The Real Facts About Health Care 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

2. Myths About Health Care Reform • What have you heard? • Some things we’ve heard: • Your health care will be rationed • Reform will create a big government bureaucracy • Reform will lead us down a path towards “government-encouraged euthanasia” • More on these myths later, but these 3 claims are all untrue!

3. What We’ll Discuss 1. 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 2. Debunking the myths: What the right-wing opponents of reform are saying and the truth

4. A Picture of the State of Health Care in NYS • Health care premiums going way up – 7 times greater than earnings • premiums up 81% from 2000 to 2007 • premium increase of $7,000 to almost $13,000 for family coverage during this period • 2.6 million lack insurance (as of 2007) • Over 45,000 personal bankruptcies in NYS – many due to medical bills (as of 2008) • nationally, 3 of 5 bankruptcies are related to medical bills

5. Overview of Health Care Reform and Congress There are two major bills: • Senate HELP Committee: Affordable Health Choices Act • Senate Finance Committee has issued policy papers, but no bill • House “Tri-Committee:” H.B. 3200 (America’s Affordable Health Choices Act of 2009) Next: What these proposals have in common, and a few differences…

6. Overview of the Bills • All individuals must obtain coverage • “Exchanges” will be set up through which individuals and smaller employers can purchase health coverage: • like “shopping malls” where you can buy the health care you need • a means for small businesses and individuals, who pay the highest costs, to pool their resources to get cheaper health insurance • all plans subject to same standards • subsidies provided for individuals/families up to 400% of FPL (about $88,000/year) to buy insurance

7. Overview of the Bills (continued) • “Exchanges” offer a choice of public and private plans • Problem: exchanges and therefore the public plan won’t start going into effect until 2013 (under House bill) • Employers must offer coverage or pay a fee towards providing coverage (“pay-or-play”) • Medicaid expanded: to 150% FPL (Senate) or 133% FPL (House)

8. Individual Mandate • All individuals must obtain coverage with penalties if you don’t: • maximum tax penalty of $750 in Senate plan • under House plan penalty is based on your income, which is capped at the cost of the average premium • Exemptions from mandate: • where affordable coverage isn’t available (Senate) or • financial hardship (House)

9. Health Insurance for Employees: House Bill • Most employers must “pay” or “play”. They must either: • contribute 72.5% of premium costs for single coverage (65% family coverage) for their employees or • pay 2% to 8% of payroll into the exchange to ensure employees get coverage (depends on payroll size) • Keep in mind: small businesses with workers that don’t have high average wages will get help in the form of a tax credit to pay for their employees’ health insurance • Exemptions from “pay or play:” • annual payroll less than 500,000 • employers negatively affected by job losses as a result of the pay or play requirement • Less than 4% of small businesses are subject to the penalty for not obtaining coverage for their employees

10. Health Insurance for Employees: Senate Bill • Most employers must “play” or “pay”. They must either: • contribute 60% of premium costs or • pay $750 for each employee not offered coverage • Exemptions: • employers with 25 or fewer employees

11. Tax Credits for Small Businesses • Smaller employers (less than 50 employees, Senate; 25 employees, House) with smaller average payrolls will be eligible for a tax credit to help them cover health insurance costs for their employees • House credit: up to 50% of insurance premiums • 471,300 small businesses in New York State would quality for the House credit • If you work for a company that doesn’t provide insurance under the law, you can always go the health insurance “exchange” (shopping center) to purchase insurance on your own. That’s next…

12. Subsidies for Individuals to Buy Coverage: House & Senate Plans • Individuals, families up to 400% of the FPL (about $88,000 a year for a family of four) get subsidies, on a sliding scale that caps how much you have to pay for premiums based on your income • Examples of the premium subsidy in the House bill: • family of 4 annual income of $29,000-$33,000: your premium limited to 1.5% - 3% of income • family of 4 annual income of $44,000-$55,000: your premium limited to 5.5% – 8% of income • family of 4 annual income of $88,000: your premium limited to 12% of income • Senate premium subsidy: • family of 4 annual income of less than $33,000: your premium limited to 1% of income • family of 4 annual income of less of $88,000: your premium limited to 12.5% of income *All income levels have been rounded off to the nearest $1000

