WHAT DOES HEALTH CARE REFORM MEAN FOR YOU AND YOUR FAMILY? Bringing Health Reform Home April 2010

Opening  In March Congress passed and the President signed comprehensive health reform legislation  As a non-partisan organization PICO worked to give families a voice in the health care debate.  We made our voices heard on reform because of the stories affecting our families

Opening  Reform builds on the current system with changes phased in over several years  Now that the legislation has passed it is important for us to know what is in it and how it will affect each of us

Reflection

What about reform are you hopeful about? What questions or concerns do you have? One-to-Ones

Pre health care reform blueprint

Post health reform blueprint (UPDAT

Key Elements of Health Reform Greater regulation on insurance companies Illegal to deny coverage to people with pre-existing conditions Cannot charge more or terminate your insurance if you are sick No more annual or lifetime limits Greater scrutiny on premium increases and the ability to appeal insurance company denial of care

Key Elements of Health Reform Expands coverage to 32 million people currently without insurance

Key Elements of Health Reform Creates state-based Exchanges, a place that uninsured individuals and small businesses can buy coverage The Exchange will also be a safety net for those currently with insurance if they lose a job. Members of Congress will get their insurance through the Exchange.

Key Elements of Health Reform Measures to Control Health Care Costs for Families 80-85% of premiums have to go to medical care rather than administration costs and profits Limits on out-of-pocket costs ($5,950 for individuals and $11,900 for families in 2010) to prevent medical bankruptcies; applies to plans in the Exchange and incentives for employers to provide this Exchanges make it easier to compare plans and find the best value Cost containment of rising costs of healthcare (subsequent slides)

Key Elements of Health Reform Tax credits for small businesses to purchase health insurance for employees

Key Elements of Health Reform Focus on prevention Expands health care work force of doctors and nurses Youth can stay on their parents’ health insurance plans up to age 26 Everyone must have health insurance unless you have a religious objection or financial hardship An additional $11 billion in funds for Community Health Centers, which is estimated to double the number of people served

How is it paid for? Starting 2010: cost saving changes in Medicare Greater oversight and enforcement to reduce fraud, waste and abuse; greater efficiency and collaboration among doctors and reduced over-payments to the Medicare Advantage companies. Starting in : increasing penalties on contribution loopholes in Health Saving Accounts Increased penalties on nonqualified distributions from Health Saving Accounts, a lower cap on Flexible Spending Accounts contributions, and a standardization of the definition of qualified medical expenses.

How is it paid for? Starting in 2013: high-income earners will contribute more to the Medicare fund Individuals earning over $200,000 and families earning over $250,000 will contribute 2.35% for income above the threshold instead of the current 1.45%. They will also pay a 3.8% tax on net investment income (excluding retirement plans). Starting in 2018: insurers will have to pay a 40% excise tax on high cost group plans The tax is on the cost of coverage in excess of $27,500 (family coverage) and $10,200 (individual coverage). There are higher thresholds for retirees and employees in high risk professions.

Cost Containment Including:  A Medicare Commission to cut through the political gridlock and make decisions on efficiency and reaching spending targets  A tax on high cost “Cadillac plans” as an incentive to buy insurance plans that hold down costs  Modernizing Health Care Information Technology (IT) infrastructure (e.g. electronic medical records)  Pilot programs such as Medicare “bundling” to reward coordination and quality over quantity. In “bundling” Medicare will pay a doctor or hospital for the total care for a person with a certain disease, rather than a payment for every test or procedure; this will start as a pilot program and be expanded if it works

Cost Containment, continued  Gathering and disseminating research on which treatments work, and which don‘t  Investing in preventative care  Reducing overpayments to private insurance companies that participate in Medicare Advantage The bill tries out almost every approach that leading health care experts have suggested for cost containment in the hopes that some of the ideas will work well. Successful strategies can be expanded on by the administration - without needing approval from Congress in the face of opposition from providers, suppliers and other interests. The bill is a testing ground of different ideas and we can build on what works.

What happens in the first year Begin to close the Medicare “donut hole” for Seniors so prescription drugs are more affordable Donut hole closes completely in 2020.

What happens in the first year Prohibit insurance companies from denying coverage to children with pre-existing conditions September 23, 2010

What happens in the first year Insurance companies will be banned from dropping people when they get sick and imposing lifetime limits on coverage - September 23, 2010

What happens in the first year Holds insurance companies accountable for unreasonable rate hikes

What happens in the first year Youth can stay on their parents’ plans up to age of 26 September 23, 2010

What happens in the first year Small business tax credits to help provide health insurance to employees - right away A high risk pool is created for people with pre-existing conditions, this will be in place until the exchanges are up in June 21, 2010 Investments to increase the number of primary care doctors and nurses - October 1, 2010 New consumer assistance offices - September 23, 2010 New plans will have free preventative care and an independent appeals process for insurance company decisions to deny care - September 23, 2010

What is your current health care situation? Are you insured through work? Through Medicare? Medicaid? Are you uninsured?

