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Health Freedom Watch
July 2009


House Health-Reform Bill Establishes “Real Time” Data System to Determine Financial Responsibility and Eligibility for Health Care

The House’s health-reform bill released today (July 15)—titled “America’s Affordable Health Choices Act of 2009”—includes provisions for the federal government to establish data standards for:

  • determining one’s “financial responsibility at the point of service” and
  • deciding one’s eligibility to seek a “specific service” from a “specific physician” at a “specific facility.” 

The section of the bill titled “Standards for Financial and Administrative Transactions,” reads: 

“(D) enable the real-time (or near real-time) determination of an individual’s financial responsibility at the point of service and, to the extent possible, prior to service, including whether the individual is eligible for a specific service with a specific physician at a specific facility, which may include utilization of a machine-readable health plan beneficiary identification card;…” [Emphasis added.]  See page 58 of the House's health-reform bill (H.R. 3200).

The Congressional Budget Office’s 14-page analysis of the 1,018-page bill is posted here.

Please read this analysis and share your own comments with your Representative soon!  The Capitol Hill switchboard number is (202) 225-3121.

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Senate “Affordable Health Choices Act” Includes $723 Billion for Health-Insurance Exchanges

On July 2 Democratic senators on the Health, Education, Labor, and Pension (HELP) Committee released its final health-care reform bill.  After amending the bill, it was voted on and passed (13-10) by the full Committee today (July 15).  The Affordable Health Choices Act purports to cover 21 million uninsured by 2019 at a cost of $597 billion over ten years.  That’s an average of $28,429 per person over 10 years, or $2,843 per person a year.  (Per capita U.S. health spending in 2007 was $7,421.)

The largest share of the spending would be $723 billion over ten years for subsides to health-insurance exchanges.  This would be offset by increases in tax revenues ($10 billion), reductions in Medicaid and SCHIP outlays ($36 billion), payments by uninsured individuals ($36 billion), employer penalties ($52 billion), and other provisions.

Employers with 25 or more employees would be required to offer adequate insurance coverage and pay for at least 60 percent of the monthly premiums, or face a penalty.  The penalty would be $750 a year for each full-time employee and $375 a year for each part-time employee without coverage.  The committee projects $52 billion from such fines over ten years.  That amounts to fines for some 6.9 million to 13.9 million workers per year.

What’s more, the Congressional Budget Office (CBO) notes that the committee’s reform price tag does not include federal administrative costs or account for all costs of establishing and operating insurance exchanges, effects on other federal programs and other proposals on the costs of coverage, or “potential effects on corporate tax revenues.”

Additionally, the CBO notes that “The proposal would also impose a financial cost [penalty] on most people who do not obtain health insurance, the size of which would be set by the Secretary of the Treasury.”

The Act’s amended version also includes a Community Health Insurance Option (public insurance option) administered by the Department of Health and Human Services and available through the health-insurance exchanges. 


  • "Obama Shifts Into Campaign Mode on Health Care, By Ricardo Alonso-Zaldivar and Ben Feller, Associated Press, July 15, 2009.
  • “Senate HELP Democrats Unveil Final Coverage Provisions Costing $600 Billion,” BNA’s Health Care Policy Report, July 6, 2009.
  • Congressional Budget Office, “Preliminary Analysis of Title I of the Affordable Choices Act,” July 1, 2009:$File/CBO%20HELP.pdf
  • Congressional Budget Office letter to Senate HELP Committee, June 15, 2009.
  • “Affordable Health Choices Act,” Senate HELP Committee, July 2009:

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National ID for Health Insurance and Other Provisions Included in Senate HELP Committee Health-Reform Bill

In addition to the insurance mandates and public option cited above, additional provisions in the Senate HELP Committee’s “Affordable Health Choices Act” that may be of interest to health-freedom advocates include:

  • National health plan identifier:  The bill reads, “Not later than 1 year after the date of enactment of this section, the [HHS] Secretary shall promulgate a final rule to establish a National Health Plan Identifier system.”
  • Reporting of insurance status:  Every entity providing health insurance would be required to report to the federal government:
    • the name, address and taxpayer ID number of each individual covered,
    • the number of months during the calendar year each individual was covered, and
    • “such other information as the Secretary may prescribe.”
  • A requirement of IRS notice to taxpayers not enrolled in health plans of services available through the new exchanges.
  • Creation of a new federal agency to “encourage, as appropriate, the development and use of clinical registries and the development of health outcomes research data networks from electronic health records, post marketing drug and medical device surveillance efforts, and other forms of electronic health data….” (Emphasis added.)
  • An amendment to the Public Health Service Act’s HIT [Health Insurance Technology] Policy Committee: “The use of certified electronic health records to collect and report quality measures accepted by the Secretary.” (Emphasis added.)
  • Grants to establish community teams to support a medical home model:  The bill would provide for capitated payments to teams of health-care providers led by primary-care physicians.  It notes that “such team[s] may include specialists, nurses, nutritionists, dieticians, social workers, behavioral and mental health providers, licensed complementary and alternative medicine practitioners…” (Emphasis added.)

Source:  “Affordable Health Choices Act,” Senate HELP Committee, July 2009:

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Is Medicare More Efficient than Private Insurance?

Some single-payer advocacy groups, once again, are pushing a “Medicare-for-all” plan, claiming that Medicare is the most efficient health-care system in the U.S.  But Americans should consider the following facts before endorsing such reform:

  • The White House recently reported that “The Government Accountability Office (GAO) has labeled Medicare as ‘high risk’ due to billions of dollars lost to overpayments and fraud each year.”1
  • Medicare waste, fraud, and abuse amounts to approximately $10.2 billion annually, or 3.7 percent of expenditures.2
  • More than 1 out of 10 Medicare claims are denied each year (approximately one billion Medicare claims are filed annually; 158 million Medicare claims were denied in 2004).3
  • Medicare beneficiaries with fair or poor health status, or age 85 and older, spend almost 30 percent of their income on uncovered medical care.4
  • One out of ten Americans who were bankrupted by illness were covered by Medicare.5 

1. “President Obama's Fiscal 2010 Budget: Transforming and Modernizing America’s Health Care System,” Office of Management and Budget, 2009 (link active July 10, 2009):

2. “Medicare Claim Review Programs: MR, NCCI Edits, MUEs, CERT, and RAC,” Center for Medicare & Medicaid Services, October 2008:  3. Government Accountability Office (GAO), “Medicare: Concerns Regarding Plans to Transfer the Appeals Workload from SSA to HHS Remain”, Report # GAO-05-703R, June 30, 2005: 

4. “Medicare Out-of-Pocket Costs: Can Private Savings Incentives Solve the Problem?” The Commonwealth Fund, March 24, 2008: 

5. “Medical Bankruptcy in the United States, 2007: Results of a National Study,” by David U. Himmelstein, MD, Deborah Thorne, PhD, Elizabeth Warren, JD, Steffie Woolhandler, MD, MPH, The American Journal of Medicine, 2009: 

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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2009 Institute for Health Freedom.