13. Subsidies (cont.): Limits on “Out-of-Pocket” Expenses • House and Senate both also limit how much individuals and families will have to pay each year “out-of-pocket” • Examples: deductibles, drug costs • Intent of the limits: to avoid bankruptcy or other financial disasters due to medical bills • These limits on “out-of-pocket” costs, called “cost-sharing” limits, are generally based on your income (see next slide)

14. Examples of What You’ll Pay: House Bill as Example

15. Choice of a Public Plan Through the Exchange • Exchanges, once established, will offer a public plan which meets the same requirements as private plans concerning benefit levels, provider networks, consumer protections, costs, etc. • Theory: to compete with the private plans and keep costs down • Who Can Enroll in Exchange and Public Plan: • House bill: Eligibility for exchanges, and therefore public plans generally limited to those not covered by existing private insurance, employer-coverage, Medicare or Medicaid • Senate bill: Eligibility for exchanges, and therefore public plans generally limited to those not eligible for employer-sponsored coverage, and those who have Medicare or Medicaid

16. Choice of a Public Plan Through the Exchange (cont.) • Problems: There are problems with the current public plan provisions in addition to the limitations on enrollment in the previous slide. For example, under House bill: • you can’t enroll in an exchange and therefore a public plan until at least 2013 • the number of employers that can participate is very limited: • In 2013, only employers with 10 or fewer employees can participate • In 2014, only employers with 20 or fewer employees can participate • Beginning in 2015, federal agency administering public option may, but isn’t required to, expand to larger employers • Generally, if you have coverage through your employer, you can’t enroll. People with employer coverage, however, can get assistance with the employee share of the premiums if they are too high (at least under the House bill) • Despite the problems, we must fight to: • stop the attacks on the public plans by the opponents of reform • keep the public option provisions as strong as possible

17. Next Section – Impact on Certain Groups • We’ve already dealt with certain major groups of consumers, for example, individuals insured through their employer • Now, we’ll cover: • uninsured or people without employer insurance • people who already have employer-provided insurance • people with Medicare • immigrants • our community as a whole!

18. If You Need to Purchase Insurance on Your Own or are Uninsured • If who purchase insurance on your own (“direct-pay”) rather than through a group, you pay the most of everyone • And everyone’s insurance is going up and up: 81% from 2000 to 2007 in NYS • The bill expands eligibility for Medicaid – so if you previously made too much to qualify, you might under the new law • If you still make too much for Medicaid, the House and Senate plans subsidize health insurance for individuals purchasing through the health insurance “shopping mall” • Bottom line: you can get insurance, and if you already have it, your health insurance costs should go down significantly • You don’t need to worry anymore about being denied coverage for a pre-existing condition

19. If You Already Have Insurance Through Your Employer • You will be able to keep the plan your employer provides. (In fact, you’re generally not eligible to enroll in the exchange.) • However, you will enormously benefit from the reform legislation in Congress: • new rules like banning pre-existing coverage limitations and rescissions will protect you too • the competition from other plans in the exchange, including the public plan, will keep your premiums down • people with employer coverage can get assistance with the employee share of the premiums if they are too high (at least under the House bill)

20. If You Have Medicare • You will continue to be covered by Medicare and the program is being improved • Under the House bill: • 215,200 seniors in New York State who have hit the “donut hole” will save 50% on their drug costs in the short term • and the donut hole will be closed over a number of years • co-payments and deductibles will be eliminated for preventative services • Greater focus on prevention and management of chronic diseases will lower program costs, protecting the program long-term

