HEALTH CARE REFORM

On September 16, Senate Finance Committee Chairman Max Baucus (D-MT) released a compromise health care reform bill which would require most Americans to enroll in health insurance, create insurance “exchanges” through which certain individuals and families could receive federal subsidies to substantially reduce the cost of purchasing that coverage and expand eligibility for Medicaid. The cost of the bill would be paid for by reducing the growth of Medicare’s payment rates for most services, levying an excise tax on insurance carriers with plans that charge relatively high premiums ($8,000 for singles and $21,000 for family plans) and through other provisions. The Congressional Budget Office said the bill is fully financed over the first ten years.

FEHBP WILL NOT BE OPEN TO CIVILIANS

The Baucus legislation would not open the Federal Employees Health Benefits Program (FEHBP) to non-federal civilians, nor would FEHBP participants be required to enroll in the insurance exchange system. However, any comprehensive plan that changes insurance law, provider financing, taxation policy and health infrastructure, will have some ramifications on how FEHBP operates in the larger health system. More analysis on the Baucus legislation will be provided later.