This article was published by Kaiser Health News.
By Lexie Verdon, Bara Vaida and Jordan Rau
The Republican effort to repeal the health care law is sure to founder in the Democratic-controlled Senate, but that doesn't mean that the GOP is ending its assault on the law. House Republicans are already beginning work in committees to lop off and possibly replace some of the law's individual provisions.
Party leaders have released few specifics, but some of the changes that have been urged by Republicans and a few Democrats could affect Americans' health care spending and coverage under the law. Ways and Means Committee Chairman Dave Camp of Michigan was blunt about the strategy when addressing reporters last week: "If the tree is rotten, you cut it down." If that doesn’t work, "we'll prune it branch by branch."
Here is a quick look at six "branches" Republicans are eyeing.
REPORTING BUSINESS PAYMENTS ON 1099 FORMS
What's in the law: This provision requires businesses that make payments of $600 in a year for goods or services to a single provider to file a 1099 form to the Internal Revenue Service identifying the company or person receiving the payment.
Purpose: The reporting requirement is expected to raise $19 billion over 10 years to help pay for the cost of expanded insurance coverage under the health law. It is intended to help increase taxpayers' income reporting compliance. Fiscal experts say individuals and businesses are more likely to report income correctly if they believe that the government already knows about it.
What's being discussed: This provision quickly raised concerns from business groups, which argue that the $600 trigger is too low and will create an administrative nightmare, especially for small businesses. That prompted bipartisan support to change or repeal the provision; the White House agreed that it should be amended. Both Republican and Democratic lawmakers have offered proposals to change or repeal the provision, but none passed last year, in part because they couldn't agree on whether or where to make budget cuts to offset the lost revenue. Several political observers, such as Time Magazine blogger Kate Pickert, have noted that the congressional logjam on this item suggests any changes to the health law will be difficult. The new GOP majority in the House is determined to take up the issue again and have made a bill to repeal the reporting requirement a priority, saying it will be considered in the early weeks of the session. Three Democratic senators have written Speaker John Boehner, R-Ohio, to urge quick passage of the bill.
INDIVIDUAL MANDATE
What's in the law: U.S. citizens and legal residents are required to have health insurance by 2014 or pay a penalty. A small number of people are exempted from the mandate, including those for whom the coverage would cost more than 8 percent of their income, American Indians and those who have religious objections.
Purpose: The mandate is designed to discourage consumers from waiting to apply for coverage until they are sick and need costly treatments. Backers say that's important because insurers will be required to provide coverage to people with pre-existing medical conditions.
The Congressional Budget Office has estimated that if the provision were struck from the law, fewer healthy people would purchase insurance and the result would be a 15 to 20 percent increase in premiums in the individual market. It also predicted that the number of uninsured Americans would be 23 million in 2019 under the current law, but that would rise to 39 million if the mandate were repealed or overturned by courts.
Under consideration: Republicans have been especially vehement in their opposition to this part of the law. They argue it is unconstitutional to force individuals to purchase a product and about two dozen states are challenging the provision in court. The issue is expected eventually to work its way to the Supreme Court. Even some Democrats who supported the law, such as Sens. Claire McCaskill of Missouri and Ben Nelson of Nebraska, have acknowledged that they would like to explore other options to guarantee that the insurance pool is robust. Among the options being promoted by different groups are:
--Limited enrollment. Under this proposal, insurers would be required to accept new customers only during a specified time period, thus eliminating concerns about people seeking coverage only when they get sick. That consumer-buying opportunity could be yearly or pegged to specific events, such as taking a new job or getting divorced. Some experts also have suggested keeping enrollment open year round, but allowing insurers to charge more for coverage purchased outside of that specified buying period or to limit coverage for people with pre-existing conditions if they seek insurance outside of the period. Another alternative would allow insurers to charge new customers back premiums if the customers had been without insurance in the past.
--A public option. This would be a very basic government-sponsored plan that would enroll all consumers who did not get private insurance. The government would levy a tax on beneficiaries of this plan. Many Democrats favored a public option early in the health care debate but Republicans and conservative Democrats opposed it because they feared it would become extremely expensive and could force some private plans out of business.
--Stiffer employer mandate covering all workplaces. If more employers offered health care, some experts argue, the crisis could be relieved. People who don't get coverage through work could be handled through COBRA or Medicaid.
