On July 15, 2009, the Senate Committee on Health, Education, Labor, and Pensions (HELP) approved its health reform plan, the “Affordable Health Choices Act,” on a party-line 13-to-10 vote. In addition to significant insurance reforms, including a public health plan option, the legislation addresses a variety of other health policy issues, such as health care quality, health care workforce issues, preventive care, chronic care management, and a regulatory approval process for follow-on biologicals. The major features of the legislation are outlined below.

• Insurance Market Reforms: The bill includes various insurance market reforms, including guaranteed issue/renewability, a ban on pre-existing condition exclusions or lifetime/annual benefit limits, and a continuation of dependent coverage for children until the age of 26. Premium payments within each market may vary only by family structure, geographic region, actuarial value of benefits, tobacco use, and age (with limitations). Rates may not be based on gender, class of business, or claims experience. Health insurance policies would include incentives for care coordination, chronic disease management, and other health promotion activities, and cost-sharing would be limited for certain preventive services. These provisions would not apply to plans with enrollment prior to enactment, collective bargaining agreements ratified prior to enactment, or self-insured group health plans.
• Access to Insurance. The bill would establish an “Affordable Health Benefit Gateway” in each state to help qualified individuals and employer groups to purchase affordable health insurance. The Gateways must offer plans providing “essential health care benefits” meeting affordability standards and minimum coverage standards (states could require additional benefits but must assume additional costs). The bill also would establish a public health plan, dubbed the Community Health Insurance Plan, to ensure access to the essential health benefits package. The Secretary would be required to negotiate rates for provider reimbursement under the Community Health Insurance Plan, which may not be higher than the average of all Gateway reimbursement rates.
• Affordability of Coverage. The legislation would establish a new subsidy structure to support the purchase of private health insurance, including premium assistance and cost sharing limits. Credits will be provided on a sliding scale based on income (up to 400 percent of the poverty level) to enable families to purchase essential health care benefit plans through the Gateway. Credits also will be available for small businesses that pay 60 percent or more of their employees’ health insurance premiums.
• Insurance Mandates. Under the legislation, individuals would be required to have health coverage that meets minimum standards or face a financial penalty of up to $750 per year (with exemptions for individuals unable to access affordable care). Fees also would be assessed on employers who do not provide qualifying coverage for full- and part-time employees (with an exemption for employers with 25 or fewer employees).
• Improving Access to Health Care Services. Among other things, the legislation would increase spending for Federally Qualified Health Centers, the National Health Service Corps, and community-based mental and behavioral health services. A temporary reinsurance program would be created to reimburse employers who provide health benefits to retirees not yet eligible for Medicare in states without Gateways. The legislation also would create the Community Living Assistance Services and Supports (CLASS) program, a national insurance program financed through voluntary payroll deductions that would assist individuals unable to perform two or more functional activities of daily living. Under the CLASS program, cash benefits would be paid into a Life Independence Account to purchase nonmedical services and supports needed to maintain a beneficiary’s independence at home or in another residential setting, including home modifications, assistive technology, transportation, homemaker services, respite care, personal assistance services, home care aides, and added nursing support.
• Health Care Quality and Wellness. The legislation would require the HHS Secretary to establish a national strategy and support infrastructure to improve the quality of the U.S. health care system. Among other things, this strategy would include the development and dissemination of quality measures and the identification of best practices; improved care coordination; and updated standards for electronic health data interchange. In addition, the proposal would expand federal preventive health and wellness efforts through a new National Prevention, Health Promotion and Public Health Council. Funding also would be provided to, among other things: increase access to primary medical, dental, and behavioral health care services, particularly for targeted populations; promote community health and prevention efforts focusing on chronic diseases; support vaccination efforts; and identify and disseminate best practice information related to prevention and health impact assessments. The legislation also mandates that the FDA determine the usefulness of prescription drug fact boxes in advertising and other forms of communication.
• Health Care Workforce. The legislation includes a number of mechanisms to expand the health care workforce, enhance health care workforce education and training, and support the existing health care workforce. Among other things, a National Health Care Workforce Commission would be established to advise Congress on how to align federal health care workforce resources with national needs, and funding would be provided through a series of grant, scholarship, and loan programs.
• Fraud & Abuse Provisions. The legislation would establish a new Senior Advisor for Health Care Fraud within HHS and a Senior Counsel for Health Care Fraud Enforcement within the Department of Justice to coordinate each department’s health care fraud efforts. A Health Care Program Integrity Coordinating Council also would be created to provide additional federal health integrity coordination. The bill would strengthen enforcement authorities related to Multiple Employer Welfare Arrangements (MEWAs), including adding three crimes related to MEWAs to the list of federal health care offenses and prohibiting certain false statements in marketing materials. The bill also would create an optional federal privilege that would cover all confidential communications among state regulators (and the NAIC) and federal regulators to conduct regulatory oversight of covered entities. (Currently, entities must enter into a Memorandum of Understanding to protect such confidential communications.)
  Medical Therapies (Follow-on Biologicals & 340B Program). The legislation would establish a pathway for the licensure of a biological product based on similarity to a previously-licensed biological product (reference product). The FDA could not approve an application as biosimilar or interchangeable biological until 12 years from the date on which the reference product is first approved. In addition, if the FDA approves a biological product on the grounds that it is interchangeable to a reference product, no determination may be made that a second or subsequent biological product is interchangeable to that same reference product until one year after the first commercial marketing of the first interchangeable product. The legislation also includes provisions addressing patent infringement issues. Moreover, the bill includes a number of provisions that would modify the 340B Program, which allows certain safety-net providers to access discounts on pharmaceuticals. For instance, the bill would: expand the types of facilities eligible to participate in the drug discount program; address drugs used in connection with inpatient services, including allowing enrolled hospitals to obtain inpatient drugs through a group purchasing agreement or the 340B Prime Vendor Program; require enrolled hospitals to provide a credit to each state based on the estimated annual costs of covered drugs provided to Medicaid recipients for inpatient use; require the Secretary to enhance compliance with program requirements; establish an administrative process to resolve claims by covered entities and manufacturers regarding program violations; and clarify the ceiling price used to sell to 340B participants.

Note that the HELP Committee does not have jurisdiction over Medicare or Medicaid; provisions impacting those programs will be included in the Senate Finance Committee health reform bill, which is expected to be released in the coming days. After Finance Committee action, the two Committee packages then will be combined for consideration by the full Senate. In the meantime, three House Committees have begun markup of their updated, unified health reform plan.