR 3200, Section 209 - 242: The House Version of When, Who and How to Deliver a Public Option

The following excerpt was taken from the current version of HR 3200: Americas Affordable Health Choices Act of 2009, reported to the Committee on Education and Labor, 10/14/2009. This is very long read, but well worth it if you want to gain a better understanding how a health insurance bill might organize, implement and fund a Public Health Insurance Option.

H.R.3200
America's Affordable Health Choices Act of 2009 (Reported in House) SEC. 209. LIMITATION ON PREMIUM INCREASES UNDER EXCHANGE-PARTICIPATING HEALTH BENEFITS PLANS. (a) In General- The annual increase in the premiums charged under any Exchange-participating health benefits plan may not exceed 150 percent of the annual percentage increase in medical inflation for the 12-month period ending in June of the prior year, unless the plan receives approval for a higher rate increase in accordance with subsection (b) or (c). (b) Exception for Additional Required Benefits- If the Health Choices Commissioner requires Exchange-participating health benefits plans to provide additional benefits, the annual increase permitted under subsection (a) with respect to the first year to which such benefits are required shall be increased to take into account the costs of such additional benefits. (c) Exception to Where Financial Viability Threatened- Subsection (a) shall not apply to any Exchange-participating health benefits plan for any year if such plan demonstrates to the Commissioner (or, if determined appropriate by the Commissioner, the insurance commissioner for the State in which the plan is offered) that complying with subsection (a) for such year would threaten its financial viability or its ability to provide timely benefits to plan participants. (d) Non-preemption- Nothing in this section shall be construed as preempting existing State prior approval laws. Subtitle B--Public Health Insurance Option SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN. (a) Establishment- For years beginning with Y1, the Secretary of Health and Human Services (in this subtitle referred to as the `Secretary') shall provide for the offering of an Exchange-participating health benefits plan (in this division referred to as the `public health insurance option') that ensures choice, competition, and stability of affordable, high quality coverage throughout the United States in accordance with this subtitle. In designing the option, the Secretary's primary responsibility is to create a low-cost plan without compromising quality or access to care. (b) Offering as an Exchange-participating Health Benefits Plan- (1) EXCLUSIVE TO THE EXCHANGE- The public health insurance option shall only be made available through the Health Insurance Exchange. (2) ENSURING A LEVEL PLAYING FIELD- Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing. (3) PROVISION OF BENEFIT LEVELS- The public health insurance option-- (A) shall offer basic, enhanced, and premium plans; and (B) may offer premium-plus plans. (c) Administrative Contracting- The Secretary may enter into contracts for the purpose of performing administrative functions (including functions described in subsection (a)(4) of section 1874A of the Social Security Act) with respect to the public health insurance option in the same manner as the Secretary may enter into contracts under subsection (a)(1) of such section. The Secretary has the same authority with respect to the public health insurance option as the Secretary has under subsections (a)(1) and (b) of section 1874A of the Social Security Act with respect to title XVIII of such Act. Contracts under this subsection shall not involve the transfer of insurance risk to such entity. (d) Ombudsman- The Secretary shall establish an office of the ombudsman for the public health insurance option which shall have duties with respect to the public health insurance option similar to the duties of the Medicare Beneficiary Ombudsman under section 1808(c)(2) of the Social Security Act. (e) Data Collection- The Secretary shall collect such data as may be required to establish premiums and payment rates for the public health insurance option and for other purposes under this subtitle, including to improve quality and to reduce racial, ethnic, and other disparities in health and health care. (f) Treatment of Public Health Insurance Option- With respect to the public health insurance option, the Secretary shall be treated as a QHBP offering entity offering an Exchange-participating health benefits plan. (g) Access to Federal Courts- The provisions of Medicare (and related provisions of title II of the Social Security Act) relating to access of Medicare beneficiaries to Federal courts for the enforcement of rights under Medicare, including with respect to amounts in controversy, shall apply to the public health insurance option and individuals enrolled under such option under this title in the same manner as such provisions apply to Medicare and Medicare beneficiaries. SEC. 222. PREMIUMS AND FINANCING. (a) Establishment of Premiums- (1) IN GENERAL- The Secretary shall establish geographically-adjusted premium rates for the public health insurance option in a manner-- (A) that complies with the premium rules established by the Commissioner under section 113 for Exchange-participating health benefit plans; and (B) at a level sufficient to fully finance the costs of-- (i) health benefits provided by the public health insurance option; and (ii) administrative costs related to operating the public health insurance option. (2) CONTINGENCY MARGIN- In establishing premium rates under paragraph (1), the Secretary shall include an appropriate amount for a contingency margin (which shall be not less than 90 days of estimated claims). Before setting such appropriate amount for years starting with Y3, the Secretary shall solicit a recommendation on such amount from the American Academy of Actuaries. (b) Account- (1) ESTABLISHMENT- There is established in the Treasury of the United States an Account for the receipts and disbursements attributable to the operation of the public health insurance option, including the start-up funding under paragraph (2). Section 1854(g) of the Social Security Act shall apply to receipts described in the previous sentence in the same manner as such section applies to payments or premiums described in such section. (2) START-UP FUNDING- (A) IN GENERAL- In order to provide for the establishment of the public health insurance option there is hereby appropriated to the Secretary, out of any funds in the Treasury not otherwise appropriated, $2,000,000,000. In order to provide for initial claims reserves before the collection of premiums, there is hereby appropriated to the Secretary, out of any funds in the Treasury not otherwise appropriated, such sums as necessary to cover 90 days worth of claims reserves based on projected enrollment. (B) AMORTIZATION OF START-UP FUNDING- The Secretary shall provide for the repayment of the startup funding provided under subparagraph (A) to the Treasury in an amortized manner over the 10-year period beginning with Y1. (C) LIMITATION ON FUNDING- Nothing in this section shall be construed as authorizing any additional appropriations to the Account, other than such amounts as are otherwise provided with respect to other Exchange-participating health benefits plans. (3) NO BAILOUTS- In no case shall the public health insurance option receive any Federal funds for purposes of insolvency in any manner similar to the manner in which entities receive Federal funding under the Troubled Assets Relief Program of the Secretary of the Treasury. SEC. 223. NEGOTIATED PAYMENT RATES FOR ITEMS AND SERVICES. (a) Negotiation of Payment Rates- (1) IN GENERAL- The Secretary shall negotiate payment rates for the public health insurance option for services and health care providers consistent with this section and section 224. (2) MANNER OF NEGOTIATION- The Secretary shall negotiate such rates in a manner that results in payment rates that are not lower, in the aggregate, than rates under title XVIII of the Social Security Act, and not higher, in the aggregate, than the average rates paid by other QHBP offering entities for services and health care providers. (3) INNOVATIVE PAYMENT METHODS- Nothing in this subsection shall be construed as preventing the use of innovative payment methods such as those described in section 224 in connection with the negotiation of payment rates under this subsection. (4) PRESCRIPTION DRUGS- Notwithstanding any other provision of law, the Secretary shall establish a particular formulary for prescription drugs under the public health insurance option. (b) Establishment of a Provider Network- (1) IN GENERAL- Health care providers (including physicians and hospitals) participating in Medicare are participating providers in the public health insurance option unless they opt out in a process established by the Secretary consistent with this subsection. (2) REQUIREMENTS FOR OPT-OUT PROCESS- Under the process established under paragraph (1)-- (A) providers described in such subparagraph shall be provided at least a 1-year period prior to the first day of Y1 to opt out of participating in the public health insurance option; (B) no provider shall be subject to a penalty for not participating in the public health insurance option; (C) the Secretary shall include information on how providers participating in Medicare who chose to opt out of participating in the public health insurance option may opt back in; and (D) there shall be an annual enrollment period in which providers may decide whether to participate in the public health insurance option. (3) RULEMAKING- Not later than 18 months before the first day of Y1, the Secretary shall promulgate rules (pursuant to notice and comment) for the process described in paragraph (1). (c) Limitations on Review- There shall be no administrative or judicial review of a payment rate or methodology established under this section or under section 224. SEC. 224. MODERNIZED PAYMENT INITIATIVES AND DELIVERY SYSTEM REFORM. (a) In General- For plan years beginning with Y1, the Secretary may utilize innovative payment mechanisms and policies to determine payments for items and services under the public health insurance option. The payment mechanisms and policies under this section may include patient-centered medical home and other care management payments, accountable care organizations, value-based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers. (b) Requirements for Innovative Payments- The Secretary shall design and implement the payment mechanisms and policies under this section in a manner that-- (1) seeks to-- (A) improve health outcomes; (B) reduce health disparities (including racial, ethnic, and other disparities); (C) provide efficient and affordable care; (D) address geographic variation in the provision of health services; or (E) prevent or manage chronic illness; and (2) promotes care that is integrated, patient-centered, quality, and efficient. (c) Encouraging the Use of High Value Services- To the extent allowed by the benefit standards applied to all Exchange-participating health benefits plans, the public health insurance option may modify cost sharing and payment rates to encourage the use of services that promote health and value. (d) Promotion of Delivery System Reform- The Secretary shall monitor and evaluate the progress of payment and delivery system reforms under this section and shall seek to implement such reforms subject to the following: (1) To the extent that the Secretary finds a payment and delivery system reform successful in improving quality and reducing costs, the Secretary shall implement such reform on as large a geographic scale as practical and economical. (2) The Secretary may delay the implementation of such a reform in geographic areas in which such implementation would place the public health insurance option at a competitive disadvantage. (3) The Secretary may prioritize implementation of such a reform in high cost geographic areas or otherwise in order to reduce total program costs or to promote high value care. (e) Non-uniformity Permitted- Nothing in this subtitle shall prevent the Secretary from varying payments based on different payment structure models (such as accountable care organizations and medical homes) under the public health insurance option for different geographic areas. SEC. 225. PROVIDER PARTICIPATION. (a) In General- The Secretary shall establish conditions of participation for health care providers under the public health insurance option. (b) Licensure or Certification- The Secretary shall not allow a health care provider to participate in the public health insurance option unless such provider is appropriately licensed or certified under State law. (c) Payment Terms for Providers- The Secretary shall establish terms and conditions for the participation (on an annual or other basis specified by the Secretary) of physicians and other health care providers under the public health insurance option, for which payment may be made for services furnished during the year. (d) Exclusion of Certain Providers- The Secretary shall exclude from participation under the public health insurance option a health care provider that is excluded from participation in a Federal health care program (as defined in section 1128B(f) of the Social Security Act). SEC. 226. APPLICATION OF FRAUD AND ABUSE PROVISIONS. Provisions of law (other than criminal law provisions) identified by the Secretary by regulation, in consultation with the Inspector General of the Department of Health and Human Services, that impose sanctions with respect to waste, fraud, and abuse under Medicare, such as the False Claims Act (31 U.S.C. 3729 et seq.), shall also apply to the public health insurance option. SEC. 227. APPLICATION OF HIPAA INSURANCE REQUIREMENTS. The requirements of sections 2701 through 2792 of the Public Health Service Act shall apply to the public health insurance option in the same manner as they apply to health insurance coverage