HEALTH CARE REFORM…

 

by Woodie Kessel, MD, MPH

Assistant U.S. Surgeon General, USPH, (Ret.)Professor of the Practice of Public Health

Department of Family ScienceSchool of Public Health, University of Maryland

Spring 2011

*Insurance Reform - System Reform - Coverage Reform - Care Receipt

“I am not the first President to take up this cause, but I am determined to be the last.”

• Uncovered• Uninsured• Unaffordable

• Security and Stability • Supply Insurance • Slow Costs

Health Care Facts Quizhttp://facts.kff.org/

• US Health spending averaged $8,086 / person in 2009, totaling $2.5 trillion (17.6%) GDP; >2x since 1970

• Approximately 1% of the U.S. population was responsible for 21% of health care spending in 2006

• 50 million nonelderly Americans were uninsured in 2010, and 8/10 were in families with at least one worker

• Medicare covers 44 million Americans (16% <65 and disabled) at a projected cost of $420 billion in 2009

• Medicare accounts for ~14% of federal budget, ~7% accounted for by Medicaid; [SS (22%) / DoD(20%)]

• Employers provide health benefits for about 159 million people (53%) of all Americans;

• However, the percentage of employers who offer such benefits has been falling: 69% in 2000 vs 63% in 2008

• The average employer premium was $12,680 in 2008; of which covered workers paid ~27% or $3,354

• Since 1999, family premiums have increased 119%; wages have gone up 34%; inflation has gone up 29%

• Since 1982, increases in health spending/capita have exceeded increases in the CPI; 5.1% vs. 2.8% in 2007

• In 2005 24% of Medicaid enrollees [elderly or disabled] accounted for 70% of the program's $275 billion

• Only 30% of spending was for the 45 million [children and adults] who make up 76% of total enrollment

• Medicaid pays 40% of all the nation's long-term care costs; the largest payer for long-term care

• More than half of American adults surveyed (55%) barely give the quality of American health care a passing grade—a C or D on a standard report card scale; More than one in 10 (11%) give the quality of care an F. In addition, nearly half (47%) of Americans give the quality of hospital care in the country a rating of C, D or F.

http://healthreform.kff.org/quizzes/health-reform-quiz.aspx

Hx of US Health Reform George Santayana famously said: "Those who cannot remember the past are condemned to repeat it. “

W5H

• 2000 BC Practices of insurance to protect people from loss of property or shipping wares• In Mesopotamia, under the Code of Hammurabi, people of high status paid the successful surgeon more, but the cost of a

failed surgery carried higher costs for the surgeon - compensation and liability were determined by the patient (Price 2001).• The home has long been the locus for health care - birth to disease care to surgery. • 1847 “health” insurance plans became available in the US as accident insurance providing coverage for injury related to travel

by railroad or steamboat offered by the Massachusetts Health Insurance Co; • Sickness insurance tended to provide supplementary income compensating for wages lost from missing work rather than

payment for medical expenses• 1850-1870: Louis Pasteur, Joseph Lister - understanding of bacteriology, antisepsis, and immunology.• 1870-1910: Identification of various infectious agents including spirochaeta pallida (syphilis), typhus, pneumococcus, and

malaria. Diphtheria antitoxin developed. Surgery fatality rates fall.• 1887: S.S.K. von Basch invents instrument to measure blood pressure.• 1895: Wilhelm Roentgen develops X-rays• 1900 “the state of medical technology generally meant that very little could be done for many patients, and that most patients

were treated in their homes” (Thomasson 2003). As medicine became more advanced, treatment gradually moved out of the home and into health centers, and hospitals as microbiology demonstrated the importance of antiseptic procedures

• 1919 State of Illinois study reported that lost wages due to sickness were four times larger than the medical expenditures associated with treating the illness

Hx of US Health Reform George Santayana famously said: "Those who cannot remember the past are condemned to repeat it. “

Hx of US Health Reform George Santayana famously said: "Those who cannot remember the past are condemned to repeat it. “

