H.R. 1200 (McDermott)

Target population(s)
All individuals (universal coverage).

Public program(s) affected
Benefits provided under Medicare, Medicaid and SCHIP would terminate after December 31, 2010. Patients receiving care through these programs at that time would be guaranteed continuity of benefits and transitioned to the new state-based system. FEHBP and TRICARE would also be superseded by the new program. Eligibility for benefits and services under the VA and Indian Health Service programs would continue, however.

Eligibility
U.S. residents who are citizens or nationals or lawful aliens are entitled to health benefits.  Other individuals, such as aliens admitted to the U.S. as non-immigrants, could be made eligible for benefits by the American Health Security Standards Board that would be established by the legislation.

Type of coverage
Comprehensive benefits would include the following services: hospital and physician services, services provided by other trained practitioners, community-based primary health and preventive services, long term, acute and chronic care services, prescription drugs and biologicals, dental, mental health and substance abuse services, diagnostic tests, outpatient therapy, durable medical equipment, home dialysis, emergency ambulance services, prosthetic devices, and other services specified by the board.  There would be no deductibles, coinsurance or copayments for acute care and preventive benefits.  States and employers are permitted to provide additional benefits at their own expense.  Cost-sharing for long term care would be 20% for home and community based services and 35% for nursing facility services.  Cost sharing would be reduced for those with annual income below 200% of the federal poverty level.

Premiums
There would be no premiums for covered benefits.  Any premiums charged for additional benefits must be reasonable.

Financing
Financing would be shared federal and state with the federal government contributing an average 86% of costs (between 81 and 91% per state, depending on per capita income and revenue capacity).  A national health care security budget would be established, which could grow no faster than the Gross Domestic Product.  States would receive funds on a capitated basis, adjusted for economic and social conditions as well as health status.  Funding would come from an 8.7% employer payroll tax and a 2.2% individual income tax.  Would create a new American Health Security Trust Fund.  Appropriates to the Trust Fund the revenues from the new taxes in the bill as well as amounts that would have been appropriated for Medicare (except for beneficiary premiums), Medicaid, FEHBP, TRICARE, the maternal and child health program, and other federal programs that provide payment for services that would be covered under the Act.  Medicare Trust Fund balances are transferred to the new Trust Fund.

Effective date
Coverage would be effective beginning January 1, 2011.

Administration
The program would be administered by a new American Health Security Standards Board composed of the Secretary and six other individuals appointed by the President with the advice and consent of the Senate. The Board would develop policies and procedures to implement the provisions of the bill, including those related to eligibility, enrollment, benefits, provider participation and reimbursement, determination of medical necessity and appropriateness with respect to coverage or services, national and state funding levels and more.  The Board would also establish annually a national health security budget specifying the federal expenditures under the Act for the year and the allocation of such expenditures to the states. Provides for reporting and other duties of the Board.

Other provisions in bill
Includes other health system provisions to address health care quality, health professions education, public health, health outcomes research and school health services.