WASHINGTON – U.S. Senator Ben Cardin (D-Md.), a member of the Senate Finance Health Care Subcommittee, on the first legislative day of the 116th Congress Thursday, introduced new legislation to make health coverage more affordable and maintain high for American consumers. The bill, Keeping Health Insurance Affordable Act, would establish a public health insurance plan to be offered on health insurance exchanges nationwide alongside private plans; increase eligibility for premium assistance tax credits and reduce out-of-pocket costs for middle-income households; and reduce prescription drug prices through Medicare Part D rebates and negotiations with drug companies.
“We need to start improving our health care system, not just allow it to be torn apart and destabilized,” said Senator Cardin. “What I hear most often from constituents, health professionals, and insurers is that we must get costs under control and continue the consumer protections like those for pre-existing conditions and essential health benefits outlined under existing law. Congress has an opportunity to come together, bring greater competition to health insurance markets, and fulfill the promise of health care as a right and not a privilege for all.”
The text of Senator Cardin’s Keeping Health Insurance Affordable Act can be found at this link. Key provisions are below.
The Keeping Health Insurance Affordable Act brings together several new and existing proposals that will improve the current healthcare system and address Americans’ concerns with high health care costs. The legislation tackles these concerns by increasing financial assistance to marketplace enrollees, increasing competition in the individual market, and addressing high prescription drug prices.
Increases Financial Assistance. The legislation would increase financial assistance for middle income families by increasing the eligibility level of those who may receive premium tax credits to purchase insurance on the individual market. In addition, the bill would also lower out-of-pocket costs for middle-income households by raising the eligibility level of those who are able to receive cost-sharing reductions.
- Premium Tax Credits. Under current law, enrollees in the federal and state insurance marketplaces qualify for a premium tax credit if they have an average household income for the year is at least of 100 percent Federal Poverty Level (FPL), but no more than 400 percent FPL. This bill would extend the eligibility level from 400 percent FPL to 600 percent FPL.
Increases Competition in the Marketplace. Under the bill, the HHS Secretary would establish and administer a public health insurance plan that would be offered on the exchanges, alongside private plans.
- The public health insurance plan would 1) be made available only through the Exchanges 2) comply with requirements applicable to other health benefits plans offered through the Exchanges, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing; and 3) be required to offer bronze, silver, and gold plan levels.
- This provision would also require HHS to:
- Establish an office of the ombudsman for the public health insurance option,
- Collect data as may be required to establish premiums and payment rates,
- Establish geographically adjusted premiums at a level sufficient to fully finance the costs of the health benefits provided and administrative costs related to the operation of the plan, and
- Establish payment rates and provide for greater payment rates for the first three years.
- Would require repayment of start-up costs for the public health insurance option.
- Would authorizes HHS to use innovative payment mechanisms and policies to determine payments for items and services under the public health insurance option.
Lowers Prescription Drug Costs. Many Americans have expressed concerns over the high price of prescription drugs. High prescription drug costs are especially challenging for older Americans who live on a fixed income, which is why this bill includes two provisions that would lower drugs costs for Medicare beneficiaries.
- Medicare Part D Negotiation. This provision would allow the federal government to negotiate the price of prescription drugs under Medicare. This provision would provide seniors with the option of a plan with a set premium, deductible, and copay level. This does not require the HHS Secretary to develop a national drug formulary or institute a price structure for the reimbursement of covered Part D drugs.
- Prescription Drug Rebates for the Dual-Eligible Population and Some Low-Income Medicare Part D Enrollees. The Keeping Health Insurance Affordable Act would require drug manufacturers to provide drug rebates to Medicare for drugs dispensed to low-income individuals under the Medicare Part D program. Prior to the creation of Medicare Part D, drug manufacturers paid rebates to the government for all dual eligible beneficiaries. Medicare Part D moved many dual eligible beneficiaries from Medicaid to Medicare, which eliminated the rebate. This resulted in a windfall for drug manufacturers because they no longer had to pay rebates for an often costly population. This provision seeks to lower the cost to the government by restoring these rebates for dual eligibles and extending them to some low-income Medicare Part D enrollees. Earlier versions scored by CBO show that this provision could save more than $100 billion over ten years.