Long-Term Cost of the American Affordable Health Choices Act of 2009; As Amended by the Energy and Commerce Committee In August 2009
Executive Summary
In this study we estimate the impact of The American Affordable Health Choices Act of 2009 (H.R. 3200) (Act) as amended by the Energy and Commerce (E&C) Committee in August of 2009. The Act would require all Americans to have health insurance. To assure access to affordable coverage, the Bill expands the Medicaid program to 133 percent of the Federal Poverty Level (FPL) for adults and provides premium subsidies for people living through 400 percent of the FPL (e.g., $88,000 for a family of four). It also requires employers to either cover their workers or pay a payroll tax of up to 8.0 percent.
In addition, the Bill establishes an “exchange” that presents consumers with a selection of health coverage alternatives including a newly created public plan that would compete with private insurers for enrollment. Under the amended Act, the public plan is required to negotiate payment levels with providers rather than using the Medicare payment methodology, which would eliminate any price advantage the public plan might have had. The Act also reforms insurance markets by assuring guaranteed issue of coverage and prohibiting plans from varying premiums with health status.
The Act is funded with reductions in spending under the Medicare and Medicaid programs and a new surtax on income for people with incomes of $350,000 or more.
In this study we provide estimates of the program’s impact on coverage and spending for the federal government, state and local governments, private employers and consumers. Todemonstrate the long-term impact of the Act, we provide estimates for a 20-year period from 2010 through 2029.
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This article was prepared for general information purposes only to permit you to learn more about Ingenix Consulting and its services. It is not intended as a basis for decisions in specific situations, may not be current, and is subject to change without notice.
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