Healthy Americans Act estimated to be budget neutral by 2014

The Congressional Budget Office and Joint Committee on Taxation released a preliminary financial assessment on a modified version of the Healthy Americans Act, U.S. Senate bill 334 (Source: "Letter to Honorable Ron Wyden and Honorable Robert Bennett," Congressional Budget Offce and Joint Committee on Taxation, May 1, 2008).  According to this assessment, "Overall, our preliminary analysis indicates that the proposal would be roughly budget-neutral in 2014....More specifically, under your proposal, most health insurance premiums that are now paid privately would flow through the Federal budget. As a result, total Federal outlays for health insurance premiums in 2014 would be on the order of $1.3 trillion to $1.4 trillion. Those costs would be approximately offset by revenues and savings from several sources: premium payments collected from individuals through their tax returns; revenue raised by replacing the current tax exclusion for health insurance with an income tax deduction; new tax payments by employers to the Federal government; Federal savings on Medicaid and SCHIP; and state maintenance-of-effort payments of their savings from Medicaid and SCHIP."

The Healthy Americans Act is a bi-partisan, universal coverage bill wth 7 Republican and 7 Demoract co-sponsors in the U.S. Senate.  Its principal sponsors are Senator Ron Wyden, D-Oregon and Sentator Robert Bennett, R-Utah.  Some of the key features in this legislation are:

• An individual mandate that everyone must have health insurance
• All citizens and permanent residents, with a few exceptions, must enroll in a Healthy American Private Insurance plan (HAPI).
• A HAPI plan is required to provide at least a minimum benefits package benchmarked to the actuarial value of the Federal Employees Health Benefits (FEHB) Program standard benefit option BlueCross/Blue Shield plan for 2011
• The cost growth of HAPI plans will be indexed for subsequent years by the per capita increase in gross domestic product (GDP), rather than medical cost growth.
• Establishment of health help agencies in each state to assist with the selection of health plans to serve in a given area
• Premium subsidies for people with incomes below 400 percent of poverty, with no premium required for people with incomes below 100 percent of poverty and a sliding scale premium for people with incomes between 100 and 400 percent of poverty
• Community rating for the premium, with differences in premiums only because of geography and smoking status
• Replacement of the current tax deduction for employer-sponsored health insurance coverage with a health care standard deduction
• A health care tax on employers ranging from 3 to 26 percent of the national average premium for the minimum benefits package for each employee, depending on firm size and amount of gross revenues per employee
• Elimination of all Medicare DSH payments and 90 percent of Medicaid DSH payments