• 1912 President T Roosevelt and Progressive party endorse social insurance, including health insurance. • 1912 National Convention of Insurance Commissioners develops first model of state law for regulating

health insurance.• 1915 The American Association for Labor Legislation (AALL) publishes a draft bill for compulsory health

insurance AMA opposed. • 1921 Sheppard-Towner Act provided matching funds to states for prenatal and child health centers. • 1927 Committee on the Costs of Medical Care forms to study the economic organization of medical

care. • 1929 Baylor Hospital introduces a pre-paid hospital insurance plan for a group of school teachers -

forerunner of Blue Cross plans. • 1929 The Great Depression spans a decade, with 1933-34 being the worst years.• 1934 FDR creates Committee on Economic Security to address old-age, unemployment, medical care

and insurance. • 1935 Committee on Economic Security issues final recommendations and report "Risks to Economic

Security Arising Out of Illness."• 1935 Social Security Act and includes Title V grants for Maternal and Child Health. • 1937 Committee on Medical Care established to Coordinate Health and Welfare; Publishes report, A

National Health Program • 1939 Sen. Wagner introduces National Health Bill incorporating recommendations from the 1938

National Health Conference

Hx of US Health Reform George Santayana famously said: "Those who cannot remember the past are condemned to repeat it. “

• 1939 Physicians start to organize the first Blue Shield plans to cover the costs of physician care. • 1939 Department of Health and Human Services born as the Federal Security Agency • 1943 War Labor Board rules wage freeze does not apply to fringe benefits, including health insurance

benefits.• 1943 Senators Wagner and Murray, Representative Dingell introduce legislation for universal

comprehensive health insurance • 1944 FDR outlines 'economic bill of rights' including right to adequate medical care and enjoy good

health in State of the Union 1944 Social Security Board calls for compulsory national health insurance as part of the Social Security system.

• 1945 President Truman picked up the mantle for a national health program just months after the end of World War II.

• 1946 Hill-Burton Act to fund the construction of hospitals prohibits discrimination on the basis of race, religion, or national origin

• 1948 Truman's reelection was mandate for national health insurance, but fear of socialism/federal role in health care blocked success

• 1948 National Health Assembly in Washington endorsed voluntary health insurance and reiterated universal coverage need.

• 1948 AMA launches a national campaign against national health insurance proposals.• 1948 I was born

Hx of US Health Reform George Santayana famously said: "Those who cannot remember the past are condemned to repeat it. “

• 1949 Supreme Court upholds National Labor Relations Board ruling that employee benefits can be included in collective bargaining.

• 1951 Joint Commission on Accreditation of Hospitals formed to improve the quality of hospital care • 1952 Federal Security Agency proposes enactment of health insurance for Social Security beneficiaries.• 1953 Federal Security Agency made cabinet level renamed Department of Health Education and

Welfare (DHEW)• 1954 President Eisenhower proposes a federal reinsurance fund to enable private insurers to broaden

the groups of people covered. • 1954 Revenue Act excludes employers’ contributions to employee’s health plans from taxable income. • 1956 Military “medicare” program enacted, providing government health insurance for dependents of

those in the Armed Forces. • 1957 AFL-CIO decides to support government health insurance, while the AMA reiterates opposition to

national health insurance.• 1960 Federal Employees Health Benefit Plan (FEHBP) initiated to provide health insurance coverage to

federal workers.• 1960 Kerr-Mills Act passes, using federal funds to support state programs providing medical care to the

poor and elderly• 1962 President Kennedy addresses the nation from Madison Square Garden to support Medicare; AMA

issues televised rebuttal.• 1964 Civil Rights Act passes.

Hx of US Health Reform George Santayana famously said: "Those who cannot remember the past are condemned to repeat it. “

• 1965 The Medicare and Medicaid programs signed into law by President Johnson as Truman watches• 1965 Neighborhood health centers are established to provide health and social services to poor and

medically underserved • 1967 Social Security amended - Early and Periodic Screening and Diagnostic Testing (EPSDT) added to

Medicaid• 1970 General inflation and unchecked health care costs were a growing concern• 1971 Sen. Kennedy’s national health insurance proposal was countered by President Nixon’s

