THE COMMONWEALTH FUND Whats in the New Health Reform Law? Karen Davis President, The Commonwealth Fund Alliance for Health Reform Briefing April 16,

THE COMMONWEALTH FUND A Historic Accomplishment Health reform promises to usher in a new era in American health care It will: –Cover 32 million uninsured –Improve affordability of coverage for millions now having difficulty paying health insurance premiums, medical bills, or accumulated medical debt –Eliminate doughnut hole in Medicare Rx coverage; institute a new voluntary long-term care financing program –Begin to move to an organized integrated delivery system with coordinated care, reducing errors, duplication, and waste –Help slow rising health care costs that are a burden on families, employers, and federal, state, and local government budgets Important to foster understanding of what health reform is and isnt –Many immediate benefits within the next six months Build areas of consensus

THE COMMONWEALTH FUND CBO estimate of Affordable Care Act of 2010 Total Net Impact on Federal Deficit, 2010–2019 –$143 Gross Cost of Coverage Provisions $938 Offsetting Revenues from Individual Mandate, Employers, and Wage Effects – $117 Savings from Payment and System Reforms–$511 Productivity updates/provider payment changes–160 Medicare Advantage reform–204 Other improvements and savings–147 Education System Savings–$19 Total Revenues–$432 Major Sources of Cost, Savings and Revenues Compared with Projected Spending, Net Cumulative Effect on Federal Deficit, 2010–2019 Dollars in billions Note: Totals do not reflect net impact on deficit due to rounding. Source: Congressional Budget Office, Letter to the Honorable Nancy Pelosi, Mar. 20, 2010.

THE COMMONWEALTH FUND Impact on Select Populations Uninsured and underinsured –Better coverage and affordability –More choices of plans; improved stability of coverage Young adults –Coverage under parents health policies in September 2010 Women –Same premiums regardless of gender –Coverage of maternity and reproductive health services (other than abortion) Older Adults and Disabled Adults –Temporary high-risk pools –In 2014, community rating and guaranteed issue; limits on rating by age (3:1) –CLASS Act – voluntary long-term care financing through payroll deduction begins in 2012, five-year vesting before eligible for monthly payments for home and long-term care services Medicare –Phases out doughnut hole in prescription drug coverage –Covers preventive care services without cost-sharing including new annual wellness visit –Extends solvency of Medicare hospital insurance trust fund by nine years –Guarantees no cut in basic Medicare benefits –Eliminates overpayment of Medicare managed care plans

THE COMMONWEALTH FUND Implementing Health Reform: What are the issues? Gap period – ensuring access pending expansion of coverage in 2014 –COBRA subsidies and enhanced federal Medicaid matching rate extension included in expansive jobs bill awaiting conference (H.R. 4213) –Sustaining and restructuring the safety net Ensuring a strong primary care system with patient-centered medical homes for all Success of rapid testing of payment and delivery system innovation State capacity to implement reform Funding and resources at HHS

THE COMMONWEALTH FUND Thank You! Kristof Stremikis, Senior Research Associate, For more information, please visit: Steve Schoenbaum, Executive Vice President for Programs, Stephanie Mika, Program Associate, Rachel Nuzum, Senior Policy Director, Cathy Schoen, Senior Vice President for Research and Evaluation, Stu Guterman, Assistant Vice President, Payment Reform