New Health Insurance Bill Introduced To Help Cover Catastrophic Medical Costs

Senators Gordon Smith (R-Ore.) and Ron Wyden (D-Ore.) recently introduced a bill (S 3701) at the national level that would create several pilot programs allowing states, including Texas, to offer uninsured residents health plans that provide basic coverage paired with catastrophic coverage for individuals who have high out-of-pocket health costs.

The bill would establish six pilot projects, for which states could apply through the Health and Human Services Department. At least two projects would create a “hybrid” health insurance plan that would combine primary and preventive care coverage with high-deductible catastrophic coverage. Private health insurance companies could market this plan to both uninsured individuals and small businesses. There are at least two other projects, which would help privately insured individuals who have out-of-pocket costs that exceed $10,500 annually.

The proposed legislation also would provide for gradual subsidization of plan premiums for workers with annual incomes below 200 percent of the federal poverty level and would allow catastrophic coverage through high-risk pools, reinsurance mechanisms for small businesses and other public-private agreements. According to one source, the coverage could help small businesses extend their health care benefit offerings.

Along with President Bush’s healthcare proposal and this new health insurance bill, there is an increasing likelihood that the federal government may take steps to address the healthcare crisis facing our country. One thing is clear: individuals need to take a more active role in selecting their health insurance plans and managing their health care costs.

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