21. If You Are An Immigrant • We think it’s the right thing for Congress tohelp all people -- including undocumented immigrants -- connect with quality, affordable health care and ask them to pay their fair share • Immigrants pay taxes; it’s not fair to exclude them from purchasing insurance through exchanges or Medicaid • The current health care reform bills: • explicitly prohibit federal dollars from being used for health insurance for undocumented workers, including for subsidizing health insurance through the exchanges (bad provision) • keep the current five-year waiting period for Medicaid for lawfully residing immigrant adults (also bad provision) • apparently allow undocumented immigrants to purchase insurance through the exchanges, but without the subsidy others will get (mixed provision) • allow subsidies to purchase insurance for lawfully residing (documented) immigrants (good provision)

22. Impact on Our Entire Community Impact in New York State of the House bill: • hospitals and health care providers in New York State receive billions in aid to care for the uninsured (“uncompensated care”) • 1.7 million uninsured in the state covered Health care for all will significantly help both our residents and our economy!

23. Debunking the Myths Right-wing politicians and well-funded lobbyists and “Astroturf” activists are spreading myth after myth about reform.  Let’s review a few ones we haven’t discussed yet…

24. Myth: Your Health Care Will Be Rationed • This claim is seriously misleading. • The current bills expand the number of people covered and the benefits people will receive • Under current system, care is “rationed” every day by private insurers through: • pre-existing conditions and rescissions • unaffordable policies and unaffordable care • arbitrary decisions by insurance companies • These practices would be ended or limited

25. Myth: Public Plan Will Result in a Big Government Bureaucracy • Again, this claim is seriously misleading. • Do you like the current system in which private insurance company bureaucrats stand between you and your doctor? • Under current system, insurance company “bureaucrats:” • deny coverage despite what your doctor says • search people’s private health records to charge high premiums • enforce pre-existing coverage limits • Study after study: government programs like Medicare are more efficient • Government’s role will be to set standards, not make individual decisions on coverage. Government is more accountable than profit-maximizing insurance companies

26. Myth: Next step is Canadian-Style “Single-Payer” System • Not true. • While many of us feel single-payer is highly desirable, the reality is that single-payer is not being considered seriously by Congress • There will an American solution to health care – a mixture of public and private providers • Congress is considering a choiceof a public plan and a private plan. No one will be forced into the public plan • If private insurance companies provide competitive services, there’s no reason to fear a government plan will put them out of business

27. Myth: “Government-Encouraged” Euthanasia • Not true. • FactCheck.org: The claim the House bill “may start us down a treacherous path toward government-encouraged euthanasia” is “nonsense.” Neither is there any basis to the claim that Congress is setting up “death panels” to decide which patients to euthanize! • The bill permits medical professionals who perform counseling on issues like living wills at the patient’s request to be reimbursed, as with other medical services Source of myth: Republican House Leader John Boehner & others  

28. Myth: Small Businesses Will Be Hurt By Reform • Not true: nearly all will be helped. • Under the present system, small businesses are being hurt by: • increased costs for health care every year • high administrative costs making small business coverage unaffordable • The bills will address these threats to small business • Once again: • health insurance “shopping centers” (the exchanges) will help keep small business costs down because exchanges will enable them to pool resources and get better rates • small businesses will have significant subsidies to help them pay for insurance for their employees • less than 4% of small businesses (House bill) are subject to the penalty for not obtaining coverage for their employees

29. Other Myths • These other claims are also not true: • Private plans will be outlawed • Health reform will pay for abortions (not that there’s anything wrong with that!) • Reform will give government access to everyone’s bank accounts • Opponents will keep engaging in distortions and outright lying. Solution: consult these good sources for truthful information: • Congressional committees • Kaiser Family Foundation • Media Matters • Health Care for America Now

30. Summing Up • Health care for all will have a positive impact on our community • The facts show that reform will help: • people who currently have insurance and those without • people who purchase insurance on their own • seniors • small business owners • hospitals and health care providers • our community as a whole! • We need to ignore the scare tactics of insurance companies, corporations and lobbyists with a vested interest in opposing change

31. Selected Major Sources • House Committee on Ways and Means • Kaiser Family Foundation • Center for Policy Analysis • Health Care for America Now