Top Things to Know About Community Health Insurance

Community health insurance is an important component of the health care reform bill. It is intended to keep health costs down, expand coverage, and provide American families with options, other than for-profit insurance companies, from which to choose.

Community health insurance is a public health insurance option, a means to reform insurance, backed by the federal government, and is intended to provide health insurance options for the public good, rather than for private profit.

Here are the top things to know about community health insurance:

It is a Health and Human Services based plan.

Community health insurance would be run by the Department of Health and Human Services. The government would pay for the first three months of insurance claims. These payments would be a loan, and would be repaid to the government over time. Over the first two years, or longer if needed, community health insurance would qualify for risk corridor protection. Like Medicare Part D, community health insurance's excessive losses or gains would be offset during the initial start up period. Premiums would be set to make community health insurance self-sufficient and would make community health insurance available quickly in all areas of the country.

Same rules apply.

Community health insurance would be offered as a Gateway option. In following the same rules as private plans, community health insurance would also be required to define benefits, protect consumers, and set premiums based on local costs.

Provider payments and negotiations.

Community health insurance will pay no more than private insurers already pay, however, these payments could be less than what private insurers are currently paying. These rates will be negotiated with the Secretary of Health and Human Services.

Each state will be responsible for appointing a council of providers and consumers which will recommend strategies for improvements and cost savings. The states will share, monetarily, in any savings that result from these recommendations.

Providers will not be obligated to participate in the community health insurance option.

Community health insurance will be affordable because:

It will provide a nationwide pool of consumers who will be able to leverage lower rates than private insurers offer.

It will provide for lower overhead costs. Since there will be no need to support shareholder profits, excessive marketing, or provisions to protect enrollees from private plan insolvency or fund mismanagement, premiums will not need to be raised.

Finally, since the Secretary will be negotiating rates and reimbursements, quality of care and best practices will be promoted. In turn, this will provide financial bonuses for success to the state advisory councils.