Budget Bill Cuts into PPACA: Free Choice Vouchers to Be Eliminated

• Eliminate the Wyden Free Choice Vouchers: The bill will repeal the "free choice" voucher program that was championed by Senator Ron Wyden (D-OR) and set to become effective in 2014. Under the program, employers that offer coverage would have to provide a "free choice" voucher to certain employees - that is, to employees whose household income is not more than 400 percent of the federal poverty level (i.e., not more than $89,400 for a family of four in 2011) and have to pay more than 8 percent but not more than 9.8 percent of their household income for the employer's coverage. The voucher would be for the amount the employer would have paid toward the employee's coverage under the employer's plan, and would be used by the employee to purchase coverage through the Exchange (i.e., would be applied as a credit toward the monthly premium). Voucher amounts in excess of the premium would be paid to the employee as taxable income.
• Partially De-Fund the CO-OP Program: The bill will reduce to $3.8 billion the original $6.0 billion appropriated under the PPACA to fund the Consumer Operated and Oriented Plan (COOP) program, which is established to help create non-profit health insurance issuers to offer plans in the individual and small group markets.
• Require Accountability on the PPACA's Implementation and Costs: The bill will require several reports to be submitted to Congress in short order.
  1. Contract and Costs - Within 90 days of enactment, the Comptroller General will be required to submit a report on the costs and process of implementing the PPACA, including a list of the contracts, the names of contractors, and the amount of money expended on each contract entered into by the Department of Health and Human Services (DHHS) and other Federal departments and agencies.
  2. Mini-Med Waivers - Within 60 days of enactment, the Comptroller General will be required to submit the results of an audit of the requests for waiver of the annual limit requirements of the PPACA. Under the PPACA, for plan years beginning on or after September 23, 2010, the lowest permitted annual limit a group health plan can impose on the total dollar value of essential health benefits is $750,000 - and for plan years beginning after September 23, 2011, the lowest permitted annual limit is $1.25 million. A one-year administrative waiver of the requirement is available upon a showing to the DHHS that compliance will significantly decrease access to benefits or significantly increase premiums paid by those currently covered under the plan. For 2011, at least 733 applicants obtained a waiver (for at least one plan) according to a report released by the DHHS.
  3. Projected Premium Impact on Employer Plans - Within 90 days of enactment, the Chief Actuary of the Centers for Medicare & Medicaid Services will be required to submit a report estimating the effect, over the 10-year period beginning with 2014, of the PPACA's guaranteed issue, guaranteed renewal, and community rating requirements on premiums for individuals and families with employer-sponsored health insurance.
  4. Comparative Effectiveness Expenditures - Within 60 days of enactment, the Comptroller General will be required to submit the results of an audit of expenditures made for comparative effectiveness research through funds provided under the PPACA or the American Recovery and Reinvestment Act of 2009 to the Agency for Healthcare Research, the National Institutes of Health, or any other agency within the DHHS.

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Copyright 2011, Deloitte.

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