The Real Facts About Healthcare Reform and Our Community
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Discussion of House and Senate Bills: The major provisions and the facts as to how they impact you and me: e.g. insured and uninsured, small business owners. Debunking the myths: What the right-wing opponents of reform are saying and the truth.
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The Real Facts About Healthcare Reform and Our Community
- 1. The Real Facts About Health Care Reform and Our Community August, 2009 Public Policy and Education Fund, www.ppefny.org Fiscal Policy Institute, www.fiscalpolicy.org New Yorkers for Fiscal Fairness, www.abetterchoiceforny.org
- 14. Examples of What You’ll Pay: House Bill as Example 30% of medical costs up to $10,000 No subsidy to limit premium $90,000 Family of 4 30% of medical costs up to $10,000 $7,920 (11% of income) $72,000 Family of 3 15% of medical costs up to $10,000 $2450 (7% of income) $35,000 Couple 3-5% of medical costs up to $5000 $480 (3% of income) $16,000 Single Annual Limits on Out of Pocket Costs (Based on Purchasing “Basic” Plan) Annual Premium Limits Income If you are
Editor's Notes
- Script: The battle is on. In town hall meetings this month, and on the airwaves, right-wing corporate funded so-called grassroots groups are distorting the debate about health care reform. Ask audience: What have you heard? Here’s some of the things we’ve heard [see text of slide-read it back to them]: All of the claims on the PowerPoint are flat out false, as we’ll explain soon. Some of the myths out there, like the one about rationing of health care, maybe reflect the fact that the issue is complicated, and that health care is so critical to our lives that it involves strong emotions. Some, however, like killing your grandmother – “government-encouraged euthanasia” – reflect deliberate attempts by enemies of reform to distort the facts and scare people. Either way, these claims deserve an answer. The purpose of this presentation is to present the real facts so you can make your own decision about reform. We think when the facts are fully out, people will continue to overwhelmingly conclude that health care reform is critically needed in our community.
- Script: [Go over points 1-2 above.]
- Script: Let’s begin with a “snapshot” of health care in New York State to remind everyone here why reform is necessary: health insurance premiums are going way up in NYS: millions lack insurance or have bad coverage, and tens of thousands are filing bankruptcy due to medical bills. Whether families have health insurance or whether they don’t, people are frightened because they’re sick or because of the possibility they or a family member will become sick. We need Congress to act to make sure all people have health insurance they can count on so they are protected from high medical bills and that they can get the health care they need.
- Script: Right now, Congress is considering different pieces of legislation. Of course, in the end, for the bill to become law, the House of Representatives have to come up with the same bill, and the President has to sign it. The two main bills right now are being worked on by the so-called “Tri-Committee” -- actually 3 committees with jurisdiction over health care working together in the House [Ways and Means; Energy and Commerce; and Education and Labor] -- and the HELP [Health, Education, Labor & Pensions] committee in the Senate, run by Senator Chris Dodd of Connecticut in light of Senator Kennedy’s illness and death. We’re going to talk about now what these bills have in common. When I don’t say “House” or “Senate” bill in this presentation, I mean something that’s in both bills. If something’s in both bills, it has a good chance to pass in the end – although you can never know for sure. It’s important to mention that the Senate Finance Committee hasn’t come up with its bill yet and they have a lot of influence over health care, particularly in the area of revenue! Now, let’s discuss what the House and Senate proposals have in common, with a couple of points about the key differences.
- Script: As I just mentioned, these complex bills have a few key features in common. They’re a broad plan in which individuals, business, and government all have a role in making sure as many people as possible get quality, affordable coverage. And, depending on who you are – an employee who has coverage, an individual who purchases his or her own coverage, a low-income person, etc. you have different ways to obtain coverage, hopefully at an affordable price – that’s the goal. [Read/outline slide] Additions: FPL [Federal Poverty Level] is $73,240 for a family of 3 in 2009, and $88,000 for a family of 4
- Script: [read/outline first two bullets – and continue as follows:] The income levels to qualify for Medicaid, a current program that provides coverage for the poor and the disabled, would be raised, allowing people with slightly higher incomes to enroll, an important step to expand coverage for low-income people. Here in New York, our Medicaid program already admits people up to 150 percent of the FPL. Additions: 150% FPL: $33,075 for a family of 4 and $27,465 for a family of 3 133% FPL: $29,326.50 for a family of 4 and $24,352.30 for a family of 3
- Script: : A central feature of the bill is the requirement that every individual get coverage. In general, the people that are most directly impacted by this requirement are people who don’t have employer-provided coverage or a public program like Medicare or Medicaid. The requirement that everyone get coverage is critical to the plan under each bill. As you know, it was a major point of disagreement in the contest for the Democratic nomination – President Obama was against such a requirement, and Hilary Clinton was for it. One key reason for an “individual mandate” is that we need everyone – including the healthy – to pay into the system to keep costs down. Just like even safe drivers have to have auto insurance, we need an individual health insurance mandate, the argument goes. At the same, the bills try not to impose unreasonable penalties for people who simply can’t or won’t get insurance. The penalty for not obtaining coverage is $750 per year for the Senate, for example. And, as you can see from the slide, there’s no mandate: where affordable coverage is not available (presumably in the region) in the case of the Senate, and financial hardship (presumably by the individual) in the case of the House.
