MINNEAPOLIS, October 29, 2009 – House Democratic leaders unveiled a health care reform bill Thursday that includes a government-run insurance plan that would negotiate rates with doctors and hospitals instead of basing them on current Medicare payments.

In July, the MMA issued a policy statement saying that it would oppose any reforms based on the current, flawed Medicare payment system. The current system penalizes physicians in Minnesota because it often pays them less than what it costs them to deliver care. An earlier House bill included a public option that based physician pay on Medicare rates plus 5 percent.

The House bill, like the Senate bill, does not fix Medicare’s broken SGR formula, which will result in physicians seeing a 21 percent rate cut in January. However, the House also unveiled H.R. 3961, the Medicare Physician Payment Reform Act . This bill would repeal Medicare's sustainable growth rate, or SGR, formula and replace it with a payment system that provides for more predictable updates from Medicare.

According to news reports, the 1,990-page health care bill would extend coverage to 36 million Americans and cost nearly $900 billion over 10 years. It is a combination of bills that emerged from the House Education and Labor, Energy and Commerce, and Ways and Means committees earlier this year.

According to news reports, the bill would
• create a new government-regulated insurance "exchange" in which private companies would sell policies in competition with the government,

• require nearly everyone to sign up for health coverage by 2013 either through their employer, a government program, or the new exchange,

• make federal subsidies available to lower-income individuals and families in order to help them afford health insurance,

• provide subsidies to small businesses as an incentive to offer coverage to their workers,

• raise Medicaid eligibility levels to 150 percent of the federal poverty level ( $16,245 for an individual and $33,075 for a family of four),

• prohibit insurance companies from denying coverage to sick people,

• implement a 5.4 percent surtax on individual taxpayers making more than $500,000 and couples making more than $1 million, and

• add a 2.5 percent excise tax on the sale of medical devices, which would cost the industry $20 billion over the next decade.