Last week both the House and Senate released details about their respective healthcare plans. The Senate Committee on Health, Education, Labor, and Pensions (HELP) recently unveiled a draft of its massive and contentious healthcare bill.  A press release announcing the publication of the Affordable Health Choices Act and copy of the draft bill can be found here. (pdf)  A brief summary of the legislation can be found here. (pdf)  Although the over 600-page bill is still a work in progress, some key provisions will no doubt stir intense debate in the coming weeks. Notably, the bill would change the regulation of private health insurance plans. For example, the bill would ban preexisting condition exclusions, and prohibit discrimination and premium variance based on health status, medical condition (physical and mental), claims experience, medical history, genetic information, gender, and disability, among other factors. The proposal also includes different options for establishing a public health plan, and permits dependents to stay on their parents’ plans until age 26.

Of great significance for employers, the bill mandates that employers either provide health coverage to their workers, or share in the cost of employees obtaining their own insurance. Various options outlined in the bill include such a “pay or play” scenario, whereby employers (excluding small employers) that do not offer specified coverage pay a per-worker fee. Another option known as the “free rider penalty” would not require employers to offer health coverage, but would insist that any large employer whose employees are on Medicaid must repay the government some fraction of the cost for that employee’s Medicaid coverage. Similarly, if an employee chooses a public health insurance option that is deemed more affordable, a third option would require employers to pay the government the amount the employer would have paid for the employee’s coverage had the employee chosen the employer-sponsored insurance plan. Yet another option provides employers with tax incentives for encouraging healthy behavior. Small businesses would be exempt from many of these provisions, and would be eligible to receive tax credits based on the number of full-time employees, the proportion of employees provided health insurance, and employee wages.

Markup of the bill is scheduled to begin on Wednesday, June 17.

Meanwhile, the House has issued a document outlining its own healthcare plan. (pdf)  Drafted by the House Committees on Ways and Means, Energy and Commerce, and Education and Labor, the plan would create a national health “exchange” that would allow individuals and small employers to “comparison shop” among private insurers and a proposed public health insurance option. The proposal would allow states the option of developing a state or regional exchange in place of the national one. According to the House’s proposal, the public health insurance option would compete on a “level field” with private insurers.

Additionally, under the House proposal, individuals, employers, and the government would share the responsibility for providing and paying for healthcare. According to the outline of the plan:

• Once market reforms and affordability credits are in effect to ensure access and affordability, individuals would be responsible for having health insurance with an exception in cases of hardship;
• Employers would choose between providing coverage for their workers or contributing funds on behalf of their uncovered workers (the “pay-or-play” option);
• Government would be responsible for ensuring affordability of insurance through new affordability credits, insurance market and delivery system reforms and oversight of insurance companies; and
• Small, low-wage businesses would be exempt from these requirements. In addition, the plan would provide a new small business tax credit for those firms that provide health coverage.

The House has stated that its goal is to pass such a healthcare bill by the August recess. Since both the House and Senate proposals continue to face criticism from both Republicans as well as Democrats, these bills will likely be significantly amended before they are put up for a vote.

Much of the criticism surrounding these healthcare reform proposals has focused on the public plan option. In place of a government-run plan, some have come out in favor of creating a non-profit insurance cooperative (“co-op”) that would be owned and operated for the benefit of its members, which includes individuals and businesses with fewer than 10 employees. Sen. Kent Conrad (D-ND) suggested such a plan last week.  According to an article by The New York Times, some Republicans have been receptive to this idea, so long as it is not run by the government. Additionally, Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee, has also indicated that he is “inclined toward” such a cooperative approach. Whether such an option will work its way into the final legislation remains to be seen.