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This report summarizes the key provisions affecting private health insurance in America's Affordable Health Choices Act of 2009, found in Division A, as ordered reported by House Committees on Ways and Means, on Education and Labor, and on Energy and Commerce. Division A of H.R. 3200 focuses on reducing the number of uninsured, restructuring the private health insurance market, setting minimum standards for health benefits, providing financial assistance to certain individuals, and, in some cases, small employers. In general, H.R. 3200 would include the following:
Individuals would be required to maintain health insurance, and employers would be required to either provide insurance or pay a payroll assessment, with some exceptions. Several market reforms would be made, such as modified community rating and guaranteed issue and renewal. Both the individual and employer mandates would be linked to acceptable health insurance coverage, which would meet required minimum standards and incorporate the market reforms included in the bill. Acceptable coverage would include coverage under a qualified health benefits plan (QHBP), which could be offered either through the newly created Exchange or outside the Exchange through new employer plans; grandfathered employment based plans; grandfathered nongroup plans; and other coverage, such as Medicare and Medicaid. The Exchange would offer private plans alongside a public option. Certain individuals with incomes below 400% of the federal poverty level could qualify for subsidies toward their premium costs and cost-sharing; these subsidies would be available only through the Exchange. In the individual market (the nongroup market), a plan could be grandfathered indefinitely, but only if no changes were made to the terms and conditions of the plan, including benefits and cost-sharing, and premiums were only increased as allowed by statute. Most of these provisions would be effective beginning in 2013. H.R. The Exchange would not be an insurer; it would provide eligible individuals and small businesses with access to insurers' plans in a comparable way (in the same way, for example, that Travelocity or Expedia are not airlines but provide access to available flights and fares in a comparable way). The public health insurance option and the income-based premium and cost-sharing credits for certain individuals (described below) would be available only through the Exchange. Individual and Employer Eligibility for Exchange Plans

Under the Education and Labor as well as the Ways and Means versions of H.R. 3200 , the Secretary of Health and Human Services (HHS) would establish a public health insurance option through the Exchange. 3200 , the Secretary would be required to negotiate with medical providers to set payment rates, subject to limits. The Energy and Commerce version of H.R. Cooperatives

The Energy and Commerce version also would establish a federal grant and loan program to assist the establishment and initial operation of health insurance cooperatives. Such cooperatives would be state-licensed, non-profit, member-run organizations not sponsored by the state, and offer coverage through the Exchange. 3200 , Exchange-eligible individuals could receive a credit in the Exchange if they
are lawfully present in a state in the United States, with some exclusions; are not enrolled under an Exchange plan as an employee or their dependent (through an employer who purchases coverage for its employees through the Exchange and satisfies the minimum employer premium contribution amounts); are not a full-time employee in a firm where the employer offers health insurance and makes the required contribution toward that coverage; have modified adjusted gross income (MAGI) of less than 400% of the federal poverty level (FPL); and are ineligible for Medicaid, except for the few previously mentioned exceptions.
This report summarizes key provisions affecting private health insurance in H.R. 3200, America's Affordable Health Choices Act of 2009, as ordered reported by House Committees on Education and Labor, Ways and Means, and Energy and Commerce. Specifically, this report focuses on Division A (or I) of H.R. 3200 from those committees.
Division A of H.R. 3200 focuses on reducing the number of uninsured, restructuring the private health insurance market, setting minimum standards for health benefits, and providing financial assistance to certain individuals and, in some cases, small employers. In general, H.R. 3200 would require individuals to maintain health insurance and employers to either provide insurance or pay a payroll assessment, with some exceptions. Several insurance market reforms would be made, such as modified community rating and guaranteed issue and renewal. Both the individual and employer mandates would be linked to acceptable health insurance coverage, which would meet required minimum standards and incorporate the market reforms included in the bill. Acceptable coverage would include (1) coverage under a qualified health benefits plan (QHBP), which could be offered either through the newly created Health Insurance Exchange (the Exchange) or outside the Exchange through new employer plans; (2) grandfathered employment based plans; (3) grandfathered nongroup plans; and (4) other coverage, such as Medicare and Medicaid. The Exchange would offer private plans alongside a public option. Based on income, certain individuals could qualify for subsidies toward their premium costs and cost-sharing (deductibles and copayments); these subsidies would be available only through the Exchange. In the individual market (the nongroup market), a plan could be grandfathered indefinitely, but only if no changes were made to the terms and conditions of that plan, including benefits and cost-sharing, and premiums were only increased as allowed by statute. Most of these provisions would be effective beginning in 2013.
The Exchange would not be an insurer; it would provide eligible individuals and small businesses with access to insurers' plans in a comparable way. The Exchange would consist of a selection of private plans as well as a public option. Individuals wanting to purchase the public option or a private health insurance not through an employer or a grandfathered nongroup plan could only obtain such coverage through the Exchange. They would only be eligible to enroll in an Exchange plan if they were not enrolled in other acceptable coverage (e.g., from an employer, Medicare, and generally Medicaid). The public option would be established by the Secretary of Health and Human Services (HHS), would offer three different cost-sharing options, and would vary premiums geographically. For the public option, the Ways and Means and Education and Labor versions would have the Secretary set payments to health care providers based on Medicare payment rates, while the Energy and Commerce version would require the Secretary to negotiate rates with medical providers. The Energy and Commerce version also would establish a federal grant and loan program to assist the establishment and initial operation of health insurance cooperatives. Such cooperatives would be state-licensed, non-profit, member-run organizations not sponsored by the state, and offer coverage through the Exchange.
Only within the Exchange, credits would be available to limit the amount of money certain individuals would pay for premiums and for cost-sharing (deductibles and copayments). (Although Medicaid is beyond the scope of this report, H.R. 3200 would extend Medicaid coverage for most individuals under 133⅓% of poverty; individuals would generally be ineligible for Exchange coverage if they were eligible for Medicaid.)