HEALTH CARE REFORM ANDWHAT IT MEANS TO YOU

Theresa DeLaine, MLIS, MBA April 14, 2011

Disclaimer Statement

I declare and affirm under the penalties of perjury that this presentation is a collection of my experiences, resources, and viewpoints. I am not authorized in anyway to present the viewpoints or opinions of my former, current or future employers. In turn, they accept no responsibility for my individual experiences and opinions in this particular presentation.

Agenda

• Current Health Care Statistics• What is Health Care Reform?• What’s In It for You?• Pros of Health Care Reform• Cons of Health Care Reform• Current Challenges • Key Takeaways• Questions

Health Care Reform Is Needed

U. S. Census Bureau

Current Health Care Statistics-Health Insurance

• In 2006, 47 million uninsured:

• Coverage was provided through an employer-59.7%

• Individuals purchasing coverage-9.1%

• Government-funded coverage-27.0% (Medicare, Medicaid, Military)

US Census Bureau

Current Health Care Statistics-Health Insurance

• Medicare covers most of the health care for individuals over 65 years and the disabled.

• Accounts for 13.6% of health care coverage in 2006.

• Medicaid accounted for 12.9% of coverage in 2006 for low-income individuals.

• Funded jointly by Federal and state governments

National Center for Health Statistics

Current Health Care Statistics-Health Expenditures

• U.S. spends 2X as much on health care per capita ($7,129) which is more than any other country.

• In 2005, personal health care expenditures were paid by private health insurance-36%, federal government-35%, state and local governments-11%, and out-of-pocket payments-15%.

Health Affairs

Current Health Care Statistics-Health Expenditures

• 75% of all health care dollars are spent on patients with one or more chronic condition (some are preventable)Diabetes ObesityHeart Disease Lung DiseaseHigh Blood PressureCancer

Kaiser Family Foundation

Current Health Care Statistics-Health Expenditures

• Average family health insurance premium provided by an employer health benefit program was $11,480 (2006).

• Employees paid $2,793 towards the premium amount.

• From 2000 to 2006, overall inflation increased 3.5%, wages increased 3.8% and health care premiums increased 87%.

Committees on Ways & Means, Energy & Commerce and

What Is Health Care Reform?

• Called “Protection and Affordable Care Act”• Enacted on March 23, 2010. Complete law

will be phased in through 2018• 2,700 page document• Provides coverage for more than 95% of all

Americans • Reduces the deficit by $138 billion over next

ten years, with future reductions more than $1.2 trillion in the next decade

CBSnews.com

Health Care Reform

• Illegal immigrants will not be allowed to buy health insurance in the exchanges.

• In 2014, everyone must purchase health insurance or face a $695 annual fine. There are some exemptions for low-income people.

• No health care plan will be required to offer abortion coverage.

CBSnews.com

Health Care Reform

• Starting in 2014, insurance companies cannot deny coverage to anyone with pre-existing conditions.

• Federal government pays 100% of costs for covering newly eligible individuals through 2016.

• The law will require states to expand Medicaid to include childless adults starting in 2014.

CBSNews.com

Health Care Reform

• Medicaid expands to include 133% of federal poverty level, which is $29,327 for a family of four.

• Law requires a 10% excise tax on indoor tanning services.

• Increase the hospital tax rate by 0.9% points on an individual taxpayer earning over $200,000 ($250,000 for married filing jointly), in 2013.

What’s In It For You?

HealthCare.gov

Families with Children

• Can add or keep your children on your health insurance policy until they turn 26 years old

• Young adult children can join or remain on your plan whether or not the are:

• Married, living with you, In school, Financially dependent on you, or Eligible to enroll in their employer’s plan

HealthCare.gov

Families with Children

• There will be a 3.8% tax on investment income for families making more than $250,000/year and ($200,000 for individuals).

• Starting in 2018,insurance companies will pay 40% excise tax on “Cadillac” high-end insurance plans worth over $27,5000 for families ($10,200 for individuals). Dental and vision plans are exempt and not counted in total cost of a family’s plan.

HealthCare.gov

Families with Children

• Exception: Until 2014, “grandfathered”group plans do not have to offer dependent coverage up to age 26, if a young adult is eligible for group coverage outside their parent’s plan.

HealthCare.gov

“Grandfathered” Plans

• If you have health care coverage from a plan that existed on March 23, 2010. This has covered at least one person continuously from that day forward—the plan is considered to be “grandfathered”.

• This provision prohibits lifetime dollar limits to key health benefits.

HelathCare.gov

“Grandfathered” Plans

• These plans are not permitted to cancel insurance coverage solely because of an honest mistake made on your insurance application.

• Must extend dependent coverage to an enrollee’s adult children until they turn 26 years.

• These protections are added to your plans on or after September 23, 2010.

HealthCare.gov

Seniors/Retirees

• Medicare covers somepreventive care without charging the Part B deductibles and coinsurance.

• Free annual wellness examination

• Medicare benefits are not being reduced or taken away.

• Can choose your own physicians

HealthCare.gov

Seniors/Retirees

• Law creates CLASS (Community Living Assistance Services & Support for people needing help with activities of daily living, after 2012.

• CLASS is a voluntary, enrollment-based insurance program to provide resources for activities of daily living in the home.

