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Kennedy Bill Creates "Start-Up Fund" for Govt Plan

By Philip Klein on 7.2.09 @ 1:29PM

I just skimmed through the latest version of the Senate Health, Education, Labor and Pensions Committtee bill that I mentioned earlier. PDF here.

But here are the highlights:

-- The bill would create a mandate requiring individuals to obtain health insurance and employers with 25 or more employees to provide health insurance or face a tax.

--It would offer health insurance subsidies for those making up to 400 percent of the poverty line (that's $84,800 for a family of 4) to help people get covered.

-- It would require that insurers offer coverage to everybody who applies, regardless of preexisting conditions, and it bars them from charging different rates based on health factors. For those following this blog, yes, that still means outlawing programs like the one Safeway runs, which encourages healthier living by offering discounted premiums to those who maintain health weight, blood pressure, and cholesterol levels.

--It would bar insurers from setting annual or lifetime dollar limits on coverage, and create a federal "slacker mandate" requiring that insurers allow parents to keep children on their family insurance plans until the age of 26.

--Instead of a national health insurance exchange, the federal government will require each state to create its own exchange -- called a Gateway. If a state doesn't create one within four years, the federal government will step in and establish one in the state.

--Each state exchange will be comprised of private insurers who would have to offer plans that are considered "qualified" by the government and a government-run plan, which is called a "community health insurance option.”  Private insurers would have to pay a surcharge of up to 4 percent of premiums collected to subsidize the exchange (unclear to me at this point whether that would also apply to the government plan). 

--In order to establish the government-run plan, the federal government will create a "Start-Up Fund," which is supposed to be paid back within 10 years. The bill, however, does not specify the consequnces if the government plan is overbudget and unable to pay back its start up costs.