offered by a health insurance issuer in the individual market. SEC. 228. APPLICATION OF HEALTH INFORMATION PRIVACY, SECURITY, AND ELECTRONIC TRANSACTION REQUIREMENTS. Part C of title XI of the Social Security Act, relating to standards for protections against the wrongful disclosure of individually identifiable health information, health information security, and the electronic exchange of health care information, shall apply to the public health insurance option in the same manner as such part applies to other health plans (as defined in section 1171(5) of such Act). SEC. 229. ENROLLMENT IN PUBLIC HEALTH INSURANCE OPTION IS VOLUNTARY. Nothing in this division shall be construed as requiring anyone to enroll in the public health insurance option. Enrollment in such option is voluntary. Subtitle C--Individual Affordability Credits SEC. 241. AVAILABILITY THROUGH HEALTH INSURANCE EXCHANGE. (a) In General- Subject to the succeeding provisions of this subtitle, in the case of an affordable credit eligible individual enrolled in an Exchange-participating health benefits plan-- (1) the individual shall be eligible for, in accordance with this subtitle, affordability credits consisting of-- (A) an affordability premium credit under section 243 to be applied against the premium for the Exchange-participating health benefits plan in which the individual is enrolled; and (B) an affordability cost-sharing credit under section 244 to be applied as a reduction of the cost-sharing otherwise applicable to such plan; and (2) the Commissioner shall pay the QHBP offering entity that offers such plan from the Health Insurance Exchange Trust Fund the aggregate amount of affordability credits for all affordable credit eligible individuals enrolled in such plan. (b) Application- (1) IN GENERAL- An Exchange eligible individual may apply to the Commissioner through the Health Insurance Exchange or through another entity under an arrangement made with the Commissioner, in a form and manner specified by the Commissioner. The Commissioner through the Health Insurance Exchange or through another public entity under an arrangement made with the Commissioner shall make a determination as to eligibility of an individual for affordability credits under this subtitle. The Commissioner shall establish a process whereby, on the basis of information otherwise available, individuals may be deemed to be affordable credit eligible individuals. In carrying this subtitle, the Commissioner shall establish effective methods that ensure that individuals with limited English proficiency are able to apply for affordability credits. (2) USE OF STATE MEDICAID AGENCIES- If the Commissioner determines that a State Medicaid agency has the capacity to make a determination of eligibility for affordability credits under this subtitle and under the same standards as used by the Commissioner, under the Medicaid memorandum of understanding (as defined in section 205(c)(4))-- (A) the State Medicaid agency is authorized to conduct such determinations for any Exchange-eligible individual who requests such a determination; and (B) the Commissioner shall reimburse the State Medicaid agency for the costs of conducting such determinations. (3) MEDICAID SCREEN AND ENROLL OBLIGATION- In the case of an application made under paragraph (1), there shall be a determination of whether the individual is a Medicaid-eligible individual. If the individual is determined to be so eligible, the Commissioner, through the Medicaid memorandum of understanding, shall provide for the enrollment of the individual under the State Medicaid plan in accordance with the Medicaid memorandum of understanding. In the case of such an enrollment, the State shall provide for the same periodic redetermination of eligibility under Medicaid as would otherwise apply if the individual had directly applied for medical assistance to the State Medicaid agency. (c) Use of Affordability Credits- (1) IN GENERAL- In Y1 and Y2 an affordable credit eligible individual may use an affordability credit only with respect to a basic plan. (2) FLEXIBILITY IN PLAN ENROLLMENT AUTHORIZED- Beginning with Y3, the Commissioner shall establish a process to allow an affordability credit to be used for enrollees in enhanced or premium plans. In the case of an affordable credit eligible individual who enrolls in an enhanced or premium plan, the individual shall be responsible for any difference between the premium for such plan and the affordable credit amount otherwise applicable if the individual had enrolled in a basic plan. (3) PROHIBITION OF USE OF PUBLIC FUNDS FOR ABORTION COVERAGE- An affordability credit may not be used for payment for services described in section 122(d)(4)(A). (d) Access to Data- In carrying out this subtitle, the Commissioner shall request from the Secretary of the Treasury consistent with section 6103 of the Internal Revenue Code of 1986 such information as may be required to carry out this subtitle. (e) No Cash Rebates- In no case shall an affordable credit eligible individual receive any cash payment as a result of the application of this subtitle. SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL. (a) Definition- (1) IN GENERAL- For purposes of this division, the term `affordable credit eligible individual' means, subject to subsection (b), an individual who is lawfully present in a State in the United States (other than as a nonimmigrant described in a subparagraph (excluding subparagraphs (K), (T), (U), and (V)) of section 101(a)(15) of the Immigration and Nationality Act)-- (A) who is enrolled under an Exchange-participating health benefits plan and is not enrolled under such plan as an employee (or dependent of an employee) through an employer qualified health benefits plan that meets the requirements of section 312; (B) with family income below 400 percent of the Federal poverty level for a family of the size involved; and (C) who is not a Medicaid eligible individual, other than an individual described in section 202(d)(3) or an individual during a transition period under section 202(d)(4)(B)(ii). (2) TREATMENT OF FAMILY- Except as the Commissioner may otherwise provide, members of the same family who are affordable credit eligible individuals shall be treated as a single affordable credit individual eligible for the applicable credit for such a family under this subtitle. (3) EQUAL TREATMENT OF CERTAIN EMPLOYED INDIVIDUALS- (A) IN GENERAL- For purposes of applying this section with respect to an individual who is an employee of an employer that has an annual payroll (for the preceding calendar year) which does not exceed $750,000 and that makes the contribution which would be required under section 313(a) if the table specified in subparagraph (B) were substituted for the table specified in section 313(b)(1) (and if, in applying section 313(b)(2), $750,000 were substituted for $400,000), such individual shall be treated in the same manner as an employee of an employer that makes the contribution described in section 313(a) (without regard to this paragraph).

