a strong foundation: how health reform protects consumers, expands access & reigns in cost
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A STRONG FOUNDATION: How Health Reform Protects Consumers, Expands Access & Reigns In Cost. The Need for Reform. Pre-Existing Condition = Denied Life-Saving Care. Lost his job. Lost his insurance. Lost his life. Billy Koehler, died March 7, 2009. The Need for Reform. - PowerPoint PPT PresentationTRANSCRIPT
A STRONG FOUNDATION: How Health Reform Protects Consumers,
Expands Access & Reigns In Cost
The Need for Reform
Billy Koehler, died March 7, 2009
Pre-Existing Condition = Denied Life-Saving Care
Lost his jobLost his insuranceLost his life
The Need for Reform
Costs of a Broken System in Pennsylvania7500 premature deaths each
year due to lack of health insurance
76.5% of the uninsured were from working families
27.3% went without insurance for all or part of 2007-08
69.3% were uninsured for 6 months or more during 2007-08
Health insurance premiums increased 4 times faster
than wages since 2000
“Hidden” tax of uncompensated care;
$900/family, $320/individual
Average family policy cost $24,000—nearly half the
median household income
Insurance company abuses: pre-existing
conditions, rescissions, claim denials, price discrimination
The Need for Reform
Connie, Early Retiree (in Health Care Field)
The Uninsured & Underinsured—Who Are They?
Retired early to take care of husband
Depleted savings paying for COBRA
Denied for pre-existing condition by former insurer
of 30+ years
Uninsured, praying to make it to her 65th birthday (April
2011)
How Reform Helps
The Uninsured
Pre-Existing Condition Insurance Plans
(PA Fair Care)
Medicaid Expansion
Extension of Dependent Coverage to Age 26
State Health Insurance Exchange
--Individuals
--Small Businesses (<100 FTE)
--Families
--Up to 133% of FPL--Childless Adults
How Reform Helps
The Insured No more denials
for pre-existing conditions
No more rescissions
No more price discrimination based on health status or gender
No more co-pays for preventive care
Medical loss ratio
No more lifetime caps or annual limits
New external review process to fight claim
denials New consumer pricing
tools to compare insurance plans
Caps out-of-pocket costs
How Reform Helps
Seniors & Early RetireesCurrently 154,000 early
retirees (ages 55-64) in PA
$5 billion for participating employers to reimburse claims
of early retirees 80% of the costs from $15,000 to
$90,000
Over 192,000 uninsured Pennsylvanians ages 50-64 in
2008
$250 rebate for seniors in “donut hole” gap in drug
coverage
No more co-pays for preventive care under Medicare & Medicare
Advantage plansCrackdown on waste, fraud
& abuse in Medicare
Medicare’s solvency extended an extra 12 years
How Reform Helps
Small Business73.6% of PA businesses are
small businessesOnly 48.7% are currently able to offer insurance to
employees
Who’s Eligible?
How Much Does It Cover?Up to 162,245 small
businesses in PA will qualify for new tax credits
These small businesses employ over 654,000
workers
Businesses with < 25 FTEwith average wages <
$50,000where employers cover 50% or more of premium cost for
employees2010-2013:
Up to 35% of the cost of providing coverage to
employeesAdditional 25% credit for tax-
exempt businesses2014 & beyond:
Credits rise to 50% of the cost of coverage and 35% for tax-
exempt businesses
Timeline for Implementation
2010Consumer pricing, transparency
tools at Healthcare.govNew state-level consumer
assistance programsSmall business tax credits
Rebates for seniors in ‘donut hole’ coverage gap
Free preventive care
No more denials for kids (<19) with pre-existing conditions
No more rescissionsRegulates, restricts annual
limitsNew external review process to
appeal coverage/claim decisions
Pre-Existing Condition Insurance Plans
Extended coverage for young adults
Expanded coverage for early retirees
2010Consumer pricing, transparency
tools at Healthcare.govNew state-level consumer
assistance programsSmall business tax creditsNo more denials for kids (<19)
with pre-existing conditionsNo more rescissions
Regulates, restricts annual limits
New external review process to appeal coverage/claim
decisions
Timeline for Implementation
Community Care Transitions Program to improve quality
outcomes for Medicare patients
2011
Prescription drug discounts for seniors in ‘donut hole’