Comprehensive Health Insurance Plan • 1971 Wage and price freezes begin, with specific limits on annual increases for physicians and hospitals • 1972 Supplemental Security Income (SSI) program provides cash assistance to elderly and disabled. • 1972 SSA amended allowing people <65 with long-term disabilities and end stage renal disease (ESRD)

to qualify for Medicare • 1974 Hawaii Prepaid Health Care Act passes requires employers to cover employees working > 20hr/wk • 1974 Employee Retirement Income Security Act (ERISA) exempts self-insured employers from state

health insurance regulations.• 1974 Enactment of Health Planning Resources Development Act, mandating health planning programs

to prevent duplication • 1975 With stagflation and rapidly rising health care costs, President Carter prioritizes cost containment

over expanding coverage• 1977 I arrive in Washington

Hx of US Health Reform George Santayana famously said: "Those who cannot remember the past are condemned to repeat it. “

Children’s Health Assessment Program for poor children under age 6; National Medical Care Expenditure Surveys (NMCES) conducted surveying households, their physicians, and health insurers – provides first detailed data on individuals’ health care costs; DHEW renamed DHHS; Medicaid payments to hospitals who serve a disproportionate share of Medicaid and low-income patients; Medicaid waivers to mandate managed care enrollment of certain Medicaid groups and to cover home and community-based long-term care; Katie Beckett option for the disabled child; Medicare introduces Diagnostic Related Groups (DRGs) as a prospective payment system for hospital payment; Emergency Medical Treatment and Active Labor Act (EMTALA) requires hospitals to screen and stabilize all persons who use their emergency rooms regardless of ability to pay; COBRA (Consolidated Omnibus Budget Reconciliation Act) contains specific regulations that allow employees who lose their jobs to continue with their health plan for 18 months; OBRA 86 gives states Medicaid option to cover infants, young children and pregnant women up to 100% of the poverty level regardless of whether they receive public assistance. Raised to 185% of the poverty level in legislation for infants and pregnant women the following year; Census Bureau begins annual estimate of health insurance coverage in US with Current Population Survey and finds 31 million uninsured (13% of the population) in 1987; National Medical Expenditure Survey (NMES); The Family Support Act requires states to extend 12 months of transitional Medicaid coverage to families leaving welfare due to earnings from work; OBRA 89 mandates coverage for pregnant women and children under age 6, at 133% of the federal poverty level; Clinton Health Security Act; National Committee on Quality Assurance (NCQA) forms to accredit managed care health plans; “Health Security Card” to ensure access to care; The Vaccines for Children program providing federally purchased vaccines to states is established; Health Insurance Association of America begins airing “Harry and Louise” television advertisements portraying a middle-class couple worried about health care under the Clinton health plan; Health Insurance Portability and Accountability Act (HIPAA) restricts use of pre-existing conditions in health insurance coverage determinations, sets standards for medical records privacy, and establishes tax-favored treatment of long-term care insurance; Personal Responsibility and Work Opportunity Act delinks Medicaid and cash assistance eligibility and allows states to cover parents and children at current Aid to Families with Dependent Children (AFDC) levels and higher. Medicaid coverage banned for legal immigrants within their first five years in the country, except for emergency care; Mental Health Parity Act; Medical Expenditure Panel Survey (MEPS) is conducted and designed to be ongoing; Balanced Budget Act includes many changes in provider payments to slow the growth in Medicare spending and a new structure for Medicare HMOs and other private plans; 1997 State Children’s Health Insurance Program (S-CHIP) is enacted; Ticket to Work and Work Incentives Improvement Act of 1999 allows states to cover working disabled with incomes above 250% of poverty and impose income-related premiums; Breast and Cervical Cancer Treatment and Prevention Act of 2000; Health Center Growth Initiative expands number of community health centers; Maine passes the Dirigo Health Reform Act, a comprehensive health care reform plan; Medicare Drug, Improvement, and Modernization Act (MMA) passes, creating a voluntary, subsidized prescription drug benefit under Medicare, administered exclusively through private plans, both stand-along prescription drug plans and Medicare Advantage plans; Health Savings Accounts created; Medicare Part D Drug benefit; Massachusetts passes health reform to provide health care coverage to nearly all state residents and uninsured rate is cut in half; Vermont passes comprehensive health care reform; City of San Francisco creates the Healthy San Francisco program; Senators Wyden and Bennett introduce the Healthy Americans Act; Census Bureau estimates 45.6 million uninsured (15.3% of the population) in 2007; Congress passes two versions of a bill to reauthorize the State Children’s Health Insurance Program with bi-partisan support, but President Bush vetoes both bills and Congress cannot override the veto. A temporary extension of the program is passed in December 2007; Mental Health Parity Act amended to require full parity; Housing crisis and economic downturn; The Children’s Health Insurance Program is reauthorized; The American Reinvestment and Recovery Act (ARRA); FY 2010 budget which outlines eight principles for health reform and sets aside $630 billion in a health reform reserve fund. 

