NO LONGER PROPERTY l V , v ~— ‘ 0 F 0 IN N LC I ‘g/‘:-3 ’ a.1BRA3‘Y Washington Unnversflv """""" ‘ *“"'7 xx , “““‘. qt) éC3 .9 if A.‘“'« ~—.. 0 N0‘! 17 198 firxag If .'«.o....~“ L ‘M. 3 “'5. P L‘. .4; - vua ‘*4? V 4”’??? W 97>‘ .i“*v"‘L‘*,\¢>“\ « E-57?‘ 5' =‘ t‘=:;;;~. J n "*4- c*~ ~= -W :“'*'~\ 5 .7 “V E’. .~.'~" 19:} Q3‘ 3 . K4--,9 ‘xgzzs :1 A V H \‘ 9 CONGRESSIONAL RESEARCH . SERVICE LIBRARY OF CONGRESS HEALTH: CATASTROPHIC HEALTH INSURANCE ISSUE BRIEF NUMBER IB7906O AUTHOR: 0'Su1livan, Jennifer Education and Public welfare Division THE LIBRARY OF CONGRESS CONGRESSIONAL RESEARCH SERVICE MAJOR ISSUES SYSTEM DATE DRIGINATED DATE UPDATED FOR ADDITIONAL INFORMATION CALL 287*57OO 0303 cns- 1 IB79060 UPDATE-03/O3/80 ls;§§-2§§l!£E1QE Proposals to provide catastrophic health insurance protection for some or all of the poplation have received increasing attention in recent years. This interest has been sparked by two major factors. First is the realization that health care costs associated with a major illness or accident could cause financial ruin for all but the wealthiest families unless adequate insurance coverage were available. The second major factor leading to increased interest in catastrophic insurance his the realization that comprehensive national health insurance (which should by definition include protection against catastrophic medical expenses) may not be enacted for several years. A number of persons have advanced the view that in the interim the most pressing needs should be addressed, i.e., assurance of adequate catastrophic medical cost protection for the population perhaps coupled with improvements in existing programs for the aged (Medicare) and the poor (Medicaid). Opponents of this approach feel that enactment of (a catastrophic bill alone would not provide adequate health insurance protection for the whole population (particularly for that portion which currently has no health insurance coverage at all) and in addition would delay enactment of a truly comprehensive program. * Catastrophic medical costs are broadly defined. as large unpredictable health care expenses. These are usually associated with a major illness or serious injury. Two methods are commonly employed to determine whether an individual's expenses are catastrophic in (nature. The first standard measures absolute expenditures while the second standard is based on expenditures that are large relative to an individual's income. Large absolute expenditures, the traditional insurance definition of catastrophe, have been measured in various ways. The most common, the uniform expenditure definition, specifies a fixed expenditure within a stipulated period of time as the threshold for catastrophic cost, for ,example, $2,000, $5,000 or $10,000 per year. Another method (utilization of services) defines the threshold as a specified amount of service within a stipulated time period, for example, a specified number of hospital days per year. The utilization of services definition is normally used to refer to institutional care in hospitals or nursing homes.w Certain specific diseases have also been presumed to entail certain) catastrophic expenses. ?or example, the "Social Security‘ Amendments of 1972" attempted to provide protection for persons suffering end-stage renal disease (kidney failure) by, extending Medicare protection to this population group. ~ The second principal measure of catastrophic health expenses, used by some Government programs, is income-related. In general) parlance, expenditures that exceed 10% or 15% of an ,individual's gross income are considered CL astrophic. For the income-related definition, either actual out-of-pocket, expenses or total incurred expenses (including those paid for by insurance or other sources) are used. The Federal income tax law uses the out-of-pocket definition by permitting deductions for those expenses not otherwise reimbursed that exceed 3% of gross income. CRS--2 ‘ IB79060 UPDATE--03/03/80 A variation of the income-related method uses the protected income concept. Under this approach, a base income level is considered necessar" for daily living expenses, exclusive of medical care costs. Expenditures as, considered catastrophic when they reduce income below this protected level. some Hedicaid programs offer coverage to certain poor persons not otherwise program eligible (the "medically needy“) when they incur medical expenses equal to the difference between their income and the protected standard (this is knows as the Medicaid "spenddown"). ;n2iden2e-2£-§e:e§tr92his-§r2en§e§ The number of persons expected to incur catastrophic medical expenses in a given year depends on whether the absolute expenditure or income-related definition of catastrophic is used. ~ In January 1977, the Congressional Budget Office issued a paper, "Catastrophic Health Insurance", which outlined the scope of the problem under each definition. 