S 79

S 79 IS

To amend the Social Security Act to establish a Federal Reinsurance Program for Catastrophic Health Care Costs.

January 6, 2009

Mr. KERRY introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Social Security Act to establish a Federal Reinsurance Program for Catastrophic Health Care Costs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Healthy Businesses, Healthy Workers Reinsurance Act of 2009’.

SEC. 2. FINDINGS.

Congress finds the following:

(1) The cost of health insurance premiums for families has risen 100 percent since 2000, 4 times the growth in overall inflation and workers’ earnings.

(2) Health insurance premium increases have resulted in a nearly 6 percentage point drop in the number of firms choosing to offer coverage to their workers over that time period.

(3) Today, just 49 percent of firms with between 3 and 9 employees offer health insurance benefits, down from 58 percent in 2001.

(4) The decline in employer-sponsored coverage has added to the growing problem of the uninsured. An additional 5,000,000 Americans have been added to the ranks of the uninsured since 2001.

(5) Health care costs are highly concentrated. Catastrophically or chronically ill individuals account for nearly 80 percent of health care spending, with 10 percent of individuals accounting for over 60 percent of spending, and just 1 percent driving over 20 percent of health care costs.

SEC. 3. FEDERAL REINSURANCE PROGRAM FOR CATASTROPHIC HEALTH CARE COSTS.

(a) Program- The Social Security Act (42 U.S.C. 301 et seq.) is amended by adding at the end the following new title:

‘TITLE XXII--FEDERAL REINSURANCE PROGRAM FOR CATASTROPHIC HEALTH CARE COSTS

‘SEC. 2201. OFFICE OF FEDERAL REINSURANCE.

‘(a) In General- There is established within the Department of Health and Human Services an office to be known as the ‘Office of Federal Reinsurance’.

‘(b) Duty- The Office of Federal Reinsurance shall establish and administer the Federal Reinsurance Program for Catastrophic Health Care Costs in accordance with the provisions of this title.

‘SEC. 2202. PROGRAM.

‘(a) Establishment-

‘(1) IN GENERAL- The Office shall establish and administer a Federal Reinsurance Program for Catastrophic Health Care Costs under which reinsurance payments are provided to eligible health plans that experience catastrophic health care costs during a year with respect to an individual covered under the plan. For purposes of this title, the term ‘individual covered under the plan’ includes employees, retirees, spouses, and dependants.

‘(2) PROGRAM TO BEGIN IN 2010- The Office shall establish the Program in a manner so that reinsurance payments are made with respect to catastrophic health care costs occurring on or after January 1, 2010.

‘(3) ELIGIBLE HEALTH PLAN-

‘(A) IN GENERAL- In this title, the term ‘eligible health plan’ means any of the following:

‘(i) A group health plan that meets the requirements described in subparagraph (B).

‘(ii) A governmental plan (as defined in section 3(32) of the Employee Retirement Income Security Act of 1974) that meets the requirements described in subparagraph (B).

‘(iii) A multiemployer plan (as defined in section 3(37) of the Employee Retirement Income Security Act of 1974) that meets the requirements described in subparagraph (B).

‘(iv) A plan that offers coverage through health purchasing cooperatives in conjunction with a State health program that makes available health insurance coverage to the small group market and the individual market on the same terms and that meets the requirements described in subparagraph (B).

‘(B) REQUIREMENTS- The requirements described in this subparagraph are that--

‘(i) the plan involved--

‘(I) provides eligibility for health insurance coverage (after any waiting period (as defined in section 9801(b)(4))) to all full-time employees of the employer maintaining or contributing to the plan;

‘(II) ensures that if there is a deductible under the plan, such deductible does not exceed $1,000 for an individual and $2,000 for a family;

‘(III) ensures that the plan offers preventative benefits; and

‘(IV) ensures that the plan employs effective high-cost case management tools (in accordance with the definition of disease management by the Disease Management Association of America) in order to reduce costs over time; and

‘(ii) the employer maintaining or contributing to the plan involved pays at least 50 percent of the costs of health insurance coverage for each employee covered under the plan (regardless of whether the employee is a full-time or part-time employee).

‘(C) COST-OF-LIVING ADJUSTMENT-

‘(i) IN GENERAL- In the case of any calendar year after 2010. each dollar amount in subparagraph (B)(ii) shall be increased by an amount equal to--

‘(I) such dollar amount, multiplied by

‘(II) the cost-of-living adjustment determined under section 1(f)(3) of the Internal Revenue Code of 1986 for such calendar year determined by substituting ‘calendar year 2009’ for ‘calendar year 1992’ in subparagraph (B) thereof.

‘(ii) DATE FOR DETERMINATION- For purposes of clause (i), section 1(f)(4) of such Code shall be applied by substituting ‘March 31’ for ‘August 31’, and the Secretary of the Treasury shall publish the adjusted amounts under subparagraph (B)(ii) for the calendar year not later than June 1 of the preceding calendar year.

‘(iii) ROUNDING- If any increase under clause (i) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50.

‘(D) EMPLOYER- For purposes of this title, the term ‘employer’ includes the Federal government and any other governmental entity (within the meaning of section 5000(d) of Internal Revenue Code of 1986).

‘(b) Enrollment-

‘(1) PROCEDURES- The Office shall establish procedures for the enrollment of eligible health plans in the Program.

‘(2) APPLICATION AND ANNUAL RECERTIFICATION-

‘(A) IN GENERAL- The procedures established under paragraph (1) shall include a process for an eligible health plan--

‘(i) to submit an application to the Office for enrollment in the Program; and

‘(ii) to be annually recertified for enrollment in the Program.

‘(B) REQUIREMENT- The application and recertification process under subparagraph (A) shall require that an eligible health plan submit to the Office--

‘(i) a detailed description of the projected and actual reduction in total costs under the plan that are a result of the Program, including both individual and employer portions; and

‘(ii) such other information determined appropriate by the Office.

‘(3) APPROVAL-

‘(A) IN GENERAL- The procedures established under paragraph (1) shall provide for the approval or disapproval of applications and requests for recertification submitted by eligible health plans under paragraph (2).

‘(B) SPECIFIC REQUIREMENT- The Office shall not approve an application or a request for recertification unless the Office finds that the eligible health plan is reducing total costs under the plan, based on the information submitted under paragraph (2)(B) and audits conducted under paragraph (4).

‘(4) AUDITS- The Office shall conduct audits of claims data of eligible health plans in order to ensure that the eligible health plan is in compliance with the requirements under the Program, including the requirement under paragraph (3)(B). An eligible health plan shall not be eligible for reinsurance payments unless it provides the Office with access to such data.

‘(c) Cost-Sharing in Costs of Program-

‘(1) IN GENERAL- An eligible health plan that participates in the Program shall pay the fee established by the Office under paragraph (2).

‘(2) AUTHORIZATION- The Office is authorized to charge a fee to each eligible health plan that participates in the Program. Any amounts collected shall be deposited into the Trust Fund.

‘(3) REQUIREMENTS- In establishing the fee under paragraph (2)--

‘(A) the Office shall consult with interested parties; and

‘(B) shall ensure that the amount of such fee is not excessive so as to unduly discourage eligible health plans from enrolling in the Program.

‘(d) Appeals Process- The Office shall establish an appeals process under the Program.

‘(e) Procedures To Protect Against Fraud, Waste, and Abuse- The Office shall establish procedures to protect against fraud, waste, and abuse under the Program.

‘SEC. 2203. REINSURANCE PAYMENTS.

Full Text of Legislation