--A switch to incentives. Instead of fining people who don't buy insurance, some experts have suggested that Congress instead use tax credits to reward those who do.
In addition, Sens. Ron Wyden, D-Ore., and Scott Brown, R-Mass., have proposed a bill that moves up the date at which states could seek exemptions from the mandate if they find other ways to meet comparable insurance-coverage goals.
INDEPENDENT PAYMENT ADVISORY BOARD
What's in the law: This 15-member board, whose members are to be nominated by the president and confirmed by the Senate, is tasked with curbing the per capita rate of growth in Medicare spending. Beginning in January 2014, the boardwill make recommendations on ways to reduce the growth of Medicare spending that will be automatically implemented in the 2015 fiscal year unless Congress comes up with its own solution for slowing spending. Congress may also vote, by a supermajority, to reject the recommendations and send the bill to the president, who can sign or veto the measure. Both Congress and the IPAB face statutory deadlines for action.
Purpose: Efforts by Congress to rein in Medicare spending have been met by repeated resistance from special interests, making it politically difficult for lawmakers to slow health care spending. The IPAB is supposed to make the hard decisions on spending that Congress has been unable to implement.
What is being discussed: Republicans see the board as another expansion of government over health care, while many House Democrats are opposed to having an independent board exercise control over Medicare. Many powerful interests, including doctors, drug companies, hospitals and patients-rights groups have begun lobbying Congress to get rid of the IPAB provision. They say they’re worried the cuts will be draconian, disrupting the health care system.
HEALTH CARE FLEXIBLE SPENDING ACCOUNTS
What's in the law: Starting this year, people who put money into pre-tax flexible spending accounts (FSAs) can no longer use those funds to buy over-the-counter medications or health care products unless they have a prescription. Starting in 2013, the maximum contributions to those accounts will be capped at $2,500 a year.
Purpose: The change is intended to increase government revenues to help pay for the broader health care overhaul, in which poorer people's health insurance will be subsidized by the government. Many economists also argue FSAs encourage needless purchases because any unspent money is forfeited at the end of the year.
What's being discussed: Companies that administer these accounts arepressing Congress to rescind the restriction on over-the-counter medications and products. They also hope that if Congress won’t raise the $2,500 annual limit, lawmakers will at least allow people to roll unspent money into the next year's account or have it returned to them as taxable income.
CLASS ACT
What's in the law: This voluntary insurance program – financed through a payroll deduction – is designed to help people stay in their own homes if they become disabled by giving them money for non-medical care expenses.
Purpose: The payments of at least $50 a day can be used for a variety of expenses, including paying for a home health aide or family member who provides care, household modifications, respite care, special transportation or technology needs or to help pay for assisted living expenses. There is no lifetime limit on benefits.
What's being discussed: Conservatives argue that the program will quickly outpace its funding and become an entitlement that the country cannot afford. Some of these experts, including Brian Blase at the Heritage Foundation, have urged Congress to repeal the provision before CLASS begins operation. Last year, Sen. Lindsey Graham, R-S.C., introduced a bill to repeal the provision and Rep. Charles Boustany, R-La., introduced legislation requiring Congress to reconsider whether the program was self-sustaining. Lawmakers did not act on either bill. Republicans and some conservative Democrats have also objected to the fact that premiums are counted as revenue to help finance the overall health law. But supporters of CLASS – originally proposed by the late Sen. Edward Kennedy, D-Mass., – say the program is entirely self-financed and can only continue if the secretary of the Department of Health and Human Services certifies that it is financially solvent.
TAXES ON INSURERS
What's in the law: Starting in 2014, a fee will be imposed on health insurers. The fee for the industry will be $8 billion in 2014 and will grow to $14.3 billion in 2018. After that, increases will be based on the rate of growth of premiums. Individual insurance companies' share will be assessed based on their market share. Nonprofit insurers will have different provisions.
Purpose: The provision is designed to raise money to help fund the health overhaul.
What's being discussed: Sen. Ron Wyden, D-Ore., said in an interview with KHN that he is considering an amendment that would restructure the tax formula in this provision so that insurers with lower premiums would not be penalized as much as others. "I've been looking at – I'm not ready to do – is that there are considerable taxes on insurers over the next few years," he said. "[But] if [insurers] hold their premiums down, they should pay less tax. If they don’t hold premiums down, they should pay more tax."
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