A STRONG FOUNDATION: How Health Reform Protects Consumers, Expands Access & Reigns In Cost

1. A STRONG FOUNDATION: How Health Reform Protects Consumers, Expands Access & Reigns In Cost

2. 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

3. The Need for Reform Costs of a Broken System in Pennsylvania 7500 premature deaths each year due to lack of health insurance Health insurance premiums increased 4 times faster than wages since 2000 27.3% went without insurance for all or part of 2007-08 Average family policy cost $24,000—nearly half the median household income 69.3% were uninsured for 6 months or more during 2007-08 “Hidden” tax of uncompensated care; $900/family, $320/individual 76.5% of the uninsured were from working families Insurance company abuses: pre-existing conditions, rescissions, claim denials, price discrimination

4. The Need for Reform The Uninsured & Underinsured—Who Are They? Connie, Early Retiree (in Health Care Field) 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)

5. How Reform Helps The Uninsured • Pre-Existing Condition Insurance Plans • (PA Fair Care) • Extension of Dependent Coverage to Age 26 • Medicaid Expansion • State Health Insurance Exchange --Up to 133% of FPL --Individuals --Childless Adults --Families --Small Businesses (<100 FTE)

6. How Reform Helps The Insured • No more denials for pre-existing conditions • No more price discrimination based on health status or gender • No more rescissions • No more co-pays for preventive care • No more lifetime caps or annual limits • New external review process to fight claim denials • Medical loss ratio • Caps out-of-pocket costs • New consumer pricing tools to compare insurance plans

7. How Reform Helps Seniors & Early Retirees Currently 154,000 early retirees (ages 55-64) in PA $250 rebate for seniors in “donut hole” gap in drug coverage Over 192,000 uninsured Pennsylvanians ages 50-64 in 2008 No more co-pays for preventive care under Medicare & Medicare Advantage plans $5 billion for participating employers to reimburse claims of early retirees 80% of the costs from $15,000 to $90,000 Crackdown on waste, fraud & abuse in Medicare Medicare’s solvency extended an extra 12 years

8. How Reform Helps Small Business Who’s Eligible? 73.6% of PA businesses are small businesses Businesses with < 25 FTE with average wages < $50,000 where employers cover 50% or more of premium cost for employees Only 48.7% are currently able to offer insurance to employees How Much Does It Cover? 2010-2013: Up to 35% of the cost of providing coverage to employees Additional 25% credit for tax-exempt businesses 2014 & beyond: Credits rise to 50% of the cost of coverage and 35% for tax-exempt businesses Up to 162,245 small businesses in PA will qualify for new tax credits These small businesses employ over 654,000 workers

9. Timeline for Implementation 2010 2010 Consumer pricing, transparency tools at Healthcare.gov Consumer pricing, transparency tools at Healthcare.gov New state-level consumer assistance programs New state-level consumer assistance programs No more denials for kids (<19) with pre-existing conditions No more denials for kids (<19) with pre-existing conditions Small business tax credits Small business tax credits Rebates for seniors in ‘donut hole’ coverage gap No more rescissions No more rescissions Regulates, restricts annual limits Regulates, restricts annual limits Free preventive care Pre-Existing Condition Insurance Plans New external review process to appeal coverage/claim decisions New external review process to appeal coverage/claim decisions Extended coverage for young adults Expanded coverage for early retirees

10. Timeline for Implementation 2011 Prescription drug discounts for seniors in ‘donut hole’ Community First Choice Option to allow seniors to get necessary care at home Free preventive care for seniors under Medicare Rebates from insurers not adhering to medical loss ratio New Center for Medicare & Medicaid Innovation to test quality care methods Ends overpayments to Medicare Advantage companies Community Care Transitions Program to improve quality outcomes for Medicare patients

11. Timeline for Implementation 2012 Incentives to hospitals for quality health outcomes; hospital performance data on quality measures to be public Voluntary long-term care insurance program: CLASS Act Federal health programs begin collecting and reporting racial, ethnic and language data to identify and fight health disparities Accountable Care Organizations Standardized billing, forms and electronic records to simplify administrative work and improve quality of care

12. Timeline for Implementation 2013 New funding for state Medicaid programs to cover preventive care Brings Medicaid reimbursement rates to 100% of Medicare; fully funded by federal government Launches national pilot program for hospitals and providers to improve coordination and quality care; “bundling” States will receive extra 2 years of funding for CHIP

13. Timeline for Implementation 2014 New State Insurance Exchange For individuals and small businesses (<100 FTE) No more denials for pre-existing conditions Exchange will offer choice of health plans that meet quality and affordability standards No more gender or health status-based price discrimination Income-based credits for individuals and families between 133-400% FPL Increased small business tax credits Medicaid expansion to 133% FPL Members of Congress and staff must get insurance through their state’s exchange Will benefit over 900,000 Pennsylvanians

14. Timeline for Implementation Out-of-Pocket Costs Capped for Individuals in Insurance Exchange

15. How Reform Is Paid For Medicare Payroll Tax for Wealthy Americans Starts in 2013, will generate $210B over 10 years (CBO) Fees on the Medical Industry Starts in 2013, will generate $107B over 10 years (CBO) Increased Penalties for Non-Health Related HSA Withdrawals Starts in 2010, will generate $29B over 10 years (CBO) Crackdown on Waste, Fraud & Abuse in Medicare Billing Starts in 2013, will generate $1B over 10 years (CBO)

16. How Reform Is Paid For No Free Riders: Fines for Not Having/Offering Health Insurance Starts 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

17. How Reform Is Paid For Tanning Tax Starts in 2010, will generate $2.7B over 10 years (CBO) Excise Tax on High-Cost Insurance Plans Starts in 2018, will generate $200B over 10 years (CBO) Paying for Health Reform, 2010-2019 Chart is in billions of dollars

18. Building on the Strong Foundation Education State Implementation Building support among key constituencies Governor’s Health Reform Advisory Committee --Exchange Issues Coalition-Building --Access Issues Building a strong network to keep implementation moving forward with consumers and working families in mind --Quality Issues Consumer Voices & Participation Advocacy Protecting our historic victory and moving it forward in Pennsylvania

19. Erin Gill Pennsylvania Health Access Network egill@pahealthaccess.org (412) 512-9225