1 Under the uniform expenditure definition (the most common measure of absolute expenditures), the CBO estimated that 7.0 million persons under age 65 would incur expenses in excess of $2,500 in FY78 while 2.5 million non-aged persons would incur expenses in excess of $5,000 in the same period. While those incurring over $5,000 were estimated to account for only 1.3% of the non—aged population, their catastrophic expenses of $13.1 billion would account for over 15% of the total health expenditures for the non-aged. Little information is available on the number of persons experiencing a medical catastrophe under the utilization of services definition (a varia- of the absolute expenditure definition). The CEO did estimate that more than 90% of hospital stays would be less than 30 days (not necessarily a catastrophic limit) while only 11% of nursing home stays would end within this period. In fact, almost three-quarters of nursing home stays would exceed 100 days. The CEO projected that, for FY78, persons hospitalized for at least 60 days would have estimated aggregate expenditures of $8.1 billion, while persons in nursing homes for at least 60 days would have aggregate expenditures of $17.7 billion. The principal population group experiencing extended stays, particularly in nursing homes, is the aged. If the income-related definition rather than the absolute expenditures definition were used to measure catastrophic expenses, a larger portion of the population would meet the criteria. The CBO estimated that 21.0 (million families (or 28% of total families) would incur expenses exceeding 15% of family income in FY78. However, 90% of these costs were expected to be paid by third-party sources (private insurance, public programs, philanthropy, and industry). If out-of-pocket expenses only were considered, an estimated 6.9 million families (or 9% of total families) were (expected to have expenses exceeding 15% of family income. The burden would fall primarily on the low—income with 2.3 million or 28% of those families with incomes under $5,000 incurring catastrophic expenses. This reflects both the lower absolute dollar figure which would trigger catastrophic expenses for this group and the better insurance coverage held by higher income families. 2rinei2al-§en§e§.2f-Cate§fr22hi2_§z2eases Under any of the measures of catastrophe, expenses associated with long term care, particularly in nursing homes and similar institutions, are the CRS- 3 IB79060 UPDATE-03/03/80 most frequent causes of catastrophic expenses, particularly for the aged. Such expenditures are often not covered under private health insurance plans ard only limited coverage is available under public programs. The CEO report ercimated that by FY78, 90% of all persons admitted to nursing homes would incur charges in excess of $5,000. For the non—aged population, the report estimated that two-thirds of catastrophic expenditures (defined as exceeding a $5,000 threshold per capita) would be related to stays in short term general hospitals. when the income-related definition of catastrophe is used, the low income would be the most likely to incur high expenditures relative to family incomes even though these amounts are not generally high in absolute terms. For example, if 15% of income were used as a catastrophic threshold, a family with $4,000 in income and $600 in medical expenses would be considered to have catastrophic expenses. §xistin9_§2zerase Attempts to determine the number of persons with adequate protection against catastrophic medical expenses have proved difficult. While this is in part due to the lack of adequate data, the more important reason “is that policies providing what could be viewed as strictly catastrophic coverage are rarely sold alone. Generally, any protection that is available for large unpredictable health expenditures is included as a part of or an adjunct to basic health insurance policies. Therefore, it is important to examine the major types of health insurance policies offered to determine those for whom catastrophic protection may be available. It should be noted both that the extent of coverage (including catastrophic protection) varies between plans ard that the protection offered may not precisely meet the generic u scriptions of "catastrophic" discussed earlier. 