Below is a summary of Title I proposed in Paul Ryan's Roadmap. Over the next several days, let's consider its provisions and likely consequences for America.
TITLE I: HEALTH CARE REFORM
* Refundable Credit for Health Insurance Coverage. Provides a flat, refundable income tax credit for individual and family purchase of health insurance. The credit may not be used by those enrolled in Medicare or a military health coverage plan.
- CREDIT AMOUNT. The tax credit equals $2,300 for individual tax filers
and $5,700 for joint filers and families.
- REFUNDABLE AND ADVANCEABLE. The credit is refundable, and therefore available to low-income persons with no tax liability. Credit also is “advanceable,” enabling individuals to purchase coverage at the beginning of a year, rather than waiting for their tax returns.
- ASSIGNABLE. The credit would be forwarded directly to the insurer of the tax credit recipient’s choice, leaving the balance, if any, refunded or billed to the recipient.
- INFLATION ADJUSTMENT. The credit is adjusted for inflation: specifically, by an average of consumer price index and the percentage increase in the medical care component of the consumer price index.
* Repeal of Employer Exclusion for Group Health Insurance. Repeals, for purposes of income taxes, the current-law exemption of employer-sponsored health coverage. Employers that continue to provide group health insurance to employees continue to claim contributions as a business expense deduction.
* Other Tax Components. Retains current-law tax preferences for Health Savings Accounts. Retains the 7.5-percent itemized deduction for medical expenses, but provides that taxpayers who claim the new health care tax credit may not take into account premiums for such coverage for purposes of the tax deduction.
* Portability. Allows individuals to carry personally owned insurance through changes of jobs or residences.
* Interstate Purchasing. Allows individuals who reside in one State to buy a more affordable health insurance plan in another State. Likewise, health insurance plans would be able to sell their policies to individuals and families in every State, as other companies do in every other sector of the economy.
* Small Business Relief. Allows small businesses to pool together nationally to offer coverage to their employees through association health plans [AHPs]. Plans are regulated at the Federal level and would have advantages similar to those of larger employer plans.
* Health Information Technology. Establishes a market-driven National Health Information Network, providing for individual ownership of medical records, and transitioning the health care industry from paper-based medical records to electronic medical records.
* Transparency. See details in the Medicare component of this legislation.
* State-Based Health Exchanges.
- Requires States to contract with health insurance plans or third-party administrators to run exchanges.
- Encourages States to form inter-state compacts, increasing their negotiating abilities and enhances risk-pool sizes.
- Requires exchanges to offer insurance plans with the same standard health benefits available to Members of Congress.
- Requires all health plans on an exchange to provide annual open enrollment periods and enroll newly eligible individuals.
- Prohibits plans offers through an exchange from discriminating based on pre-existing conditions, and allows individuals to opt out of health care.
Exchange requirements include:
- AUTO-ENROLLMENT. Each State is to develop auto-enrollment health insurance procedures (similar to those for dual-eligibles under the Medicare Modernization Act) for previously eligible Medicaid recipients.
- HIGH RISK POOLS. Funds are to be used to help low-income individuals and families (as defined by the State) and high-cost individuals and families (those for whom insurance is unavailable or highly expensive due to health status) purchase qualifying insurance. Eligible expenses shall include, but not be limited to, direct assistance with premiums and cost-sharing for low-income and/or high-cost families.
- REINSURANCE MECHANISMS. Each State is to establish and finance reinsurance mechanisms, ensuring high risk pools are adequately funded and that individuals receiving coverage through high risk pools are not subject to prohibitively high premiums.
- TRANSPARENCY NETWORKS. Each State is to establish and maintain a network designed to improve consumer information, transparency in price and quality data, and reductions in transition costs associated with health insurance enrollment.
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