Presentation by Lynn Blewett to Mount Zion Temple and Jewish Community Action members in St. Paul, MN, October 11 2009.

1. New Update on National Health Reform: A Moving Target Lynn A. Blewett, Ph.D. State Health Access Data Assistance Center University of Minnesota, Minneapolis, MN October 11, 2009 Funded by a grant from the Robert Wood Johnson Foundation

2. 2 Outline of Presentation Drivers of Reform Overview of Key Proposals Broad Implications Legislative Process What’s Next?

3. Why Is Health Care Reform Needed? 3 Cost Access Quality Could be better!

4. $2.5 trillion in 2009 $8,160 2009

5. Increase in number of uninsured New verification question 15.4% of Population Millions of Uninsured, all ages 5 Source: U.S. Census Bureau, Current Population Surveys (March), 1989-2008

6. Drop in Employer-Sponsored Coverage 6 Source: US. Census Bureau, Income, Poverty, and Health Insurance Coverage in the United States: 2008.

7. Quality Patients receive the proper diagnosis and treatment only about 55% of the time* WHO ranking of 37 behind Costa Rica, and close to Cuba at 39 Infant mortality rates that are higher than most European countries and three times the rate of countries such as Japan; One of the lowest utilization rates of preventive healthcare services in the world 7 *McGlynn EA, et al NEngl J Med. 2003.

8. Legislative Proposals

11. Sponsor: Representative John Dingell (D-MI)9

12. Provisions At a Glance 10 Co-ops

13. Public Plan Option Meets minimum essential creditable coverage Paid for with plan premiums Quasi-public administration No profit, advertising and minimal administrative costs (minimal loading fees) Offered along side other private plans through the exchange 11 Access Senate Finance Rejected 9-29-09

14. Access Health Insurance Exchange State-based agency that assesses and approves “cretible coverage” Meets some basic pre-set standards Organize and displays health insurance options in consumer friendly way Easy to shop and compare Facilitate the premium subsidies for low-income families not eligible for Medicaid Primarily for Individuals and small employers 12

15. Premium Subsidies Access Refundable tax credits to low-income families not eligible for Medicaid Administered through the Exchange Incomes between 133% - 300% of poverty Apx. $29,000 - $66,000 for family of four To reduce cost of health insurance coverage for individuals and families Tied to essential creditable coverage 13

16. 14 Premium Subsidies and Medicaid Expansions (Family of Four FPL = $22,050 in 2009) ReformProposal $88,200 Family Income

17. Employer-Mandate Access Employers either provide health insurance coverage or pay a penalty to fund access Employers must pay 60-65% of family premiums or Penalty of $750 for each employee who is not offered coverage (HELP) or based on percent of payroll (House) Small business exemption Tax credits for small business 15

19. Tax credits for certain small employers - Less than 25 employees -Average annual wage < $40K 16 Access

20. Insurance Reform Restrictions on Premium Rating cannot be rated on health status (Baucus) Plus gender, class of business (House) Plus claims experience (HELP) Tightening of rate bands (Baucus) -Rate can vary by age (4:1 max. ratio), -tobacco use (1.5:1 max. ratio), area, and -family composition 17 Access

21. Overview of Impact of Three Main Proposals

22. Key Legislative Proposals: CBO Cost Estimates-Over 10 years Baucus/Finance Kennedy/HELP HouseTri-Committee $856 Billion Net $49 Billion deficit reduction $1.34 Trillion Net $1.04 Trillion deficit increase 19 $1.042 Trillion Net $239 Billion deficit increase

23. 20

24. 21 Source: Center on Budget and Policy Priorities, February 2009

25. Key Baucus Finance Provisions Excise tax on high-premium health coverage in Fees on manufacturers and importers of drugs and devices Adjustments to Medicare Advantage payments Reduction in Medicare payments to NHs Reducing Medicare and Medicaid payments to hospitals that serve a large number of low-income patients - Disproportionate Share 22

27. Legislative Process

29. What Next? Big hurdles Public Plan Financing Politics! Possibility –a high-level framework for reform with phased in time frame to allow for recovery of economy, development of the details, including payment reform for later… States continue strategies for access and coverage without more detail and assurance of national reform

30. 27 Outlook for Reform…

31. 28 Contact Information Lynn A. Blewett, Ph.D. State Health Access Data Assistance Center University of Minnesota, Minneapolis, MN www.shadac.org blewe001@umn.edu 612-624-4802