Updated: November 3, 2009

This legislation was unveiled by Democrats in the House of Representatives in October 2009, and is considered the leading health care reform package to be considered in the House.

 

Significant highlights of the Affordable Health Care for America Act include,

 

Individual and Business Requirements

  • Requires that most legal residents purchase health insurance by 2013 and penalizes people who do not do so
  • Establishes insurance exchanges to subsidize insurance costs for individuals and families with incomes between 150% and 400% of the Federal Poverty Level (FPL)
  • Expand Medicaid to cover non-elderly residents with incomes below 150% FPL
  • Require employers to provide insurance, or face a penalty equal to about 8% of their payroll. An exemption/reduced penalty exists for companies with payrolls below $750,000
  • Funds program through a 5.4% "surcharge" on incomes above $500,000 annually

Insurance Changes:

 

  • Pre-existing conditions cannot disqualify an applicant
  • Rates cannot be based on health, but can vary based on age by a rate of 3:1
  • Creation of a public health insurance plan administered by the Secretary of Health and Human Services
  • Public plan would negotiate payment rates with all providers and suppliers of health care

Other Changes to Medicare, Medicaid and Other Federal Programs

  • Change payment rates and rules to save federal government approximately $426 billion between 2010-2019 

Status:

 

The Affordable Health Care for America Act is expected to be voted on by the House of Representatives as early as the first week of November. Timing of the floor vote will depend largely on finalization of "Manager’s Amendments", which are bill amendments agreed upon in advance by the majority and minority leaders. The final version of this bill would then be blended with a final Senate bill before the ultimate vote on final passage.

 

CIANJ Positions:

 

CIANJ is opposed to the legislation as currently drafted.

 

While this bill has comprehensive methods for broadening access to health insurance - including the creation of a government-run health insurance program - it does relatively little to bring down the cost of health care.

 

CIANJ has already contacted Members of Congress to express its opposition to the creation of the public option. The legislation would have created a perverse incentive for employers to drop their existing coverage, thereby expanding the number of citizens in the public option and crowding out the private market. Furthermore, the weak penalties tied to the individual mandate, combined with a universal acceptance requirement on insurers, would provide financial incentives for individuals to skirt the mandate and pay the fine until they become seriously ill.

 

Finally, CIANJ is concerned over the income tax surcharge on high wage earners, which would bring the overall federal income tax burden on these individuals to 45%. This, combined with New Jersey's uniquely high top marginal rates, would make the state even less competitive in attracting entrepreneurs.

 

Some of the policy solutions CIANJ members have proposed include,

 

  • Remove obstacles to the creation of Health Savings Accounts (HSAs) and high-deductible health insurance plans
  • Treat employer-provided and individual market insurance equally through the tax code.
  • Repeal state-imposed mandates on what insurance providers must provide as part of basic coverage. Collectively, the mandates make insurance less affordable and prohibit the purchase of basic, "bare bones" coverage that is appropriate for and desired by some New Jersey residents who otherwise leave the risk pool.