Kennedy Calls On President Bush To Get

Children The Health Care They Need

Fri, 11/02/2007 - 13:51 — newsdesk

AP Photo: Sen. Edward Kennedy, D-Mass., right, accompanied by former Assistant Surgeon General Dr. Woodie Kessel, discusses...

November 1, 2007 -- "It’s a privilege to join my colleagues to support children’s health. I commend too the former Assistant Surgeon General, Dr. Woodie Kessel for his courage in speaking out for children. He has worked tirelessly for children’s health in Republican and Democratic Administrations alike – and he recognizes that a strong, bipartisan CHIP bill is the most important step we can take to improve the health of America’s children.

We’re here today to say there’s no higher priority in America than our children. When we shortchange our children, we shortchange our future.

It’s almost unimaginable that an American President could tell American parents that we can’t afford health care for American children.

Percentage of Children Without Health Insurance, By Poverty Level, 1997-

2005

Notes: Survey method change in 2005 affects comparison with earlier years slightly. Children less than 18 years old.Source: L. Ku, “Medicaid: Improving Health, Saving Lives,” Center on Budget and Policy Priorities analysis of National Health Interview Survey data, August 2005.

Children below 200% of poverty

Children above 200% of poverty

23%

14%

6%5%

21%

5%

Who are the Stakeholders?• Patients• Health Professionals• Insurers• Hospitals• Pharmaceuticals • Medical Suppliers• Employers• Government• Taxpayers• Lawyers• US

• Acute Care• Affordability• Age• AMA• Behavior• Bureaucratic• Budgets • Choice• Chronic Disease• Claim Denial• Competition• Copayment• Cost• Cost Containment• Cost Sharing• Cost Shifting• Coverage

• Medical Home• Medical records• Medications• MSA• Nurses• Options• OT, PT, EMT • Outcomes• Out-of-pocket• Patient-centered• Pharmacists• Physicians• Politics• Politics• Preexisting Conditions• Premiums• Prevention

• Dentists• Drug companies• Economy• Elective• Emergency Room• Employer-based • Employment• Equity• Expectations• Fairness• Government• Health promotion• Insurance• Lawyers• Long term care• Malpractice• Media

• Private• Procedures• Profits• Public Health• Quality• Rehab• Reimbursement• Risk pools• ROI Short - Long • SES• Standards• States• Taxes• Tests• Technology• Underinsured• Value

What are the issues?

Distribution of National Health Expenditures, by Type of Service, 2009

Note: Other Personal Health Care includes, for example, dental and other professional health services, durable medical equipment, etc. Other Health Spending includes, for example, administration and net cost of private health insurance, public health activity, research, and structures and equipment, etc.

Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2009; file nhe2009.zip).

Average Annual Health Insurance Premiums and Worker Contributions for Family Coverage, 2000-2010

Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2000-2010.

$6,438

$13,770

147% Worker

Contribution Increase

114% Premium Increase

Insurance and Poor Health

Un/under insured:• get less care and less timely care, especially preventive

and screening services• are sicker when diagnosed, receive fewer therapeutic

services and have poorer health outcomes (higher mortality and disability rates)

• have greater financial burdens and lower annual earnings because of poorer health

Bovbjerg and Hadley; Why Health Insurance is Important; Urban Institute 2007http://www.commonwealthfund.org/Content/Newsletters/States-in-Action/2009/Mar/February-March-2009.aspx?view=newsletter_print#HealthReformhttp://ccf.georgetown.edu/index/cms-filesystem-action?file=ccf%20publications/federal%20schip%20policy/chip%20summary%2003-09.pdfCindy Mann, JD; Center for Children and Families; Georgetown University Health Policy Institute Hadley, Jack. “Sicker and Poorer – The Consequences of Being Uninsured: A Review of the Research on the Relationship between Health Insurance, Medical Care Use, Health, Work, and Income,” Medical Care Research and Review (60:2), June 2003.

