Healthcare Reform Update - 11Dec09

"High Premiums in Senate Democrats’ Health Plan"

• The Congressional Budget Office provided a preliminary cost analysis for the Senate’s tentative deal to replace the public option.
• The deal would create a national health insurance plan provided by private companies and would expand Medicare to those 55 and older.
• According to the CBO, premiums for both of these plans would be extremely high, even with federal subsidies.
• In 2016, when the health legislation is fully in effect, a family of four earning $54,000 would be eligible for a subsidy of $10,100 to help defray the cost of insurance. However, by then, one of the most popular federal plans, a nationwide Blue Cross and Blue Shield policy, is projected to cost more than $20,000.
• For people ages 55 to 64 looking to “buy in” to Medicare, the premiums could cost about $7,600 a year per person or $15,200 for a couple, according to a budget office analysis of an earlier version of the concept. No subsidies would be available until 2014, though the buy-in option would begin in 2011.
• Read more: http://www.nytimes.com/2009/12/11/health/policy/11insure.html

"CMS: Health Bill Excise Tax Could Bend Curve"

• Imposing a 40 percent excise tax on “Cadillac” health plans might be fairly effective at holding down the cost of healthcare, according to the Centers for Medicare and Medicaid Services (CMS).
• Richard Foster, chief actuary for CMS, declined to include the projected effect of the excise tax in his official analysis, but said that “affected employers would reduce their benefit packages in such a way as to eliminate about three-quarters of the current excess benefit value.”
• According to Foster, the effect of the tax would grow over time because of the relatively rapid increases in health insurance costs.
• In 2019, the excise tax could reduce the total $4.7 trillion in national health expenditures about 0.3 percent, or about $15 billion.
• Read more: http://www.lifeandhealthinsurancenews.com/News/2009/12/Pages/CMS-Health-Bill-Excise-Tax-Could-Bend-Curve.aspx?nul