Your Bottom Line

1. What Vermont’s Health Reform means for Your Bottom Line

2. Having trouble? FAQ available Use the Chat Function We’re here to help!

3. Joining us on the call Al Gobeille Member GMC Board Bram Kleppner Founder & CEO Danforth Pewter Dan Barlow Policy Director VBSR Jessica Stone Outreach Manager Small Business Majority Steve Kimbell Commissioner BISHCA VT Cassandra Gekas Health Care Advocate VPIRG

4. A Word from Your Sponsors • Run by & for small business owners • Health reform, clean energy, access to capital • Jobs, opportunity, cost savings • Statewide business trade association • Education, public influence, workplace quality • Protect natural, human, & economic environment for VT citizens • Vermont’s largest environmental & consumer advocacy organization • Environment, health care, consumer protection, democracy • Voice of Vermonters in public policy

5. Why are we here? • Forget politics, let’s talk BUSINESS • Separate FACT from fiction • Answer your QUESTIONS • Two-way COMMUNICATION with decision makers

6. Instant Poll 1

7. Piecing reform together VT Health Benefit Exchange Green Mountain Care Board Act 48 ACA

8. They Have Good Questions Will premiums be more expensive in the exchange? Reform seems so complicated. How is going to save us money? Can the government really do this better the free market? Are we moving too fast? What if this doesn’t work? Am I going to be forced to buy a plan that I don’t like?

9. Meet Bram Bram Kleppner is the CEO of Danforth Pewter in Burlington.

10. Living with Uncertainty

11. Instant Poll 2

12. The system is broken. High Cost Costs are Unsustainable. We’re already spending too much

13. The system is broken. Unfair Vermont’s small businesses are at a competitive disadvantage

14. The system is broken. Less Value You’re not getting the bang for your buck • Outcomes down, cost up • Higher deductibles, higher premiums

15. The system is broken. Unstable The smaller you are, the greater the risk

16. A $5 Billion Failure • Rising premiums are eating away at profits • Health insurance costs are hampering growth and competitiveness • Unhappy or unproductive workers stay in jobs for the benefits • The un-affordability of coverage is hampering Vermont’s entrepreneurial spirit.

17. A $5 Billion Opportunity Universal Coverage Planned Infrastructure Better Bargaining Power & Less Risk Predictable Spending Moving to Green Mountain Care Health Benefit Exchange Simplify purchasing Reduce waste & complexity Maximize federal funding Distribute risk Green Mountain Care Board Improved Public Health Pay for quality, not quantity Transparency & Accountability

18. And the status quo? “We deal with uncertainty in these [health care] costs every year. It’s an unknown and it’s entirely unsustainable. You can’t do much worse.” – Russ, North Wind Construction

19. What the #$&@ is an insurance exchange? • ACA Requirement • Virtual marketplace • Private insurance plans compete Video Time: Exchange Basics

20. Affordable Care Act • Affordable health coverage for 32mil uninsured • Preventative care with no-cost sharing • 80c of every dollar toward actual care • Reduce deficit $100b by 2020 & $1.3 trillion by 2030 Saves money. Save lives.

21. Affordable Care Act It’s complicated, because it’s a compromise • Federal framework • State-driven implementation States are planning their exchanges now! So business input is critical Feds Vermont

22. So What’s in it for Vermonters? Here’s a few to start with: • Health plans can’t drop you because you’re sick. • Pre-existing conditions • Ban of lifetime limits • Adults under 26 can stay on parents plan • First-dollar coverage for preventative care • MLR

23. What’s in it for you? $40 billion in tax credits by 2019

24. Who’s eligible • Fewer than 25 full-time employees • Average annual wages <$50,000 • At least 50% of premium cost

25. The Fine Print… • Tax credits on a sliding scale • Up to 35% of premium expenses for 2010-13 • Up to 50% of premium expenses for any two years beginning in 2014 • Tax credits do not cover premium expenses of owners or their families • Cannot be claimed by self-employed • Still available for those who filed extensions or as an amendment to 2010 taxes

26. How to file • Use Form 8941, available at www.irs.gov • Use the amount of the credit as part of the general business credit on income tax returns • Credit can be reflected in determining estimated tax payments for a year • Credit applied towards income tax, not employment tax • Tax Credit Calculator: www.smallbusinessmajority.org