Poor Child Health

• can limit childhood growth and development• associated with lower educational attainment • predictive of poor adult health• reduces annual earnings by 15 to 20%, either through

reduced work hours or hourly wages

C Perry, L Blumberg; Making Work Pay II: Comprehensive Health Insurance for Low Income Working Families; The Urban Institute July 2008; RWJF Overcoming Obstacles to Health; February 2008

Payment Sources for Uncompensated Care, 2004

Federal Dollars

$24 Billion(58%)

State Dollars$11 Billion

(27%)

Private Dollars

$6 Billion(15%)

Total = $40.7 Billion

SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of data from Hadley, J. and J. Holahan. 2004. The Cost of Care for the Uninsured: What Do We Spend, Who Pays, and What Would Full Coverage Add to Medical Spending? KCMU, Issue Update, May 2004.

U. S. President Barack Obama's signature on the health insurance reform bill is shown at the White House, March 23, 2010. The historic $938 million health care bill will guaranteed coverage for 32 million uninsured Americans and will touch nearly every American's life. UPI/Chuck Kennedy/White House

• Small Business Tax Credits • No Pre-existing Coverage Exclusions for Children • Access to Affordable Coverage for the Uninsured with Pre-existing

Conditions • Closing the Coverage Gap in the Medicare (Part D) Drug Benefit • Patient Protections • Re-insurance for Retiree Health Benefit Plans • Extension of Coverage for Young Adults • Prevention Benefits / Wellness Visits in Medicare • Access to Quality Care for Vulnerable Populations • Ensuring Value for Premium Payments • No Lifetime Limits on Coverage • Regulated Annual Limits on Coverage • Protection from Rescissions of Existing Coverage • Prohibits Discrimination Based on Salary • Public Access to Comparable Information on Insurance Options • Health Insurance Consumer Information • Appeals Process • Increasing the Number of Primary Care Providers and Compensation• New, Voluntary, Long-Term Care Insurance Program

2010 Changes

Individual MandatesStarting in 2014 require most Americans to have minimum level of health insurance or

else pay a penalty.

• Penalty: In 2014, $95 a year or 0.5% of a household’s income, whichever is greater; in 2015, $495 or 1% of income; in 2016, $750 or 2% of income (maximum of $2,250 for a family). Penalty adjusted for inflation after 2016.

• Exemptions: American Indians; people with religious objections; people with financial hardship; people without coverage <= 3 months; households with income below 100 % of FPL ($22,050 / family of 4 in 2009); households paying > 8% of income on premiums for the cheapest available

ChildrenChanges to the Children’s Health Insurance Program, which

benefits children of the working poor.

• Children now enrolled in CHIP would continue to receive coverage through the program. The bill would provide money to extend the program for two more years, through 2015.

• States would be required to maintain current coverage levels for children enrolled in CHIP and Medicaid until 2019.

• Beginning in 2014, states would receive higher federal reimbursement for the program’s beneficiaries, increasing from an average of 70 percent to 93 percent.

Illegal ImmigrantsLimit access to the exchange and federal subsidies for

illegal immigrants.

• Could not buy insurance from the exchanges, even if they were able to pay the full cost themselves, without federal subsidies.

Medicare Drug BenefitWould close a gap in Medicare coverage of prescription drugs, known

as the doughnut hole, by 2020.

• Would increase the amount of drug costs covered by Medicare by $500 in 2010. And beginning on July 1, 2010, drug makers would provide 50 percent discounts on brand-name drugs and biologics that low- and middle-income beneficiaries have to pay for themselves once the coverage gap begins. Currently, older Americans in the coverage gap pay 25 percent of the cost of their drugs up to $2,830 in out-of-pocket spending, then the full cost of drugs up to $6,300 — a $3,470 “doughnut hole” — after which Medicare catastrophic coverage kicks in and seniors pay only 5 percent of the cost of additional drugs.

