1. Texas Health Care Reform Coverage Institute September 26, 2007

2. The Texas Health Care System Employer-based health insurance (~50%) –Non-group (No guaranteed issue, full medical underwriting & pre-existing condition exclusions allowed) –Small group (guaranteed issue & renewability, limited medical underwriting & allowed) –Large group (limited rate/underwriting regulation) Public programs (~25%) –Medicaid (~12%, 2.8M) Uninsured (~25%)

3. Primary Challenges National Challenges –Access –Affordability –Costs –Fragmentation (horizontal) Texas-specific Challenges –Demographics –Industry structure –Fragmentation (vertical) –Regulation

4. Framework for Reform Health Care Delivery Risk & Cost Distribution Patient & Consumer Dynamics

5. Sample of Recent Activities Health Care Delivery –House Bill 1066 (health information technology) Risk & Cost Distribution –Senate Bill 10 (Medicaid reform) Patient & Consumer Dynamics –Senate Bill 1731 (Price & quality transparency)

6. Considerations for Texas Health System Reform Health Care Delivery –Regulatory review –Aligned incentives for quality, safety, and efficiency Risk & Cost Distribution –Health insurance market reform –Health insurance market support –Health insurance market infrastructure –System integration –Eligibility changes Patient & Consumer Dynamics –Personal responsibility –Consumer empowerment