0 ’ : Persons most likely to have some form of catastrophic expense protection are those full-time employees in the regular work force and their dependents. Many of these persons are covered under m§jg;_ medigal_ gxpgn§g_ inggrangg nelisies or 9222;ehensize-nej9r-medisa;-insmranse eeiisiesg These policies are distinguished as follows: 1) §gjg;_ ggdigal: This type of insurance is usually intended to supplement basic hospital or basic-hospital-surgical medical insurance programs. It is often referred to as a supplementary major medical policy. when written alone (i.e., without a plan providing basic coverage) such a policy may be referred to as a catastrophic policy. Major medical policies involve a large deductible (i.e., the amount of covered medical expenses that must be incurred by the insured before benefits become payable). This type of plan usually specifies the fraction of the bill, up to the benefit limit (which is generally high), that will be paid by insurance (usually 80%). Then insured is responsible for the remaining portion, known) as the coinsurance amount (e.g., 20%). 2) Qemnrehensize-§aj9r-§e§i2el; This type of policy integrates basic coverage and major medical i surance in a single policy. It involves relatively low deductibles (e.g., $100) and high maximum payment limits. The insured is normally responsible for specified copayment amounts. The two types of policies outlined above area often referred to by the single designation of major medical policies. They are generally considered to offer the best protection against catastrophic medical costs; however the degree of protection actually offered depends on the scope of covered services, out-of-pocket expenses which must be paid by the insured, and the CRS- H IB79060 UPDATE~O3/03/80 maximum benefit levels. Both types of major medical insurance are characterized by large benefit maximums ranging from $10,000 up to $250,000 and, in some cases, an unlimited amount. The insurance, after the initia‘ deductible has been met, generally reimburses the major part of all chargt for hospital, doctor, medical appliances, prescribed out-of-hospital treatment, drugs and medicine. The insured person pays any required coinsurance amount. some plans include a limit on the amount of coinsurance (e.g., $500) an individual must pay either per cause or per calendar year. After this limit is reached, the policy will pay 100% of covered expenses either for the remainder of the illness or injury or for the remainder of the calendar or policy year (and sometimes the next year also). Such payments cannot exceed the benefit maximums of the policy. Payments also may not be made for any items or services not covered under the terms of the policy (typical exclusions include long term custodial care and some dental and mental health care). The "Source Book of Health Insurance Data, 1977-1978," prepared. by the Health Insurance Institute, estimated that a total of 93.2 million ,individuals (91.3 million under age 65) had some type of major medical expense protection through private 'insurance companies in 1976. This included 88.5 million individuals (86.7 million under age 65) who had group policies. Further breakdowns of these figures involve some duplication since some people hold more than one policy. In 1976, 66.8 million persons (65.5 million non—aged) were protected under supplementary major medical group policies; 31.6 million (30.8 million non-aged) were protected under comprehensive major medical group policies; and 6.7 million (6.5 million non—aged) had major medical coverage under individual or family policies. Hajor medical expense protection policies were defined by the Institute as any policies with benefit maximums of at least $10,000. It could be argux that policies with benefit maximums at the lower end of the scale (i.e., near $10,000) do not provide truly catastrophic coverage. However, the trend appears ito be toward larger benefit maximums. The Health Insurance Association of America (HIAA), in recent testimony before the Senate Finance Committee, noted that of new group policies sold in 1978, 88.5% contained benefit maximums of $100,000 or more. = In addition to those who have major medical insurance plans sold by private insurance companies, those individuals with high benefit hospital expense plans, Blue Cross-Blue Shield plans and other plans also have protection against catastrophic costs. The Health Insurance Institute "Source Book" noted that when all of these types of plans were considered, an estimated 107.6 million persons (1uu.u million persons under age 65) had coverage with maximum benefit levels of at least $10,000 and therefore were covered for catastrophic health expenses in 1976. Estimates prepared by the Congressional Budget Office ("Catastrophic Health Insurance") projected that 103 million persons in 1978 would have good catastrophic protection through major medical plans, comprehensive major medical plans, and Enos. While only 15.6% of those with