- Script: The main mechanism the Congress has selected to help and to provide incentives for businesses to provide health insurance to their employees where they don’t have it now is outlined on this slide and the next two slides. Its generally called the “pay-or-play” provision – businesses, with exceptions, have to either provide insurance for their employees -- to “play” – or to pay a penalty that will help employees get coverage if they don’t want to do that. The amount they are required to contribute under the House bill, as you can see here, is 72.5% of their employees’ coverage for individuals, but only 65% for families. And the penalty you have to pay varies based on the size of the business’ payroll on a sliding scale, with smaller businesses paying less and big businesses paying more. Businesses with payroll less than $500,000 for the year don’t have to pay a penalty: they are not required to obtain coverage for their employees. Businesses at the low end – with payrolls of $500,000 to $585,000, would have to pay 2% of payroll, and those at the high end – over $750,000 – have to pay 8% of payroll. (The Senate bill has slightly different amounts – I’ll discuss this under the next slide.) Smaller businesses are not left on their own: they will get a significant tax credit that will enormously help that with the cost of providing health care for their employees, if they choose to do that rather than paying the penalty. And its also important to know that the business that are NOT subject to the penalty – those with payrolls under $500,000 can get this tax credit if they choose to provide insurance to their employees. As this slide shows, contrary to the rhetoric out there, very few small businesses are negatively affected by this bill: it was previously estimated that about 4% of small businesses would be subject to the pay or play penalty – and that calculation was made before House leaders reached an agreement to exempt businesses with payrolls below $500,000 – the 4% number is based on the earlier exemption level of $250,000.
- Script: As you can see here, the Senate plan is somewhat different from the House plan. For example, rather than requiring employers to cover 72.5% of premium costs for single coverage, and 65% for family coverage, the Senate only requires that employers to cover 60% of their employees’ premium costs.
- Script: As the slide shows, under both the House and Senate plans, smaller employers – those with less than 50 employees in the case of the Senate and 25 in the case of the House – will get a tax credit to help them cover their employees. For both houses of Congress, only employers with smaller average payrolls – in other words, who don’t have mostly highly paid employees, like law or accounting firms – can get this credit. In case of the Senate, the average payroll must be less than $50,000, and in the case of the House, it must be less than $40,000. In the case of the Senate, the credit is equal to $1000 per employee with single coverage and $2000 for family coverage, and phases out as firm size increases. In the case of the House, the 50% credit is available for firms with 10 or fewer employees, and average wages of $20,000 or less. It phases out as firm size and average wage increase. The benefits to small businesses in our state are shown by the statistics on the slide as to how many businesses would quality for the small business credit: 471,300 businesses in the state would qualify for the House credit.
- Script: If you have to buy health insurance on your own – for example, your employer doesn’t provide health insurance – you can get credits to help you pay for you and your families’ health insurance, as long as your annual income isn’t above a certain level:400% of the federal poverty level, or about $88,000 per year. The credit limits your insurance premium to a certain percentage of your income: the lower your income, the less you have to pay for your health insurance premium each year. For example, as shown on the slide, if a family of 4’s annual income is $29 to $33 thousand dollars, your premium can’t be any higher than 1.5% to 3% of your income. [Go through other examples on the slide if time]. If you make more than $88,000, your health insurance premium can’t be subsidized under either than House or Senate bills. Additions: Source of Federal Poverty Level data (Georgetown University): http://ccf.georgetown.edu/index/cms-filesystem-action?file=statistics/2009%20federal%20poverty%20guidelines.pdf
- Script: Today, and under health care reform, the costs you pay are not just the monthly premiums we’ve been talking about already. People pay huge amounts in out of pocket costs for co-payments on prescription drugs, and for deductibles. If you’re seriously ill, the costs could range in the thousands of dollars per year – and more. Its shocking to say that many of the people we’ve talked about already who are filing bankruptcy due to high medical cost are INSURED. So, both the House and Senate bills have limits on your “out-of-pocket” costs, which insiders and experts sometimes call “cost-sharing.” The idea is to prevent people from facing severe financial distress or even bankruptcy just because you or your family gets seriously ill. Let’s discuss these cost sharing limits now.