Rebates from insurers not adhering to medical loss
ratioEnds overpayments to
Medicare Advantage companies
Free preventive care for seniors under Medicare
New Center for Medicare & Medicaid Innovation to test
quality care methods
Community First Choice Option to allow seniors to get
necessary care at home
Timeline for Implementation
2012
Incentives to hospitals for quality health outcomes;
hospital performance data on quality measures to be public Federal health programs
begin collecting and reporting racial, ethnic and
language data to identify and fight health disparities
Accountable Care Organizations
Voluntary long-term care insurance program: CLASS Act
Standardized billing, forms and electronic records to simplify
administrative work and improve quality of care
Timeline for Implementation
2013
New funding for state Medicaid programs to cover preventive
care
States will receive extra 2 years of funding for CHIP
Launches national pilot program for hospitals and
providers to improve coordination and quality care;
“bundling”
Brings Medicaid reimbursement rates to 100%
of Medicare; fully funded by federal government
Timeline for Implementation
Members of Congress and staff must get insurance
through their state’s exchange
2014No more denials for pre-existing
conditionsFor individuals and small
businesses (<100 FTE)Exchange will offer choice of
health plans that meet quality and affordability standards
No more gender or health status-based price
discrimination
Increased small business tax credits
New State Insurance Exchange
Medicaid expansion to 133% FPL
Income-based credits for individuals and families between
133-400% FPL
Will benefit over 900,000 Pennsylvanians
Timeline for Implementation
Out-of-Pocket Costs Capped for Individuals in Insurance Exchange
How Reform Is Paid For
Medicare Payroll Tax for Wealthy AmericansStarts in 2013, will generate $210B over 10 years (CBO)
Crackdown on Waste, Fraud & Abuse in Medicare BillingStarts in 2013, will generate $1B over 10 years (CBO)
Fees on the Medical IndustryStarts in 2013, will generate $107B over 10 years (CBO)
Increased Penalties for Non-Health Related HSA WithdrawalsStarts in 2010, will generate $29B over 10 years (CBO)
How Reform Is Paid ForNo Free Riders: Fines for Not Having/Offering Health InsuranceStarts in 2014, will generate $70B over 10 years (CBO)
Everyone must have health insurance by 2014. Those who choose not to purchase insurance will pay a penalty of:
$95 or 1% of income (whichever is greater) in 2014$325 or 2% of income in 2015
$695 or 2.5% in 2016
Employers with > 50 employees that do not offer coverage and have employees who would qualify for federal subsidies in the insurance exchange will be fined $2,000 per employee.
--Individuals can make up to $42,000/year --The first 50 employees exempt
How Reform Is Paid For
Tanning TaxStarts in 2010, will generate $2.7B over 10 years (CBO)Excise Tax on High-Cost Insurance PlansStarts in 2018, will generate $200B over 10 years (CBO)
Paying for Health Reform, 2010-2019 (in billions of dollars)
Gross Cost of Expanding Health Coverage Subsidies to participants in health insurance exchanges 464
Medicaid expansion 434 Small-employer tax credits 40
Subtotal 938 Less: Medicare, Medicaid, and Other Program Savings Curb Medicare Advantage overpayments 136 Adjust payments to Medicare providers 196 Reduce Medicaid drug costs 38 Reduce subsidies for hospitals serving the uninsured 36
Increase Medicare premiums for the affluent 36 Other outlay changes (net) -1
Subtotal 441 Less: Additional Revenues Medicare tax on high-income people 210 Health industry fees 107 Penalty payments by employers and uninsured individuals 69
Excise tax on high-cost insurance plans 32 Other revenue changes 152
Subtotal 570 Net Deficit Effect (excluding CLASS Act) -73
Paying for Health Reform, 2010-2019Chart is in billions of dollars
Building on the Strong Foundation
Education
Coalition-Building
Advocacy
State ImplementationGovernor’s Health Reform Advisory Committee
Consumer Voices & Participation
Building support among key constituencies
Building a strong network to keep implementation moving forward with consumers and working families in mind
--Exchange Issues--Access Issues--Quality Issues
Protecting our historic victory and moving it forward in Pennsylvania
Erin GillPennsylvania Health Access Network
[email protected](412) 512-9225