family incomes below $5,000 were expected to have such coverage, 69.8% of those with family incomes of $30,000 or more would have such protection. The CBO report noted that an estimated 37.5 million persons would have basic hospital insurance with no major medical coverage in FY78. of th- group, 69% were estimated to have full service benefits (which provides full coverage for a specified number of hospital days) while 31% had indemnity coverage (which pays a fixed dollar amount per day regardless of cost). Persons with hospital service benefits are better protected against CRS-'5 IB7906O UPDATE—03/03/80 catastrophic hospital costs than those with indemnity coverage; however, neither group was considered to haven adequate protection against all C Fastrophic health costs. In addition, the 19 million persons in families w_¢h incomes below $10,000 who have only individual private health) insurance policies were generally considered to have poor protection against such costs. Public programs also provide some (protections against catastrophic expenditures. The Medicare program (which will cover an estimated 27 million aged and disabled in FY80) provides good protection for basic health expenses but less than adequate coverage for catastrophic costs. Less than 1% of the aged have hospital stays that exceed Medicare limitations; however, for stays beyond 60 days, the beneficiary becomes liable for daily coinsurance payments. The program's coverage of other institutional services is less adequate. Protection is available for only 100 days of post-hospital care in skilled nursing facilities. Thus, the primary catastrophic expense of the elderly -- long term institutional care -- is not fully addressed by the program. As a whole, Medicare covers only about 40% of the aged's health expenditures. Roughly half of the aged have purchased supplemental private insurance protection (known as "Hedi-gap" policies); typically, however, these policies only supplement the program's basic protection and offer little in the way of true catastrophic coverage. Some of the low-income elderly, as well as certain other categories of poor persons (blind, disabled, and members of families with children), have health care protection under Medicaid. While Medicaid coverage varies considerably from State to State, a significant number of the estimated 23 m’llion recipients have adequate catastrophic protection. T Public direct care programs, including the Veterans’ Administration system, State long term care institutions (psychiatric and chronic disease hospitals), and Federal hospital systems for Indians and Alaskan natives, are an important source of care for persons with catastrophic expenses who have insufficient resources to seek treatment in private facilities. T ' 0 2-s2zered-E22u;e:i9n The preceding discussion has focused on those persons who have some form of protection against at least some health care costs. There are, however, a number of persons who have no health insurance protection of any kind either against basic hospital and‘ medical expenses or against any catastrophic expenditures. This population is hard to identify and poses the) greatest problems for those attempting to design a catastrophic health insurance program. Protection cannot generally be made available to. them merely through an expansion or) modification of existing insurance policies and public programs. Further, a number of persons have argued that providing catastrophic protection only (without any basic health insurance coverage) for this population group will not adequately meet their health needs. a The Congressional Budget office issued a paper in March 1979, "Profile of Health Care Coverage: The Haves and Have-hots,” indicating that 11-18 m"lion persons, or an estimated 5-8% of the population, would have no health ca-e coverage at all in 1978. Based on 1976 data, the report noted that over half of the uncovered population would be in families (with incomes below $10,000. Many of these persons are not eligible for Medicaid because they do not meet the program's categorical requirements (age, blindness, disability, or a member of a family with children) or their income is in excess of the cns- 6 IB‘7906O UPDATE-403/G3/80 State's standards. Many low-income individuals work for employers who do not offer group health insurance and such persons are not able toy afford individual policies. Approximately 20% of the uncovered are age 19-?