Baucus Health Reform Bill – Quick Overview on Disability Issues

Max Baucus - Senate Finance Committee

Max Baucus - Senate Finance Committee

Obviously, I am buried under health reform these days but I wanted to send out a few quick bullet points about the Baucus health reform bill that might be of interest to people with disabilities.  I’ve always said that comprmise is where everybody goes away unhappy.  Max Baucus’ health reform bill from the Senate Finance Committee claims to “ensure this package works for patients, for health care providers and for our economy” and right now, it looks like everyone is unhappy with this supposedly middle-ground legislation.

General Comments:

Coming in with a price tag of just $880 billion dollars, it is the cheapest of the health reform bills. It does this by offering less in subsidies for low-income individuals to buy health insurance, has higher deductibles and levies higher penalties for people who don’t buy insurance.

Everyone would be required to obtain health coverage or pay an annual penalty depending on their income level. However, in his bill a family of four living on $66,000 a year would not receive any additional subsidy or support and would have to pay $8,600 for health insurance. That is not including the $2,000 deductible. And if they don’t, or can’t, they have to pay a $3,800 fine.

Almost 30 percent of adults with disabilities live in households with an income of $15,000 or less compared to only 12 percent of those without disabilities. Approximately 36 percent of children with disabilities live in families earning less than $25,000 a year. In addition, a journal article a few years ago reported on a study about how much individuals with disabilities can end up spending on other disability-related services that may not be fully reimbursed (personal assistant services being one of the examples mentioned). They came up with an additional $20,000 that families with a member with a disability may pay.

Businesses with 50 or more employees that do not offer coverage will be required to reimburse the government for tax credits given to employees purchasing their own insurance. This is one of those points where I like to remind everyone why it is critical to always review all the language in legislation, not just do a word-search for “disability.” What the above language does, is that it discourages employers from hiring anyone who may qualify to receive a government tax credit, because the employer would then have to pay back the government.

Let me give you an example: An employer can choose between two job applicants – one is a single mother with two children, and the other is a married woman who gets her health insurance through her husband. The single mother probably qualifies for a government tax credit, so she’d actually cost them more. Now consider this issue with someone with a disability. People with disabilities usually do not have the option of going without coverage because of their conditions. In addition, on the average, people with disabilities earn less than individuals without disabilities. What that means is that likely someone with a disability would qualify for or would be percieved as being able to qualify for the government’s health insurance tax credity. The company wouldn’t hire them, and in a tight economic market, would fire them first. Why? Because they now would cost more.

Insurance companies can not drop someone because of a pre-existing condition or impose annual caps or lifetime limits on coverage. However, insurance companies can charge higher premiums for older adults. More than five times higher premiums. Why is this an issue? Because, as they age, the vast majority of people acquire disabilities or chronic conditions. Allowing insurance companies to charge higher premiums may lead to “back-door” discrimination against people with disabilities and pre-existing conditions.

Rehabilitation and habilitation services, therapies, and durable medical equipment and devices are not included under the minimum benefits package. I see this as a big problem. Rehabilitative and habilitative services can be critical to someone with a disability or mental health condition. They are necessary to restore functional capacity, minimize limitations on physical and cognitive functions, and maintain or prevent deterioration of functioning as a result of an illness, injury, disorder or other health condition. These services are also vital to the prevention of secondary disabling conditions.

All newly-eligible, non-pregnant adults within Medicaid would receive a benchmark benefit package consistent with section 1937 of the Social Security Act. What that means is that Medicaid benchmark plans will provide only 75 percent of the actuarial value of coverage for mental health services.

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, which passed last October, requires health plans that offer mental health coverage to have the same benefits, copayments, and treatment limits as for other types of health care. Mental health conditions are the leading causes of disability, representing more than 57 million Americans. Research has shown that 25 percent of Americans do not have adequate access to mental health services and 44 percent either do not have mental health coverage or are not sure if they do. The bill language would seem to contadict the requirements of the mental health parity legislation.

There is a lot more in the bill (and not in the bill) that requires careful review and discussion including expansions of Medicaid, Medicare buy-ins, the creation of health co-ops, pevention, home and community based services and more. Amendments to the Chairman’s Mark were due at five p.m. today and Senator Baucus promises to get the bill through the Senate Finance Committee within the next week.

Stay tuned, things are just getting started!

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