Health Care Reform 101

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Health Care Reform 101
Healthcare Reform and the Future of Healthcare
IPPFA Benefits Conference, 6/4/09
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Agenda for todays discussion

• The need for healthcare reform
• Political process and timeline for action
• What are the issues, and where does BCBSA stand
• Long-term optimal healthcare The Pathway to
  Covering America
• How you can get involved

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Healthcare reform Action likely this year
Strong commitment
Too many uninsured
Unsustainable costs

• 45.7 million Americans currently without
  coverage, including 10 million children

• U.S. spending 2.2 trillion on healthcare
  annually
• Growing frustration with high healthcare costs
• Average premiums for family coverage have more
  than doubled since 1999 

• Top priority for President and Congress

STRONG MOMENTUM FOR REFORM
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Political process and timeline for action

• President and Congress strongly committed to
  enacting healthcare reform this year.
• House and Senate committees now working on bills
• Multiple House committees
• Baucus/Grassley Senate Finance Committee
• Kennedy Senate Health, Education, Labor and
  Pensions
• House and Senate floor action expected before
  August recess
• Final bill expected to be ready for Presidents
  signature this fall

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• BCBSA strongly believes everyone should have
  health insurance

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Broad consensus on certain reform priorities
Insurance/market reforms
Delivery system reforms
Expansion of health coverage

• Simplify the process of obtaining coverage,
  especially for individuals and small employers
• Assure that everyone has coverage

• Build on the current employer-based system where
  160 million get coverage today
• Provide subsidies to make coverage affordable
• Expand existing public programs such as Medicaid

• Change payment to reward high-quality care
• Emphasize prevention and wellness
• Coordinate care for patients with chronic
  illnesses

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but less agreement on others
Individual/employer mandates
Connector or Exchange
New government plan

• Establish a government plan for
  non-Medicare/Medicaid eligibles to compete with
  private insurers

• Assure everyone has coverage by requiring
  employers to provide and/or individuals to
  purchase it

• Create a new government agency where consumers
  would purchase coverage

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BCBSA position

• BCBSA supports the vast majority of reforms being
  proposed by the President and Congress.

• Top concern
• Creation of a new government program to compete
  with private insurers
• This would decimate employer coverage, and most
  employees would end up enrolled in a government
  program.
• Other concerns
• New Connector or Exchange
• Insurance reforms in a voluntary market

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Government plan The Vision
Employers and individuals sign-up with exchange
and individuals select plan from among
government approved options
EMPLOYER
INDIVIDUAL
EE
EE
EE
EE
EE
EE
IND
IND
IND
IND
Exchange BCBS United Aetna Kaiser CIGNA
Public Plan
Government Plan
Government Subsidies
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Government plan

• Proponents urging
• Establish a government-run health insurance
  option for everyone
• Why?
• Increase competition by creating a government-run
  program to compete with private insurers such as
  Blue Cross and Blue Shield
• Reduce costs by using the governments
  bargaining power to set better prices with
  doctors and hospitals

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Government plan will cause health reform to fail

• Most people would lose their current employer
  coverage
• Over 100 million people would be shifted into
  government plan (Commonwealth Fund 2009)
• Government plan would lead to a two-tiered system
• As government plan underpays providers, private
  insurance premiums would increase. With no
  choice but to switch to government plan, people
  would face longer lines, less access.
• Policymakers should build on what works today
  the employer system that covers 160 million
  people
• Private sector drives innovation that improves
  care
• Government control would make system slower, more
  costly and less responsive to patient needs
• Government plan is unnecessary in comprehensive
  reform

Govt plan eliminates choice access to many
providers
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Federal Exchanges

• Proponents urging
• Create a new federal or regional agency where
  consumers would purchase coverage
• Why?
• Simplify purchasing
• Enhance competition
• Increase choice
• Viewed as a regulatory enabler of healthcare
  reform and gateway to government plan

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Exchange BCBSA position

• Offer alternative State Insurance Marts
• Federal Exchange would
• Increase costs by duplicating administrative
  functions (e.g., collecting premiums and
  marketing coverage)
• Have the government select coverage options
  rather than employers
• Usurp states ability to regulate insurance
• BCBSA alternative SIMs would build on
  existing structures
• Provide a state internet portal with consensus
  benefit templates, standard application, subsidy
  calculators, and links to brokers/programs
• Accomplish the same goals as an Exchange
• Provide a less costly, less complex, more
  transparent and faster alternative to a new
  federal bureaucracy

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Insurance reforms

• Proponents urging
• Require insurers to provide coverage to all
  regardless of health status (Guaranteed Issue)
• Require insurers to charge everyone the same rate
  regardless of health status (Community Rating)
• Why?
• Guaranteed Issue will ensure everyone has access
  to coverage
• Community Rating will assure fair rates

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Insurance reforms BCBSA position

• Support guarantee issue and rating reforms if
  coupled with an effective requirement that
  everyone have insurance.
• Requiring everyone to have insurance and
  providing subsidies to make it affordable will
• Allow insurance to work as it should spreading
  risk across a broad population and
• Assure a balance of healthy/young people to
  cross-subsidize the high cost of caring for
  older/sicker individuals.
• However, implementing guaranteed issue and
  community rating without everyone being covered
  will
• Result in increased premiums, more uninsured
• Allow people to wait until they are sick to buy
  coverage

Lowest-cost HMO for a 23-year-old in Buffalo,
N.Y., is 973/month
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BCBSA Approach Pathway to Covering America
The Blue System strongly supports comprehensive
reform to rein in costs, improve quality and
extend coverage to all.
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BCBSA Approach Pathway to Covering America
Future State?
Objective stds. drive delivery of the
highest-quality care
Payers incent coordination of care and optimal
outcomes
Enhanced information and tools (e.g.,
e-prescribing)
Minimized chronic illnesses, obesity, smoking
Fewer uninsured thru new subsidies, enrollment
support and products
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Why its important for you to be engaged

• A lot is at stake, including
• Choice The employer-based system, through which
  160 million Americans get their coverage, could
  be eliminated
• Cost Your private insurance premiums would
  skyrocket if insurance reforms are not done right
  
• Care Your benefits could be negotiated by a
  government agency instead of your employer
• Competition A government option could mean the
  end of true competition and all the innovation it
  brings

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How you can get involved

• Learn more about BCBSAs key positions by
  visiting www.BlueAdvocacy.org
• Access educational resources and send letters to
  Congress on www.GetHealthReformRight.org
• Write to your elected officials
• Write a letter to the editor about whats at
  stake in the healthcare reform debate

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Health Care Reform 101
Questions?
Healthcare Reform and the Future of Healthcare
Questions?
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Health Care Reform 101
Healthcare Reform and the Future of Healthcare
IPPFA Benefits Conference, 6/4/09