“ (though they represent only 11% of the population). The high number L- uncovered in this age group is attributable to several factors including the fact that many insurance companies do not cover children over 18 unless they are in school, many are unemployed or in jobs which do not offer coverage, and many are generally healthy and not motivated to purchase insurance. The CBO report further noted that although less than 10% of the employed lack coverage, they account for over one-third of the uncovered population. Generally these persons work in industries characterized by relatively low wages, high proportions of part-time or self-employed workers, and large seasonal fluctuations in employment. Further, some of these individuals work in firms that have health insurance plans with long waiting periods before coverage is provided. The report noted that over one-fourth of the unemployed were without coverage in 1976; it anticipated that the percentage would be higher in periods when the aggregate employment rate was lower since fewer would be on temporary layoffs (and potentially eligible for continuation of benefits). The vast majority of the uncovered are family members rather than single persons. Over half of the uncovered ’not in the labor force are in a family with a covered head of household. Similarly, 50% of the uncovered unemployed are in a family with a covered head of household. In some instances, the covered family member has not availed himself of the option of extending his insurance coverage to other family members, while in other instances policy limitations prevent such extensions. 2e§i92.9f-e-§e:e§t;92his-!eQi2el-ln§2ran2e-2re2-§el Proposals directed toward making catastrophic health protection more generally (or uniformly) available must address the following questions: 1. Qg§in;t;Qg_9§_gata§t;qpgig - What health expenditures will count toward the determination of a catastrophe? Should this definition be income-related for some population groups? Should different triggers be applicable for institutional and non-institutional care? 2. §gQpg_g§_pgng§it§ — what benefits will be available under the program? will coverage be uniform for all population groups? 3- Lin£a9e_sith-e;i§tia9-s2z§rege - Should all existing group health insurance plans he required to include a defined set of catastrophic benefits or should a separate catastrophic program be established? Should employees be required to obtain such protection? 1 H. gggigggg - Should catastrophic protection . provided Hedicare T beneficiaries be offered vthrough an expanded Medicare program? Should benefits be identical to those required under other plans? A 5. ggdigaig — Should the existing Medicaid programs be modified to assure provision of catastrophic protection? Should other program improvements be made (such as elimination of the categorical requirements‘ and requirements for a uniform benefit package) to attempt ‘to provide better basic heal*‘ protection for the low-income population? 6. ggin§u;gg_ggpglgt;gg - What mechanism, if any, should be established to identify and enroll the currently uninsured population? Should their coverage be made available, on the same basis as pfor the rest of the CR5“ 7 IB7906O UPDATE-03/O3/80 population? Should basic health insurance benefits be made available for this group? 7. g§;qgt_§;9gp§ -Should insurers be required to extend catastrophic protection to specified target groups such as: a) family members up to age 22 or 26 if they are not otherwise insured; b) divorced spouses and widows; and c) the unemployed for a specified period (e.g., 60, 90, or 180 days)? What provision should be made for part-time and seasonal employees? 8. ;gp§g;_gg_ gmplgyggg m- would all employers be required to offer coverage? would employers be required to assume the differential costs of any expanded benefits? Should any subsidies be offered for small employers? 9. ginggginq é Would the program for the general population be financed in whole or in part through Federal funds (e.g., a payroll tax)? What financing mechanism would be required for protection offered. to the low-income, high-risk, and similar groups? n 10. Q9§t_§ggg;g; - What mechanism would be instituted to assure that individuals are not encouraged to spend up to the catastrophic limit (since they would know subsequent costs would be covered)? What cost controls would be placed on coverage of catastrophic services? 7 11.;dm;gi§tr§t;Qg -what administrative mechanism would be required? L-s9i§la1.:iz<.e....A.<.=r .:'—.