Defining BenefitsRequire insurance plans to offer a minimum package of

health insurance benefits, including prevention, to be defined by the federal government.

• The basic plan would cover 60 percent of the cost of the benefits. The proposal would limit out-of-pocket costs at $5,950 year for an individual and $11,900 for a family.

• The exchanges would offer three other benefit plans, covering 70 percent to 90 percent of costs. A plan for catastrophic coverage would be available to people up to the age of 30 and those who are exempt from the requirement to obtain insurance.

Continuum of Coverage

• Protection – keeping safe from danger, attack, or harm

• Preparedness – made ready beforehand for action

• Prevention –not experiencing signs or symptoms 1o, 2o, 3o

• Promotion – achieving full potential, growth and

development

Dependent CoverageWithin six months, require health plans, including employer-sponsored plans, to cover children of policyholders up to a

certain age.

• Would allow children to stay on their parents’ insurance plans until they turn 26. Currently, states set the age at which adults can no longer be covered by their parents’ insurance

Long-term CareStarting in 2011, establish a voluntary federal program to

provide long-term care insurance and cash benefits to people with severe disabilities.

• The program would be financed with premiums paid by participants, through voluntary payroll deductions, with no federal subsidy. People could qualify for lifetime benefits if they became disabled after paying premiums for at least five years and working for three of those years. Individuals who have substantial cognitive impairments or are unable to perform two or three “activities of daily living,” like eating, bathing or dressing, would qualify.

• The amount of benefits would vary, depending on the degree of a person’s disability, but could not average less than $50 a day. The Congressional Budget Office assumes that premiums would be $123 a month for benefits expected to average $75 a day, or about $27,000 a year. The amount of benefits would vary, depending on the degree of a person’s disability. The secretary of health and human services could increase premiums to ensure “the financial solvency” of the program over 75 years.

AbortionProhibit use of federal money for abortions, except as

allowed by current law — in cases of rape or incest or if the life of a pregnant woman was in danger.

• Health plans could choose whether to cover abortion or not. But states could prohibit the coverage of abortions by health plans that are offered for sale through the new insurance exchanges.

• People who receive federal subsidies to buy insurance could enroll in health plans that cover abortion. But subscribers of health plans that cover abortion would have to make two separate monthly premium payments: one for all insurance coverage except abortion and one for abortion coverage.

• Health plans that offer abortion coverage and receive federal subsidies would be required to segregate the federal money into separate accounts and use only the premium money and co-payments contributed by consumers to cover the procedure. State insurance commissioners would police the “segregation of funds.”

Insurance ExchangeCreate health insurance marketplaces to shop for insurance, compare prices

and benefits, by 2014.

• States would form their own exchanges. Several states could join together to form a regional exchange.

• Open to people who do not have qualifying coverage through an employer or a public program.

• Open to employers with 100 or fewer workers. Starting in 2017, states could allow employers with more than 100 employees to participate in the exchange.

Public PlanWould not create a new government insurance plan to

compete with private insurers

• The federal Office of Personnel Management, which provides health benefits to federal employees, would sign contracts with insurers to offer at least two national health plans to individuals, families and small businesses. The new plans would be separate from the program for federal employees, and premiums would be calculated separately. At least one of the plans would have to operate on a nonprofit basis.

Subsidies for IndividualsStarting in 2014, provide tax credits to low- and middle-income people to help them buy insurance through the

exchange.

• Would provide tax credits, on a sliding scale, to people with incomes up to 400 % of FPL ($88,200 for a family of four) to help pay insurance premiums and out-of-pocket costs like co-payments and deductibles.

• Households in the lowest income group — those below 150 % of the poverty level ($33,075 for a family of four) would pay 2% to 4.6%of their income on premiums. Health plans would cover 90 %t of the cost of the benefits.

• Households in the highest income group eligible for subsidies — those between 350 % and 400 % of FPL ($77,175 to $88,200 for a family of four) would pay 9.8 % of their income on premiums. Health plans would cover 70 % of the cost of the benefits.

