A key Senate committee on Thursday unveiled significant new elements of health care reform legislation, including a plan for government-sponsored insurance and an employer mandate. The revised legislation is substantially cheaper than previous versions of the bill, according to the non-partisan Congressional Budget Office (CBO), with the changes bringing down the cost from previous estimates of $1 trillion to $611.4 billion over 10 years.
"We are on the cusp, on the brink of doing something here that is critical," said Sen. Chris Dodd (D-Conn.), who is leading health care reform efforts in the Senate Health, Education, Labor and Pensions Committee.
The HELP Committee will have to combine its legislation with legislation from the Senate Finance Committee, which is responsible for Medicaid provisions. The inclusion of Medicaid reforms could add to the total cost of reform significantly, but it would also help bring down the number of people in the United States left uninsured.
Analysis of the HELP bill (called the Affordable Choices Act) shows that it could bring down the number of uninsured to 34 million by 2019. If the Finance Committee expands Medicaid to anyone at 150 percent of the poverty line, as it is expected to do, it would cover an additional 20 million people. The combined result would bring coverage to 97 percent of Americans.
Dodd said he hopes to wrap up work on the HELP bill by the end of next week and combine it with the Finance bill by the end of July.
The committee was able to bring down the cost of its bill by nearly half a trillion largely by including an employer mandate, or pay or play, provision.
"This is a strong number that will allow us to achieve the president's goals," Dodd said. "We believe these numbers are going to be very encouraging to people concerned about cost."
Under the pay or play provision, employers that do not offer their workers "adequate" coverage, covering at least 60 percent of monthly premiums, will be charged an annual fee -- $750 for each uncovered full-time employee, and $375 for each part-time employee. Firms with fewer than 25 employees will be exempt from the mandate.
"It's a cost, but a modest cost," Dodd said.
The CBO estimates that the employer mandate would virtually eliminate the migration of employees from their employer-based insurance to public insurance, thereby reducing the financial burden on the government. In its initial analysis, which was conducted before the employer mandate was included, it said about 15 million people would have left the employer-sponsored system.
The new version of the HELP bill also includes a federally-run, government-sponsored insurance option that all 13 Democrats on the committee have endorsed. Dodd and other HELP committee members told reporters Thursday that the public option is meant to complement rather than supplant the nation's largely employer-based system. However, said Sen. Sheldon Whitehouse (D-R.I.), it will "also help move us forward to a better and different business model for health insurance."
"Too much of that model involves trying to avoid people... trying to toss them over the side if they are insured and become sick," he said.
The public option would be fully operated and administered by the Department of Health and Human Services and made available in every state. The HHS would negotiate premium and reimbursement rates, taking into account regional differences. The payment rates paid by the public option would be no more than the local average private rates, but they could be less.
The plan would require each state to have an advisory board to develop strategies for quality improvement and affordability.
President Obama in a statement thanked Dodd and other members of the HELP committee for producing "legislation that lowers costs, protects choice of doctors and plans and assures quality and affordable health care for Americans."
Dodd said he would like to "build the bipartisan support we'd all like to have, but we have to begin with a plan that is accessible will reduce costs."
The newly-revised bill also includes 87 Republican amendments that were introduced over weeks of negotiations.
Predict: Health Care Reform
Will a major health care reform bill pass Congress before Labor Day?
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