-n Discussion of catastrophic health insurance has generally been directed toward addressing the needs of three target populations; i.e., the employed, the Medicare population, and the low-income. Proposals introduced in the 96th Congress (see Legislation, below) generally require employers to provide or assure the provision of catastrophic coverage for their employees; they also provide expanded coverage for the Medicare population. Several measures also include improved protection for the low—income either through improvements in the existing nedicaid program, establishment of a new Federal program offering uniform benefits for the low-income, orh establishing an Federal program offering subsidies to the poor enabling them to purchase private insurance protection for medical costs that exceed a certain percentage of income. ? on June 20, 1979, the Senate Finance Committee began consideration of catastrophic health insurance legislation. The committee is currently making tentative decisions regarding the elements to be included in a proposed program. It is expected that after the broad outlines of a ‘plan. have been agreed to, a bill incorporating these decisions will be drafted for consideration by the committee. As of its meeting of Nov. 7, 1979,— the committee had tentatively approved several elements of the employer-based portion of the program. Under this plan, all employers (except the self-employed and State and local governments) would be required to provide and contribute financially toward the cost of a catastrophic health insurance plan for all their full-time employees and their dependents. An employee V uld be required to have catastrophic coverage unless he certified uto his e_ployer that he had coverage under another qualified plan. Employees could be required to pay up to 25% of the premium cost for the insurance protection. Qualified plans would be required to extend, for specified periods, coverage to workers who become unemployed; catastrophic coverage would also continue for dependents for one year following death, divorce, or cns- 8r IB7906O UPDATE-O3/G3/80 separation. Employer-based plans would be required to limit the amount of cover*‘ health expenses for which an individual or family would be liable to a maximum of $3,500 per year (the catastrophic deductible). when this deductible had been met, the plan would pay in full for at least the types of services currently covered under Medicare. Special catastrophic deductibles would apply for those workers whose incomes were less than $14,000 per year. For these workers, the amount of health care expenses for which they would be responsible could not exceed 25% of income (e.g., a family with $10,000 in earnings would have a $2,500 deductible instead of $3,500). Insurers would periodically file with the Federal Government a listing of payments made between the income-related deductible and the standard $3,500 deductible and receive reimbursement in full for such payments from the Federal Government. The committee also approved a tax credit for employers whose payroll costs would increase by more than 2% of what such costs would otherwise have been if they had not upgraded their insurance protection for their employees. The credit would equal 80% of the excess mandated payroll costs in the first year, 65% in the second year, and 50% in the third year; the credit would b discontinued after 3 years. , ‘ In addition to the~ provisions for an employer-sponsored plan, the committee has also made some tentative decisions regarding changes in Medicare coverage. Under the proposal, the annual total amount of copayments and deductibles a beneficiary would have to pay under Parts A and B of the program would be limited to $1,000. After the beneficiary reached the threshold, the program would pay 100% of reasonable costs or charges for covered services. In addition, once the individual had met the trigge' Medicare would also pay toward the costs of drugs, listed in a formulary, needed'for the treatment of chronic illnesses. i The Finance Committee also tentatively approved the use of insurance "pools."i Qualified insurers, self-insured employers, and health maintenance organizations (HMOS) in an area would be required to participate in such "pools" as a residual source of catastrophic health insurance for firms and individuals electing this protection. Premiums could not exceed 150% of the average premiums charged small employer groups. Any adverse experience of a pool (i.e., when claims exceeded premium amounts) would be borne proportionately by those underwriting the pool. The Finance Committee has discussed, but has not yet reached agreement, on any modification in the current Medicaid program for the low-income. L§§l§LA1l.!m S. 350 (Long et al.) ‘ ; Catastrophic Health Insurance and Hedical Assistance Reform Act. Authorizes catastrophic health insurance protection to be made available to all U.S. citizens and other permanent residents through either a Federal plan or an employer plan. Provides that the program would be financed through a 1% tax on the payroll of employers and the self-employed subject to the Social Security tax. Employers and self—employed who opted for a priva'\ plan would have