• Subsidies would increase at the same rate as the increase in premium contributions from the previous year.

Employer ContributionStarting in 2014, penalize some employers if low- and middle-income workers

use federal subsidies to buy insurance

• Employers with 50 or more full-time workers would pay a penalty if they do not offer health benefits and if any of the workers obtain subsidized coverage through the new health insurance exchanges.

• Penalty: $750 for each full-time worker in the company.• Employers with more than 50 workers that offer coverage would also pay a

penalty if any of the workers obtain subsidies to buy insurance. In this case, the penalty would be $3,000 for each employee who receives subsidized coverage, or $750 for each full-time worker in the company, whichever is lesser.

• Employers who offer coverage would be required to provide vouchers — equal to what the employer would have paid under the company’s plan — to low- and middle income workers to obtain insurance on their own through the exchanges. These firms would not be subject to penalties if any of the employees receive subsidies. People with incomes up to 400 percent of the federal poverty level ($88,200 for a family of four) would be eligible for the vouchers if they spend between 8 and 9.8 percent of their income on premiums.

Subsidies for EmployersStarting in 2010, provide tax credits to small businesses that want to offer coverage. Subsidize employer plans that cover

early retirees ages 55 to 64.

• Employers with 25 or fewer workers and average wages of $50,000 or less could qualify for tax credits. Employers with 10 or fewer workers and average wages of less than $25,000 can get the full credit — up to 35 percent of premium costs between 2010 and 2013 and 50 percent thereafter. The credit would phase out as firm size and average wage increases.

• The federal government would cover 80 percent of the cost of a retiree’s medical claims of more than $15,000 through 2013, with a cap at $90,000 — at which point the employer’s plan would pay the rest.

Expand MedicaidStarting in 2014, expand Medicaid to cover millions of

additional people, including parents and childless adults who are not eligible under current rules.

• Would cover everyone with incomes less than 133 percent of the poverty level ($29,327 for a family of four).

• Estimated number of new recipients: 16 million.• From 2014 to 2016, the federal government would pay

all of the costs for covering the newly eligible. The share of federal spending would vary somewhat from year to year after 2016, but would average about 90 percent by 2019, according to the Congressional Budget Office. Currently, the federal government pays about 57 percent, on average, of the costs of Medicaid benefits. Nebraska is the only state that would receive 100 percent of the cost of expanding Medicaid.

Insurance RegulationsProhibit insurers from denying coverage or charging higher premiums because of a person’s medical history or health

condition.

• People with pre-existing conditions who have been turned down for health insurance could sign up for a high-risk insurance pool that would be available within 90 days and remain available until 2014. Within six months, insurers would be prohibited from denying coverage to children based on pre-existing medical conditions, from placing lifetime dollar limits on coverage and from rescinding coverage when a person becomes sick or disabled. The ban on exclusion based on pre-existing conditions would be extended to every one when the exchanges are operational in 2014.

• Premiums for older people cannot be more than three times the premium for young adults.

• Insurers competing in the new exchanges would be required to justify rate increases and those who raise prices excessively could be barred from the exchanges.

• Insurers would be required to spend more of their premium revenues — between 80 to 85 cents of every dollar — on medical claims. According to a recent Senate Commerce Committee analysis, the largest for-profit insurance companies spend about 74 cents out of every dollar on medical care in the individual market.

Costs and Coverage10-year estimates of the cost of the legislation from the

Congressional Budget Office.

• $871 billion. Expected to reduce projected federal budget deficits by $132 billion.

• 32 million people would gain coverage, leaving 23 million uninsured.

Paying for ITImpose new fees and taxes. Curb Medicare payments to

hospitals and many other health care providers.

• TAX ON HIGH-COST HEALTH PLANS: Starting in 2014, would impose a 40 percent excise tax on high-cost employer-sponsored group health plans with premiums over $8,500 for individual coverage and $23,000 for family. The thresholds would rise each year by the inflation rate plus one percentage point. The bill would provide a special dispensation to police officers, firefighters, miners and construction workers, who have high premiums because they work in high-risk occupations.

