The Real Facts About Healthcare Reform and Our Community

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

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!

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

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

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…

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

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)

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)

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

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

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…

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

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)

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

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

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

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!

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

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)

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

If You Are An Immigrant
We think it’s the right thing for Congress to help 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)

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!

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…

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

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

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 choice of 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

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

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

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

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

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

The Real Facts About Healthcare Reform and Our Community

by Citizen Action of NY on Sep 02, 2009

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