the amount of premiums deducted from their 1% payroll tax liability. Specifies coverage would be for medical care in excess of $2,000 per family and for hospital and related care after an individual had been an inpatient in a hospital for 60 tdays. Replaces Medicaid with a uniform national program of basic health care benefits for low-income persons and CRS- 9 IB7906O UPDATE’03/03/80 families. Establishes a program whereby private health insurers, at their option, could submit one or more basic health insurance policies to the ' partment of Health, Education, and Welfare (HEW) for certification- introduced Feb. 6, 1979; referred to Committee on Finance. Hearings held Mar. 28-29; June 19 and 21, 19?9. Markup held June 28; Nov. 1, 6-7, 1979. S. 351 (Long et al.) Catastrophic Health Insurance Act. Includes provisions identical to those in S. 350 for catastrophic health insurance and private health insurance certification. Excludes provisions of S. 350 establishing a new medical assistance program for the low-income. Introduced Feb. 6, 1979; referred to Committee on Finance. Hearings held Mar. 28-29; June 19, 21, 1979. Markup held June 28, Nov. 1, 6-7, 1979. S. 7&8 (Dole, Danforth, and Domenici) Catastrophic Health Insurance and nedicare Improvements Act of 1979. Modifies medicare by deleting coinsurance requirements for hospital and skilled nursing facility care, and increasing coverage for mental health services.( Provides that catastrophic protection would trigger under hedicare once a beneficiary incurred expenses of $5,000 in a year (annually adjusted) or out-of-pocket expenses (excluding the $60 deductible) equal to 20% of that amount for covered Part B—type services. Specifies that expenses for certain outpatient drugs, listed in a formulary, necessary for the treatment of crippling or life-threatening chronic diseases, could be counted toward meeting the trigger; program payment for such drugs could be made once the trigger had been met. Requires all employers to offer group health insurance r verage to their full-time employees which provides, at a minimum, coverage 1,: inpatient hospital services after an individual or family has "been hospitalized for 60 days and coverage for Medical services (identical to those offered under Medicare Part B) after an individual or family unit has incurred $5,000 (annually adjusted) in expenses for such services. Establishes a residual market catastrophic health insurance program offered through private carriers for individuals with no other catastrophic ,health insurance or Medicare or Medicaid. Provides that the Secretary would pay the carriers graduated premium subsidies on behalf of the low-income. (Provides that benefits would be identical to those offered under employment-related plans: in addition, coverage would be provided for any yindividual who .had out-of-pocket costs (not less than $200) equal to 15% of income. Introduced Mar. 26, 1979; referred to Committee on Finance. Hearings held Mar. 28-29, June 21, 1979. Markup held June 28, Nov. 1, 6-7, 1979. S. 760 (Long) Includes provisions similar to those in S. 350 except fore some modifications in the catastrophic health insurance program. In lieu of the 1% payroll tax levied on employers under 5. 350, this measure requires all employers to provide catastrophic health insurance protection to their employees and family members. Employers with payrolls of $250,000 or less in a year would have the option of either taking a tax deduction for their premium costs or a 50% tax credit for those costs. Public and non-profit I employers, regardless of size, and uncovered individuals would’ also be e“gible for the 50% tax credit. Employer plans would have to be certified b} HEW and the Secretary would be required to offer a catastrophic policy in States in which approved plans were not actually and generally available. The measure also permits dependent children to remain under a parent's policy until age 26. Introduced Mar. 26, 1979; referred to Committee on Finance. yfiearings held Har. 28-29, June 21, 1979. Markup held June 28, Nov. 1, 6-7, cns-10 IB79060 UPDATE—03/03/80 S. 1590 (Schweiker et al.) Comprehensive Health Care Reform Act. .Requires large employers to off; employees at least three competitive health insurance plans, at least one of “which would have to contain provision for patient cost-sharing for hospital services, in order for the business expense tax deduction for employer contributions to be allowed. Requires large employers to offer catastrophic benefits (defined as payment of 100% of incurred expenses after a family paid out-of-pocket expenses equal to 20% of income) as a condition for receiving such tax deductions. Provides for pooling arrangements for such coverage for otherwise uncovered individuals. Deletes durational limits on and existing coinsurance requirements for hospital services under Medicare. Requires copayment of 10% of the cost of hospital care regardless of duration, except that once coinsurance payments under Parts A and B in one year reach 20% of income, all coinsurance requirements would cease. Introduced July 26, 1979; referred jointly to Committees on Finance, and Labor and Human Resources. 