- Script: This chart gives you a few illustrations give what certain types of individuals at certain types of income levels will experience under the House bill as an illustration, based on the calculations of the Center for Policy Analysis, a public policy organization that specializes in health care. As you can see from the right column, the annual cost-sharing limits for each year are capped at $5000 for an individual, and $10,000 for a family. That’s admittedly a lot, but the hope is that its not so high that it will cause families to go bankrupt if they face high medical expenses during a short period during their lifetime. [Go through chart quickly.] The family of 4 that makes $90,000/year [bottom box] is not entitled to a subsidy that limits their health insurance premiums, as they earn more than $88,000, 400% of the Federal Poverty Level. However, if you’re over that economic level, at least the $10,000 out-of-pocket limit will you avoid financial disaster.
- Script: Here’s our best information to do as to the provisions of the bills concerning the exchanges and the public plans. [Now follow slide.]
- Script: If you’re currently covered by Medicare, the program for seniors and the disabled, you will continue to be covered, and a few significant improvements will be made to the program. Under the House bill: The so called “donut hole” – in which when you spend a certain amount for your Part D prescription drugs in a year and then suddenly have to pay ALL of the prescription drug costs until your spending really gets enormous – will be closed in a number of years, and 215,200 seniors in New York State will save up to 50% of the donut hole costs in the short term. To encourage preventative services, all out of pocket costs will eliminated for these services. Additions: Explanation of “donut hole” from Wikipedia: “The term "donut hole" refers to a coverage gap within the defined standard benefit under the Medicare Part D prescription drug program. Under the defined standard benefit package, there is a gap in coverage between the initial coverage limit (around $3000/year) and the catastrophic coverage threshold. Within this gap, the beneficiary pays 100% of the cost of prescription drugs before catastrophic coverage kicks in. If you get asked about the $500 billion in Medicare cuts the opponents of reform are discussing, say: “The House changes were recommended by a non-partisan expert advisory body called the Medicare Payment Advisory Commission set up to advise Congress. One of the biggest changes is reducing the overpayments to private health plans in the program – called ‘Medicare Advantage.’ We have to eliminate waste in the system to keep it solvent over the long term – you’ve heard the problems with solvency of Medicare. We can’t protect these overpayments to insurance companies, like under the Medicare Advantage program.”
- Script: : The opponents of health care reform and of immigrants have attempted to split our communities by calling for the most punitive approaches to health care and immigrants. While we don’t have enough time tonight [today] to fully cover this issue, its important to say that its both the most humanitarian course and the best health care policy to cover immigrants – both documented and undocumented, children and adults. Immigrants, for example, pay taxes, such as sales taxes and many pay employment based taxes, like Social Security and the Medicare payroll tax. Refusing them coverage under health care reform, will believe, will have negative consequences for society as a whole, like greater costs for hospitals as sick immigrant adults and children go emergency rooms. Its simply doesn’t make sense to exclude immigrants from basic health care coverage. Nevertheless, to clarify the state of the bills in Congress, here are the true facts about immigrant coverage: [Go over the slides.] We will continue to urge Congress not to cut back on the limited benefits and rights immigrants have been provided under the current bills, and to expand benefits and protections in the current bill for the immigrant community.
- Script: It isn’t just the specific groups I’ve mentioned that will benefit from reform, but our entire community. We’ve provided two examples in this slide on how the House bill would benefit the people in our state in general. First, every year, hospitals and other providers incur thousands of dollars in costs because people without insurance seek treatment, primarily by coming to the emergency room, often for things that could be treated by a primary care physician. Hospitals have to treat these individuals by law. With the funding in the bill, hospitals and other health care providers in New York State will be relieved of billions of dollars every year in reimbursements for this care, called “uncompensated care”, helping them shore up their budgets and protecting health care jobs. And Its estimated that 1.7 million people now without insurance in New York State will be covered. Addressing the problems of health care, therefore, will significantly help all local residents, even those with good health care, and our area economy!
- Script: [Go through slide.] Additions: To quote professor Jacob Hacker, the primary theorist for the public/private plan that HCAN supports and is the basis for the House and Senate bills: “ The public Medicare plan’s administrative overhead costs (in the range of 3 percent) are well below the overhead costs of large companies that are self-insured (5 to 10 percent of premiums), companies in the small group market (25 to 27 percent of premiums), and individual insurance (40 percent of premiums).” Jacob S. Hacker, The Case for Public Plan Choice in National Health Reform , Institute for America's Future (undated but apparently completed in December 2008), p. 6, at http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf (June 25, 2009).
- Script: Time doesn’t permit us to go through every single myth that’s being spread out there, but here’s a few ones that we didn’t have time to discuss. [Read the 3 bullets.] Since the opponents of the bill are apparently going to continue their campaign of distorting the bills in Congress, and outright lying, we need to consult sources of reliable information. A few of them are listed on the slide. Additions: Links to reliable sources on the bill will be posted on the web page of Citizen Action’s sister organization, www.citizenactionny.org.