27. VT Benefit ExchangeLike a broker, but cheaper • Marketplace to shop for health coverage • Purchasing pool to increase buying power and reduce admin costs • Small businesses of fewer than 100 workers eligible • Private insurance plans compete • Improve competition will increase employer choice • Exchange will negotiate with insurers on behalf of small business to ensure higher quality and lower costs • RAND Study • Will expand coverage to 85.9% of small business employees – and increase of 10.5 million workers

28. VT Benefit ExchangeLike a broker, but cheaper • Price VT Small Business • Quality Insurance Plans • Value Individual

29. All insurance plans

30. Decoupling from Employment • 2014 every American will be required to buy insurance • 2014 Employers will be subject to penalty if they don’t provide insurance There are two important exceptions • People aren’t subject to mandate if insurance is unaffordable • Employers with fewer than 50 workers are exempt Dropping coverage may be the better option

31. A Green Mountain Exchange Principles • Critical mass to reduce admin costs • Prevent adverse selection • Promote quality coverage • Preserve VT standards • Hold insurers accountable • Streamline paperwork & processing • Maximize federal dollars

32. Why is exchange a better deal?

33. Who’s in and Who’s Out • Active purchaser • Everyone under 50 • Reducing of consumer confusions because you’re not having to consider plans from two different markets • 50 to 100? The controversy continues • Brings us closer to a unified health care system • Distributes admin costs • Simplification and transparency • Gets rid of middle men (broker commissions & association fees) vbsr doesn’t want to be in insurance business – gives us more resources to do other things like workplace quality and

34. Let’s talk bronze • Bronze = underinsurance • 40% and 60% • Deductibles from $2750-$6300 for individual, $5500-$12700 for a family • Bronze = financial hardship, forgoing care, collection agencies, more sick days

35. Unanswered questions • Essential health benefits • Multi-state plans a for profit and non-profit in their exchange that sells plans in at least 30 states • Navigators Role of brokers

36. On the horizon • 100 or less, mandatory in 2016 • Large firms in 2017 • Self-sustaining – 2016 • Waivers & Green Mountain Care

37. Back to Bram… • Scenario about their business • Bring back to 4 points about benefits

38. Q&A • Use the chat window on the control panel to post your questions now and throughout the presentation. • We’ll post responses to all questions we don’t get to following the event.

39. Further reading • VBSR www.vbsr.org National HHS website www.healthcare.gov • Small Business Majority: www.smallbusinessmajority.org

40. Green Mountain Care Board • Improve access to high quality health care services • Reduce health care cost growth, • Enhance experience of patients & providers. “We are both humbled and honored to work together and with the health care community on behalf of Vermonters at this historic time for our state and this country." - Anya Rader Wallack, Ph.D., Chair

41. Green Mountain Care Board Cost Reduce rate of growth Reduce unnecessary care Manage chronic care Match infrastructure to needs Fairness Review insurance rates Fair financing for GMC Lower risk, better buying power Value Simplify & streamline Recruit high quality providers Strong benefit package Stability Improve public health Build budget & stick to it De-couple from employment

42. Green Mountain Care Board • 5 members appointed by Gov with advice & consent of senate • Oversees payment reform at all levels • Applies to all payers • Incorporates Blueprint • Overall budgeting with reasonable rate of growth • Eliminates cost-shifting • Eventually oversees benefits & system budget

43. How do we control costs • Change the way docs are paid • Improve public health • Manage most expensive patients • Reduce unnecessary care

44. Why payment reform? • Fee-for-service does not control costs and actually creates and incentive to generate greater volume of services • Board will design payment models that move away from fee-for-service and toward budgeting – providers get fair payment from all payers with a rate of growth we can afford

45. Cost = Price x Use More incentive to manage use (but greater need to monitor quality Less incentive to manage use

46. Meet Al

47. Why I’m doing this We could kick all of the insurance companies out of the state right now and it would make a bit of different. If we don’t control costs, we lose everything

48. 20 cents of every dollar we earn

49. Workers & Employees are Paying More Worker Contribution Employer Contribution $15,073 $13,770 $13,375 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2009-2011.

50. One Step at a Time • What leverage does the Green Mountain Care Board have? • Payment reform pilot projects • Hospital budgets • Enhanced health insurance rate review • Certificate of Need process • These broad regulatory powers allow the Board to oversee system wide integration and cost containment