5. 1812 (Ribicoff)/H.R. 5400 (Rangel) (by request) The National Health Plan Act. Establishes a national program of protection against medical expenses for all Americans. Includes three principal components: (1) a new Federal insurance program called Healthcare (replacing Medicare and the acute care portion of medicaid) providing health care coverage for the aged, blind, disabled, low-income, and others unable to obtain private health insurance coverage at reasonable premium rates; (2) an "Rmployer—Guarantee through which employers would be mandated to provide employees with specified health benefits coverage and pay at least 75% of the premium cost; and (3) various health system reforms designed to enhance competition in the health care sector and reduce excess capacity W hospitals. Provides for a comprehensive benefit package and specifies that benefits covered under both Healthcare and the employer-mandated plans would be uniform. Provides that benefits for the poor would be fully subsidized. Limits cost- sharing for aged and disabled under Healthcare to $1,250 per year. Specifies that cost-sharing for other individuals and groups who buy into Healthcare would be $2,500. Specifies that benefits under employer-mandated plans would be subject to an annual $2,500 maximum limit on cost-sharing. Provides the following financing for Healthcare coverage: (1) present Medicare payroll tax, premiums, and general revenues for the aged and disabled; (2) Federal and State sharing for low-income; (3) community-rated premiums for individuals who buy-in; (H) lesser of community-rated premiums or 5% of payroll for small employer groups (below 10 persons); and (5) 5% of payroll for employer groups of 10 or more. Provides that employer-guaranteed plans would be financed through premium payments with Federal subsidies for employers whose premium payments attributable to minimum mandated benefits exceed 5% of payroll. Introduced Sept. 25, 1979. vs. 1812 referred jointly to Committees on Finance, and Labor and Human Resources. H.R. 5fl00 referred jointly to Committees on Interstate and Foreign Commerce, and ways and Means. Ii‘-i'A§lZ'.§§ U.S. Congress. Senate. Committee on Finance. Catastrophic health insurance and medical assistance reform. Hearings, Har. 27-29, 1979. Washington, U.S. Govt. Print. Off., 1979. 703 p. ---- Presentation of major health insurance proposals. Hearings, June 19 and 21, 1979. washington, 0.5. Govt. cns-1 1 IB79 oso UPDATE -03/03/so Print. Off., 1979. 527 p. n:§QE$§-éE2-§0N§B§§§LQflEL QQQEQEETS S. 350 and S. 351 ‘ Catastrophic Insurance and aedical Assistance Reform Act and Catastrophic Health Insurance Act. In Remarks of Russell B. Long and Abraham Ribicoff. Congressional record [daily ed.] v. 125, Feb. 6, 1979: 51129-1159. 5. 7&8 - Catastrophic Health Insurance and Medicare Improvements Act of 1979. In Remarks of Robert Dole, Pete V. Domenici, and John C. Danforth. Congressional record [daily ed.] v. 125, Mar. 26, 1979: S3297~3311. S. 760 — A bill to establish a catastrophic health insurance program. In Remarks of Russell B. Long. Congressional record [daily ed.] v. 125, Mar. 26, 1979: 53350-3361. U.S. Congress. Congressional Budget Office. Catastrophic health insurance. Washington, U.S. Govt. Print. 0ff., January 1977. 61 p. At head of title: Budget issue paper. -“*‘ Profile of health care coverage: The haves and have-nots. Washington, U.S. Govt. Print. Off., narch 1979. 57 p. At head of title: Background paper. 09/25/79 -- Senator Ribicoff and Representative Rangel introduced 5. 1812 and H.R. snoo on behalf of the Administration. O7/26/79 -- Senator Schweiker introduced 5. 1590. 06/20/79 -- Senate Finance Committee began consideration of A elements to be included in a catastrophic proposal. 06/12/79 --President Carter sent Congress a message outlining his proposal for a National Health Plan. O3/27/79 - O3/29/79 -iflearings held by Senate Finance Committee. 03/26/79 -- Senator Long introduced S. 760. -—-Senator Dole introduced 3. 7&8. 02/05/79 —— Senator Long introduced 5. 350 and s. 351. AD2LIlQEéL-§§§E§§§§E-§QEB§§§ Health Insurance Institute. Source Book of health insurance data 1977+78. Washington, D.C., n.d., 80 p. OF WASHlNGf2f§'ON UNIVERSITY ST. LOUIS - M0. 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