1. Federal Healthcare Reform 2009 Presented by: Ronald R. DiLuigi V.P. Advocacy, Govt’ Relations and Public Policy November 14, 2009

2. Federal Healthcare Reform - 2009 Insurance Market Reforms:  Guaranteed eligibility for private/public plans  Plans prohibited from discrimination (ie; pre-existing condition, gender)  No annual or lifetime limits on medical spending  Limited variation in premium rates permitted based on tobacco use, age  Actuarially equivalent benefit packages  Requires health plan spend a minimum of 85% of premium dollars on medical care

3. Federal Healthcare Reform - 2009 Health Insurance Exchange (HIE)  Creates a new market place which would simplify comparison of health insurance plan benefits and premium costs  Information about coverage and cost sharing available in standard format  Plans compete to offer individual/small employer coverage  Rules/standards for participating plans

4. Federal Healthcare Reform - 2009 Public Option  Maybe the most widely discussed, misunderstood and disagreed upon element of the reform proposals  A government directed plan designed to compete with private insurance plans  Stated purpose is to promote cost savings in the insurance industry and bring lower cost to the consumer, creating greater competition in the insurance market  Proposed to serve the individual and small employers

5. Federal Healthcare Reform - 2009 Public Option (continued)  Alternatives proposed include: not for profit cooperatives; State opt-in or State opt-out  Final alternative is so-called “trigger”, meaning there would be no public option to begin with, but one would be triggered into existence if private insurers fail to deliver affordable plans to pre-agreed upon numbers of currently un- insured people

6. Federal Healthcare Reform - 2009 Shared Responsibility  Employers – must provide health insurance to their employees or make a contribution to the HIE to fund affordable coverage (play or pay)  Small business – small employers with fewer than 25 employees or a payroll of less than $500,000 would be exempt – small business tax credits  Individuals – are required to obtain health coverage or pay a penalty fee

7. Federal Healthcare Reform - 2009 Shared Responsibility (continued)  Government – ensure that essential health coverage is affordable and available to all Americans – provide financial assistance to Low income residents.

8. Affordability Factor HR 3962 Income Premium Limit as a Percent of Income Annual Out-of Pocket Cap Individual/Family Under 133 - 150% FPL 1.5-3%$500/$1000 150 - 200% FPL3-5.5%$1,000/$2,000 200 - 250% FPL5.5 -8%$2,000/$4,000 250 - 300% FPL8-10%$4,000/$8,000 300 - 350% FPL10-11%$4,500/$9,000 350 - 400% FPL11-12%$5,000/$10,000

9. Federal Poverty Guidelines-Eligibility

10. Federal Healthcare Reform - 2009 Abortion  Intent of the U.S. Conference of Catholic Bishops and the Catholic Healthcare Association is to ensure that Healthcare Reform Legislation is “Abortion Neutral” Bars the use of federal funds to pay for abortions, except to save the mother’s life, or in cases of rape or incest. (Hyde Amendment) Maintains conscience protection for healthcare professionals and hospitals (Weldon Amendment)

11. Federal Healthcare Reform - 2009 Where does Healthcare Reform go from here?

12. Federal Healthcare Reform - 2009 Agreement  General Consensus among almost all members of Congress Mandate for more individuals to have some level of insurance Pre-existing conditions do not block eligibility Subsidies for lower income families & small business Contributions from most employers Health Insurance Exchange (voluntary) Narrow premium pricing bands

13. Federal Healthcare Reform - 2009 Agreement (continued)  Benefits “Young and invincible” with catastrophic and preventive care Bronze: Essential benefits (minimum package) Silver, Gold & Platinum plans with specific actuarial values  Cap Maximum out-of-pocket expenses  End lifetime expenditure maximum  New government regulations on insurance companies  Medicare savings

14. Federal Healthcare Reform - 2009 Disagreement  Major differences among members of Congress Public Option Cost Federal deficit  Additional taxes for employers, beneficiaries & insurers Tax the rich Tax rich benefit plans Tax poor (inadequate) benefit plans Tax insurers

15. Federal Healthcare Reform - 2009 Disagreement (continued)  Medicare reductions  Medicaid expansion State burdens  Universal vs. increased coverage  Eligibility Income Part-time employees Illegal aliens & undocumented workers  End-of-life counseling (euthanasia) (“death squads”)  Abortions

16. THE ROAD AHEAD 16 CBO ANALYSIS CBO ANALYSIS CBO ANALYSIS THE ROAD AHEAD