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  • 1. Guide to Health Care Reform Public Insurance Reform Option By Rep. Jim Cooper, July 8, 2009
  • 2. Good Medicine Informed, cost-conscious individual choice
  • 3. Get the same health care as your Congressman Annual, menu-based shopping
  • 4. Agreement on the “dog” • Near-community rating • Guaranteed issue and renewability • Large risk pools • Modernize employer-based insurance • Shared responsibility for coverage • Everyone gets more health insurance choices • Purchase of private insurance should not be included in federal budget
  • 5. Reform is really all about coverage…
  • 6. We are familiar with Individual and Group Coverage… Self-employed Company employees
  • 7. Individual coverage doesn’t work well
  • 8. Small group coverage isn’t much better…
  • 9. Why not offer large-group coverage by state or region?
  • 10. Everyone is invited to the party and they wait on you, hand and foot
  • 11. to serve your needs, unlike their old attitudes.
  • 12. Three figments of your imagination: Tooth Fairy Easter Bunny Boss Claus
  • 13. There is no such thing as employer-paid health insurance Only employer-sponsored. The boss picks, but employees pay… …by means of foregone pay raises.
  • 14. The employer system was caused by a historical accident in 1942 Side-effect of WWII wage & price controls; never clearly ratified by Congress
  • 15. Uncle Sam tried to keep lid on… … but employers outbid each other to get good workers. They offered “free” health and life insurance and other benefits.
  • 16. Median cash wages have flat-lined for decades 1977-2008
  • 17. … Sucked up by employer-sponsored fringe benefits, mainly by health care
  • 18. Lost pay raises are to health care like oxygen to a jet engine 2009 pay raise 2009 insurance 2010 pay raise 2010 insurance 2011 pay raise 2011 benefits
  • 19. We must slow down health care spending by at least 1%! $4.5 4.32 4.04 $4.0 3.79 3.98 Current 3.54 3.76 Trends Trillion of Dollars $3.5 3.3 3.55 3.09 3.35 $3.0 2.89 3.15 2.7 2.97 Trends under a reformed system 2.8 2.5 $2.5 2.64 2.33 2.46 2.32 HAA creates ten-year savings = $1.48 Trillion (4.5%) $2.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Year Lewin Group, Cost and Coverage Estimates for the “Healthy Americans Act,” Dec. 12, 2006
  • 20. Portability: a good set of luggage You know you can take your insurance coverage with you
  • 21. Paying for reform • Decision: New taxes or savings from system? – Wasting $700 billion annually, so don’t need taxes – New taxes would add fuel to fire • Target: $250 billion health insurance tax break – Unlimited exclusion for employees – Benefits highest-paid workers at largest firms – By far the biggest pool of savings for reform
  • 22. How to “Cap” the Tax Break • Slow the growth of the tax break for workers – Soft cap at level above today’s health benefits • $15,000 or 90th percentile benefits? • Grandfather union health benefits? High-cost regions? • Workers understand total cost of benefits; start to shop – Grow cap with inflation, but not inflation plus • CPI not medical cost index • 1% reduction in growth solves 2/3 of entitlement issues – No fixed cap or freeze; raises $410 billion over 10 • No one is “cut” – ratchets down growth rates
  • 23. Why not convert boss’ benefits to cash? Like Healthy Americans Act does?
  • 24. Some Transition Issues • Size of exchanges – Surely “multiple competing exchanges” is a non-starter – Micro-businesses of 2-10 employees too small • Exchanges lack bargaining power, scale • Would help with primary care physician shortage – Ideally firms with 1,000 or fewer employees join • Exchanges large enough, but threatens existing coverage? – Compromise at 200? • Expand employee choices – Most workers today get only 1 or 2 choices – Minimum 3 options?
  • 25. 1st Senate Bill • Subsidizes up to 400% of poverty • Income of $88,000 for family of four • New disability entitlement program • Expensive employer mandate • HELP!
  • 26. Senate Finance Proposal • Leaves insurance agents, companies, and commissioners in place • 7.5x premium variation allowed • 100% federal Medicaid thru 2016 for new populations • Eliminates wait for Medicare disability – Buy-in at 55
  • 27. Omiting Medicaid reform? • 2nd Class medical care? – Low reimbursement – 2/3 doctors shun patients – Wide variation between states – Dominating most state budgets • Long-term care, end-of life issues ignored
  • 28. House Tri-Committee bill -Partial bill – -no discussion of Pay-Fors or scoring by Congressional Budget Office -National exchange – how to implement in different regions? -Subsidize up to 400% FPL -Weak on delivery system reforms
  • 29. Healthy Americans Act • Covers everyone • Bipartisan • No new taxes • Scored by CBO • Fits Obama’s 8 principles The perfect breed?
  • 30. Other bills to come…?
  • 31. Obama’s Choice Matters Most
  • 32. Big issue is the tail: public option • Tail must fit dog • Must not wag dog
  • 33. Some tails look ridiculous
  • 34. Who wants unfair competition? Single-payer advocates
  • 35. Schumer Option Fair competition between dogs
  • 36. Conrad’s Co-op Option
  • 37. Is the HAA radical? No, it’s bipartisan. The bill has 13 Senate co-sponsors: 8 Democrats and 5 Republicans.
  • 38. No matter how great the plan, cleanup needed afterwards