• Patients will get a cash allowance to help pay for this in-home support.

HealthCare.gov

Seniors/Retirees

• CLASS will be an alternative to nursing home placement.

• People with Disabilities regardless of age will be able to participate in CLASS.

HealthCare.gov

Medicare Part D “Donut Hole”

• Medicare Part D prescription plans have a coverage gap called the ”donut hole.” After you spend a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap end and your drug plan helps pay for covered drugs again.

HealthCare.gov

Medicare Part D “Donut Hole

• Starting January 1, 2011, if you reach the coverage gap, you will automatically get a 50% discount on covered brand name drugs.

• You get this discount at the pharmacy or through mail order, until you reach catastrophic covered phase.

HealthCare.gov

Medicare Part D “Donut Hole

• You will get a 7% discount on generic drugs while in this coverage gap.

• Expect additional savings on your covered brand-name & generic drugs while in the gap over the next 10 years until the gap is closed in 2020.

HealthCare.gov

Medicare Part D “Donut HoleRequirements

• Must be enrolled in a Medicare Prescription Drug Plan or a Medicare Advantage plan.

• This program is to help those with limited resources.

• Must reach the coverage gap

• Entire drug cost will count toward the amount you need for catastrophic coverage

HealthCare.gov

Early Retirees

• Law provides resources to employer-based retiree health plans for those people that retire before age 65.

HealthCare.gov

Military/Veterans

• New law does not effect current plans from Veteran Health Administration

• New does not effect TRICARE or TRICARE for Life benefits your family currently receives

• You will be able to purchase additional coverage if you want through the new health insurance Exchanges, which open in 2014

HealthCare.gov

Military/Veterans

• You will benefit from new consumer protections, if you have private insurance coverage

• If you are a veteran that is not eligible for VA health care or other coverage, you and your family may be eligible to receive tax credits for insurance you buy in the exchanges

www.HealthCare.gov

Uninsured

• Coverage in high-risk pool if you have a pre-existing condition

• Discrimination ban extends to all adults in 2014 after Exchanges are created & high risk pools are phased out.

www.HealthCare.gov

Privately Insured

• No discrimination against children with pre-existing conditions

• Ban on lifetime coverage limits• Ban on insurance plans dropping you if

you get sick• Free preventive care• Regulate annual limits on coverage

under new plans

www.HealthCare.gov

Privately Insured

• Regulate annual limits on coverage under new plans

• New, independent appeals process• Requirement that plans put more of

your premiums into care, less into insurance company profits

• Restrict CEO pay depending on market size

www.HealthCare.gov

Small Employers

• Small Business Tax Credits- 35% premiums in 2010 and 50% in 2014

• Employers with fewer than 50 employees are exempt from new employer responsibility policies

• In 2014, small businesses with fewer than 100 employees can shop for insurance within the Exchanges.

www.HealthCare.gov

Large Employers

• Employers with more than 50 employees is considered a large employer.

• Must provide health insurance for employees or pay a fine of $2000 per worker each year, if any worker receives federal subsidies to purchase insurance.

www.HealthCare.gov

Rural Communities

• Limited access to health services

• Travel longer distance to get health care

• Greater access to primary care providers-16,000 new providers over next 5 years

• Capping out-of-pocket expenses

HealthCare.gov

Rural Communities

• Prevention & wellness benefits for free

• More Community Health Centers will get more funding to see more patients

• National Health Service Corps will be expanded in order to provide loans & scholarships to primary care providers in rural areas

HealthCare.gov

Health Care Providers

• Investments in electronic health record adoption

• Patients will get new rights to choose their primary care professionals

• Reduce paperwork and administrative hassles

www.HealthCare.gov

Health Care Providers

• New investment in training for more primary care doctors

• Paying Physicians based on value not volume to increase quality care (2015)

• Lower the burden of uncompensated care on physicians and other health facilities

Business Pundit

Pros of Health Care Reform

• Needed because of higher costs• Provides cheaper prescriptions for seniors• Reducing costs, fraud, abuse and paying for quality

over quantity• More coverage & preventive care for all legal U.S.

residents• Insurance companies must cover everyone-No pre-

existing conditions or exclusions

Business Pundit

Cons of Health Care Reform

• Adds $940 Billion to the Federal deficit over next ten years

• Higher Medicare taxes for businesses and families earning more than $250,000

• Cuts in Medicare benefits of $500 Billion before 72 Million “Baby Boomers” become eligible for benefits

Orange County Register Newspaper

Current Challenges to Health Care Reforms

• Possible “de-funding” of the Health Care Reform bill in Congress

• Legal suits to determine constitutionality of the reform by 26 states & National Federation of Independent Business—ultimately will go to the Supreme Court

• Waivers given to unions, states and some employers

Key Takeaways

• Reform and changes are needed to reduce costs and increase access.

• Changes are varied by customer segment—elderly, families, companies, etc.

• Changes are phased in over several years (2010-2018).

• Emphasis on quality and prevention will also lead to less costs.

Questions

References and Resources

• Health Reform- www.healthreform.gov• Health Care Statistics in U.S. –

www.healthpaonline.net/health-care-statistics-in-the-united-states.htm

• Health Care- www.HealthCare.gov