Senate bills, S1679 (Senator Tom Harkin) and S1796 (Senator Max Baucus) also include provisions for a Public Option. I have provided the following links.

 http://hdl.loc.gov/loc.uscongress/legislation.111s1679 

http://hdl.loc.gov/loc.uscongress/legislation.111s1796

 S1679, Section 141 through Section 185 outlines provisions and language that authorize and regulate how states will implement a public option, who and how much will be paid by individuals and employers, and provision for expanding public health facilities.

 S1796, Section 1101 provides for the ESTABLISHMENT OF QUALIFIED HEALTH BENEFITS PLAN EXCHANGES. Another important read for this bill is SECTION 2226. WAIVER OF HEALTH INSURANCE REFORM REQUIREMENTS.

 These are the three top bills highlighted on www.thomas.gov at this time, and the bills receiving the most scrutiny in Congress. Of the three bills, HR 3200 is both the longest and the most straight forward. Its content is well organized, and the sections easily cross referenced against the current laws it seeks to amend. S1679 comes in second for these reasons. S 1796, the Baucus bill, seems the least well organized and the most confusing of the three, and appears to provide the most wiggle room for states, insurance brokers and insurance companies. In addition, S1796, like the house bill (discussed in an earlier blog) supported and cosponsored by Rep. Don Young, also seems to support the creation of independent "state brokers" responsible for the selection and distribution of the proposed public insurance exchanges.

 It will be very interesting to see how the House responds to and adapts the bills submitted by the Senate. As many might remember, the Senate dealt heavy handedly with the House in September 2008 with the TARP bill. The House has had ample time to formulate a strategy to handle the Senate and I for one am eagerly awaiting the outcome.