Test: Briefing on Impacts of Pending Federal Health Care Reform Legislation on Insurers and Providers

Feb 9, 2010

The pending federal health care reform legislation would have sweeping effects on all sectors of the health care industry, according to a briefing webinar presented by Sonnenschein Nath & Rosenthal LLP on Monday, January 19, 2009.

Key pending issues include the size of industry fees, scope of the “Cadillac” tax, a physician fee schedule, potential taxes on various groups, national versus state insurance exchanges and regulations on drug companies.

If a bill resembling what is pending passes it will mean approximately $900 billion in new spending over the next 10 years and approximately 15 million newly insured people.  All aspects of the health care delivery and financing system will be impacted.

It would also mean major reductions in Medicare and Medicare Advantage reimbursement, and increases in Medicaid coverage, which would greatly impact state budgets.

There would be mandates on individuals to obtain coverage and on businesses to provide coverage, with subsidies for low-income individuals and some small businesses.  Businesses would have the option to “pay or play,” meaning they would have to pay a penalty if they do not provide insurance.

Revenue provisions currently being considered are a 40 percent tax on “Cadillac” health plans, with certain exceptions such as union members, an increase in the hospital tax for individuals making more than $200,000 and couples making $250,000, and a 5.4 percent surtax on income over $500,000 for individuals and $1 million for families.

There are also new restrictions on individual health care spending accounts, setting a maximum contribution and eliminating previously allowed expenditures.

Key changes for insurance companies include plans must be “qualified” and offer “essential” benefits, new limitations on treatment of pre-existing conditions, guaranteed issue and renewability, no limits on benefits, rate regulation and minimum medical loss rations, and the creation of insurance exchanges and co-ops.

A compact slide show with listings of major provisions by category, and a much more extensive and detailed side-by-side summary of both the pending U.S. House and Senate bills are attached.


Should you have any questions or comments, please contact Colodny Fass.


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