Insured through Employer 2010 No canceling policies when you get sick or setting lifetime limits. Children up to age 26 can stay on your plan. Insurance companies will have to cover children with pre- existing conditions. New plans must provide free preventative services & allow you to appeal denials of coverage No canceling policies when you get sick or setting lifetime limits. Children up to age 26 can stay on your plan. Insurance companies will have to cover children with pre- existing conditions. New plans must provide free preventative services & allow you to appeal denials of coverage – 2013 Insurance companies required to spend 80-85% of premium dollars on medical services or else provide rebates to their policyholders. States can require insurance companies to submit justification for premium increases – 2013 Insurance companies required to spend 80-85% of premium dollars on medical services or else provide rebates to their policyholders. States can require insurance companies to submit justification for premium increases Insurers will have to cover adults with pre-existing conditions. No annual limits on coverage. Qualified individuals can begin buying subsidized coverage in the Exchange Insurers will have to cover adults with pre-existing conditions. No annual limits on coverage. Qualified individuals can begin buying subsidized coverage in the Exchange Insurers will have to pay a 40% excise tax on high cost insurance plans. The tax is on the cost of coverage in excess of $27,500 (family coverage) and $10,200 (individual coverage).

Insured through Medicare 2010 Seniors on traditional Medicare will have no losses in coverage and will add important benefits. Seniors that reach the “donut hole” will receive a $250 rebate for prescription drugs Seniors on traditional Medicare will have no losses in coverage and will add important benefits. Seniors that reach the “donut hole” will receive a $250 rebate for prescription drugs Seniors in the “donut hole” will receive a 50% discount on brand name drugs. The “donut hole” will be closed slowly through Annual checkups and most preventative care and screenings are at no cost Seniors in the “donut hole” will receive a 50% discount on brand name drugs. The “donut hole” will be closed slowly through Annual checkups and most preventative care and screenings are at no cost The donut hole will fully close Government begins to cut subsidies to Medicare Advantage, which costs the government more than traditional Medicare. Seniors on these plans may face reduced benefits or higher costs. Seniors have the option of transitioning to traditional Medicare during the first 45 days of the year Government begins to cut subsidies to Medicare Advantage, which costs the government more than traditional Medicare. Seniors on these plans may face reduced benefits or higher costs. Seniors have the option of transitioning to traditional Medicare during the first 45 days of the year.

Uninsured 2010 Temporary high-risk pool for people with pre-existing conditions uninsured for at least 6 months For early retirees, age 55-64, a temporary re-insurance program is created until the Exchange is running. A large expansion in funds to Community Health Centers. This is expected to double the number of patients that clinics serve. This will help millions of undocumented immigrants. If you are under age 26, you can join your parent’s plan Temporary high-risk pool for people with pre-existing conditions uninsured for at least 6 months For early retirees, age 55-64, a temporary re-insurance program is created until the Exchange is running. A large expansion in funds to Community Health Centers. This is expected to double the number of patients that clinics serve. This will help millions of undocumented immigrants. If you are under age 26, you can join your parent’s plan Individuals and families will be able to purchase health insurance in state-based Exchanges. Those earning up to 400% FPL ($88,200 for a family of 4) will have access to subsidies on a sliding scale. Cap on out-of-pocket costs of $5,950 for individuals and $11,900 for families, with lower caps for lower-income families. Individuals and families under 133% FPL will be eligible for Medicaid. Most Americans will be required to buy health insurance or pay a penalty. Undocumented immigrants will not be able to purchase insurance in the Exchange. Those who are exempt, or under 30, can buy a catastrophic policy (must also allow for 3 primary care visits a year). Members of Congress will get their health insurance through the Exchange Individuals and families will be able to purchase health insurance in state-based Exchanges. Those earning up to 400% FPL ($88,200 for a family of 4) will have access to subsidies on a sliding scale. Cap on out-of-pocket costs of $5,950 for individuals and $11,900 for families, with lower caps for lower-income families. Individuals and families under 133% FPL will be eligible for Medicaid. Most Americans will be required to buy health insurance or pay a penalty. Undocumented immigrants will not be able to purchase insurance in the Exchange. Those who are exempt, or under 30, can buy a catastrophic policy (must also allow for 3 primary care visits a year). Members of Congress will get their health insurance through the Exchange.

Insured through Medicaid or CHIP 2010 All children currently receiving Medicaid and CHIP can continue to receive coverage. States cannot cut children from Medicaid or CHIP until 2019, at which point some children may transition into the Exchange. All adults under 133% of the Federal Poverty Level can continue to receive coverage. States cannot cut adults that make under 133% FPL from Medicaid. Many preventive services will be offered without cost All children currently receiving Medicaid and CHIP can continue to receive coverage. States cannot cut children from Medicaid or CHIP until 2019, at which point some children may transition into the Exchange. All adults under 133% of the Federal Poverty Level can continue to receive coverage. States cannot cut adults that make under 133% FPL from Medicaid. Many preventive services will be offered without cost Medicaid’s physician reimbursement levels for specific primary care services will be increased, leading more doctors to accept Medicaid. Anyone with an income below 133% FPL, about $29,327 in 2009 for a family of four, will be eligible for Medicaid. When the Exchange is operating, states can decide to keep adults on Medicaid that are over 133% FPL or transition them into the Exchange Medicaid’s physician reimbursement levels for specific primary care services will be increased, leading more doctors to accept Medicaid. Anyone with an income below 133% FPL, about $29,327 in 2009 for a family of four, will be eligible for Medicaid. When the Exchange is operating, states can decide to keep adults on Medicaid that are over 133% FPL or transition them into the Exchange.

What did you learn today that was meaningful for you?

Next Steps Share this info and materials with family and friends Local opportunities to get involved in “bringing health reform home”, making sure health reform is implemented well on the state and local level

Many thanks to Community Catalyst and Georgetown Center for Children and Families for their assistance in creating this presentation Acknowledgements

WHAT DOES HEALTH CARE REFORM MEAN FOR YOU AND YOUR FAMILY? April 2010