• MEDICARE PAYROLL TAX: Starting in 2013, would increase tax rate — from 1.45 percent to 2.35 percent – for individuals earning more than $200,000 a year and families earning more than $250,000.

• FEES FROM HEALTH CARE SECTOR: Would impose annual fees, allocated by market share, on health care companies. Starting in 2010, drug makers would pay $2.3 billion a year. Manufacturers of medical devices would pay $2 billion in 2011 and $3 billion after 2017. For insurance companies, the fee would start at $2 billion in 2011 and gradually increase to $10 billion a year in 2017. Nonprofit insurance companies could be exempt if they spent a large share of their premiums on medical care rather than administrative costs.

• FLEXIBLE SPENDING ACCOUNTS: Starting in 2011, would place a $2,500 annual limit on what people can set aside from their paychecks before paying taxes to use for health care expenses.

• TANNING TAX: Would impose a 10 percent tax on indoor tanning services starting in 2010.

• MEDICARE SAVINGS: Squeeze roughly $500 billion out of the projected growth in Medicare over 10 years, including $116 billion in cuts to federal subsidies for privately offered Medicare Advantage plans.

Health Insurance Literacy

http://www.youtube.com/watch?v=Dt31nhleeCg

"Harry and Louise" 

http://www.youtube.com/watch?v=RGvkZszS21Y

1993

2009

CHART 53

Views on Health Reform Remain Divided

14% 14%

10%

14%12% 11%

15%18% 18%

9%

46%

50% 49%

42% 42%

40%

44%

41%

35%

45%

40%

44%

40% 41%

50%

41%

48%

43% 42% 41%

0%

20%

40%

60%

80%

Apr10 May10 Jun10 Jul10 Aug10 Sep10 Oct10 Nov10 Dec10 Jan11

Favorable

Don’t know/Refused

Source: Kaiser Family Foundation/Harvard School of Public Health The Public’s Health Care Agenda for the 112th Congress (conducted January 4-14, 2011) and Kaiser Family Foundation Health Tracking Polls

As you may know, a health reform bill was signed into law early last year. Given what you know about the health reform law, do you have a generally favorable or generally unfavorable opinion of it?

2010

Implemented • No pre-existing condition exclusions for

children (72% favorable)• Extend dependent coverage to age 26

(53% favorable)• No out-of-pocket costs for preventative

services (70% favorable)• No cancellation of coverage except for

fraud (68% favorable)• High risk pool for people with pre-

existing conditions (61% favorable)• Small business health insurance tax

credits (71% favorable)• Drug rebates for Medicare beneficiaries

(64% favorable)

Implemented by 2014• Guaranteed access to insurance regardless of

your health(69% favorable)

• Insurance exchanges to make it easier to buy coverage (87% favorable)

• Tax credits to make insurance more affordable for low and middle income people (76% favorable)

• Expanded Medicaid coverage for low income people(71% favorable)

• A requirement that people have insurance (70% Unfavorable)

• Penalties for employers that don't offer coverage to workers (51% favorable, 47% unfavorable)

• Challenges and opportunities to mobilize public interest in health reform

• Linking solutions to individual concerns, particularly affordability is key

• http://healthreform.kff.org/the-animation.aspx

• http://www.youtube.com/watch?v=3-Ilc5xK2_E&feature=player_embedded#at=158

http://healthreform.kff.org/timeline.aspx

Insurance / IndemnificationInsurance / Indemnification

An economic form of risk managementAn economic form of risk management The practice of appraising / controlling risk The practice of appraising / controlling risk A hedge against the risk of a contingent lossA hedge against the risk of a contingent loss The transfer of that risk for a premiumThe transfer of that risk for a premium A means of compensation for incurred hurt, A means of compensation for incurred hurt,

loss, or damageloss, or damage

The DebateCosts / Benefits

reform [noun] [1663]

amendment of what is defective, vicious, corrupt, or depraved

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receive [verb] [1400]

acquire or accept delivery of something

vs

of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

The United States Constitution was adopted on September 17, 1787, by the Constitutional Convention in Philadelphia, Pennsylvania

Always start the day with a smile—that way you get it over with.

~Oscar the Grouch

…About Attitude