Health Care Reform and Disability

Despite broad consensus that the United States needs health care reform, the devil is in the details. Lawmakers have been hard at it since returning from their August recess, but the political parties have yet to come to agreement and much of the public remain confused.

According to a Sept. 1 CBS News poll, “two in three Americans call the health care reforms being debated by lawmakers confusing; only 31 percent said they have a clear understanding of the proposed changes. This evaluation cuts across party lines, with majorities of both Republicans (69 percent) and Democrats (58 percent) saying the current proposals are confusing.” A more recent CBS News/ New York Times poll found that President Barack Obama’s recent efforts to explain his proposals have helped, but four in 10 of those polled said they still don’t know enough about the proposals to be sure whether they support them or not.

Principles for reform

The Consortium for Citizens with Disabilities (of which AAHD is a member) issued the following statement on health reform:

We view disability as a litmus test for how well a reformed health care system will address the needs of all Americans. If a health care system provides comprehensive and high-quality care to individuals with disabilities and chronic conditions, then it will serve the wide-ranging needs of the broader population.

America’s Healthy Future Act

Senate Finance Committee chair Max Baucus (D-Mont.) released his health care reform proposal, America’s Healthy Future Act, on Sept. 16. The proposal has been debated by the Finance Committee, which will vote on the bill Oct. 13.

Highlights

America’s Healthy Futures Act is built on three principles: (1) ensuring meaningful coverage and care to all Americans, (2) emphasizing higher quality, greater value, and — over time — less costly care and (3) eliminating waste and overpayments, and designing a sustainable financing system that works for taxpayers as well as for the nation’s recipients and providers of health care.

The bill would establish a new regulated health insurance exchange and require everyone to buy qualified health insurance coverage by 2013. The exchange would create a more organized and competitive market for health insurance by offering consumers a choice of plans, establishing common rules regarding the availability and cost of insurance, and giving consumers enough information to help them understand all their options.

Americans with employer-sponsored insurance could keep their existing plans, while the uninsured would have to enroll in an expanded Medicaid program, a new plan in the exchange or the now-regulated individual health insurance market. Most U.S. citizens and legal residents would have to buy coverage or pay a penalty, although there would be help for those with low incomes. There would be premium and cost-sharing credits for those up to 300 percent of the federal poverty level.

Employers that don’t provide health care and whose employees obtain subsidized coverage through a health insurance exchange would be subject to a so-called free-rider penalty. (This would apply to employers with more than 50 full-time employees; those who work 30 or more hours per week.) The penalty would be a flat fee for each such employee that would equal the average tax credit provided in the exchange. Under the Baucus proposal, the government would assess excise taxes against insurers or administrators of high-premium insured and self-insured group health plans.

America’s Healthy Future Act would reform insurance markets, such as by establishing state-based health insurance exchanges, prohibiting pre-existing condition limitations and restricting premium rating. Insurers could charge higher premiums to participants who smoke or to older participants, up to certain limits. For example, private insurers could charge older people up to five times what they charge younger people.

Minimum benefit packages would have to include preventive and primary care, physician services, outpatient services, emergency services, maternity and newborn care and others. It also outlines four levels of coverage:

  1. Bronze coverage, with an actuarial value (AV) of 65 percent
  2. Silver coverage, with an AV of 73 percent
  3. Gold coverage, with an AV of 81 percent
  4. Platinum coverage, with an AV of 90 percent

The bronze plan would be the standard for minimum creditable coverage. For all benefit tiers, out-of-pocket spending would be limited to the out-of-pocket caps that apply to health savings account-qualified high-deductible health plans under the tax code (for 2009, $5,800 for individual coverage and $11,600 for family coverage). Plans would have to provide first-dollar coverage for preventive care services.

In addition, a “young invincible” catastrophic plan would be available for those 25 and younger, which could impose cost-sharing on preventive services.

Disability-Related Provisions

The Baucus plan would phase out the disability waiting period for Medicare. When Medicare was expanded in 1972 to people with disabilities, Congress enacted a “Medicare waiting period,” which requires those with disabilities to receive Social Security Disability Insurance (SSDI) for 24 months before becoming eligible for Medicare. As a result of the 24-month Medicare waiting period, an estimated 400,000 Americans with disabilities are uninsured and many more are underinsured. The Baucus plan would phase out this two-year waiting period for Medicare. The plan is for people with disabilities to eventually be able to purchase coverage in a reformed health insurance market.

Home and Community Based Services (HCBS), which support people who want to remain in their own homes and communities, are generally provided through Medicaid waivers. Beneficiaries must have a significant level of disability to qualify. And even those who qualify often have difficulty accessing care. In 2005, more than 207,000 Medicaid beneficiaries were on the waiting list for HCBS waiver services. (Cynthia Shirk, “Rebalancing Long-Term Care: The Role of the Medicaid HCBS Waiver Program,” George Washington University National Health Policy Forum, 2006. Individuals must meet a level of functional need that qualifies them for a nursing home.) The Baucus plan would attempt to further expand access to HCBS in Medicaid with new options, such as providing states with new tools and incentives to make them available to more beneficiaries, and exploring ways to better coordinate care for dual-eligible individuals under Medicare and Medicaid.

The plan would also encourage states to explore new options to improve access to long-term care services and supports to prevent the progression of disability and to help individuals remain in their own homes. By intervening earlier with targeted assistance, the goal is to prevent or delay costly institutionalizations and provide a more patient-centered benefit. In addition, exploring inefficiencies and conflicting incentives within Medicare and Medicaid could improve the quality of care and decrease costs.

The act also would support family caregivers, such as by helping individuals, families and caregivers navigate the complex long-term care services and supports system. It suggests other possibilities, too, such as investing in aging and disability resource centers and programs that limit secondary disabilities by promoting nutrition, exercise and fall prevention.

Next Steps

The White House has published a report on health insurance reform and how it will help people with disabilities, which is available at www.whitehouse.gov/assets/documents

The Congressional Budget Office said the Senate Finance Committee’s version of health legislation would provide coverage to 29 million uninsured Americans (at a cost of $829 billion over a decade) but would reduce future federal deficits by slowing the growth of health care spending. If the finance committee approves the bill, it must then be merged with a measure approved by the Senate health committee. The House expects to begin action in mid-October.