Long-Term Cost of the Amercica's Healthy Future Act of 2009
As Passed by the Senate Finance Committee
In this study we estimate the impact of The America’s Healthy Future Act as adopted by the Senate Finance Committee. The Act would require most Americans to have health insurance. To assure access to affordable coverage, the Bill expands the Medicaid program to 133 percent of the Federal Poverty Level (FPL) for all adults. It also provides a new premium tax credit for people living between 133 percent and 400 percent of the FPL (e.g., $88,000 for a family of four).
In addition, the Act establishes an “exchange” that presents consumers with a selection of health coverage alternatives that is available to individuals and firms with fewer than 100 workers. States would have the option to extend eligibility to larger employers beginning in 2017. Only people participating in the exchange who do not have access to employer coverage would be eligible for the premium tax credit. The Act also reforms insurance markets by assuring guaranteed issue of coverage and prohibiting plans from varying premiums with health status.
Employers with more than 50 workers are required to pay a penalty for each uninsured worker receiving a premium tax credit through the exchange. The Act also provides an employer health insurance tax credit for up to two years for firms with fewer than 25 workers with an average employee earnings of less than $40,000. Workers offered coverage by an employer are not eligible for premium subsides offered in the exchange unless the cost of employer coverage exceeds 10 percent of income.
The Act is funded with reductions in spending under Medicare and Medicaid, a new excise tax on high cost health plans (premiums over $8,000 for individuals and $21,000 for families). It also includes a second excise tax on insurance, new excise taxes on branded prescription drugs and device manufacturers, and other changes in revenues.
In this study we provide estimates of the program’s impact on coverage and spending for the federal government, state and local governments, private employers and consumers. To demonstrate the long-term impact of the Act, we provide estimates for a 20-year period from 2010 through 2029.
