On November 19, 2009, Senate Majority Leader Harry Reid (D-NV) released health reform legislation, the Patient Protection and Affordable Care Act, that combines the bills reported out of the Finance and Health Education, Labor and Pensions (HELP) Committees. CBO is projecting that the bill’s spending provisions would total  $849 billion over ten years and that the bill would reduce the federal budget deficit by $127 billion over the first ten years.  CBO further estimates that the bill would cover 94 percent of Americans and reduce the number of uninsured persons by 31 million after ten years.

The combined Senate bill retains most provisions from the Finance legislation and adds several new ones. The merged legislation calls for state-based exchanges and includes a public option with a state opt-out feature. The legislation also provides start-up funding to establish a member-operated cooperative that would participate in the exchanges.  The merged bill includes all of the industry fees defined in the Senate Finance legislation for manufacturers and health plans, but cuts the device manufacturer fee in half. The bill keeps the health plan industry assessment at the same level, but now includes insurers’ administrative services fees for managing self-insured business.

The first crucial vote on the Senate floor – a cloture vote on a motion to proceed to consideration of the bill – may occur Saturday night, November 20, at 8 pm. If 60 senators vote for cloture on the motion to proceed to the bill, this will pave the way for the Senate floor debate on health reform after the Thanksgiving recess – on or about November 30. At this time, 2-4 weeks of debate are expected. Although opponents of the bill previously had signaled that they planned to slow down the legislative process by calling for a full reading of the bill (all 2,074 pages), it now is our understanding that they will not pursue this strategy.

Immediate Reforms — The following reforms would take effect within the first year after the bill’s enactment:

  • a ban on lifetime limits and unreasonable annual limits;
  • a prohibition on rescissions except in cases of fraud;
  • an option for unmarried individuals through age 25 to remain on their parent’s coverage as dependents;
  • a benefit mandate for preventive services;
  • reporting requirements on medical loss ratios and administrative costs;
  • rebates to be paid by plans with non-claims costs exceeding 20 percent in the group market and 25 percent in the individual market (or a lower percentage established by the state);
  • a premium justification process established by the HHS Secretary in conjunction with the states, including discretionary authority to exclude plans from the health insurance exchanges that have had unjustified premium increases in the 2010-2014 period;
  • a $5 billion temporary high-risk health insurance pool program to provide coverage to uninsured individuals with preexisting conditions;
  • a $5 billion temporary reinsurance program for employer-based plans providing coverage for early retirees; and
  • an internet portal to provide consumer information on coverage options.

Other key issues concerning this legislation can be found in this attachment.

Insurance Market Reforms
Individual Coverage Requirement
Government-Run Plan
Health Care Cooperatives
Excise Tax on High-Value Health Plans
Health Insurance Premium Tax
Interstate Sale of Insurance
Benefit Options
Medicaid Eligibility Expansion

The following documents pertaining to the Senate bill can be found on-line: