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!

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 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

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 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

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 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…

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 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

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 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)

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 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)

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 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

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 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

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 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…

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 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
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 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)

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 Examples of What
You’ll Pay: House Bill
as Example
If you are Income Annual Premium Limits Annual Limits on
Out of Pocket Costs (Based on
Purchasing “Basic” Plan)

Single $16,000 $480 (3% of income) 3-5% of medical costs

up to $5000

Couple $35,000 $2450 (7% of income) 15% of medical costs

up to $10,000

Family of 3 $72,000 $7,920 (11% of income) 30% of medical costs

up to $10,000

Family of 4 $90,000 No subsidy to limit premium30% of medical costs

up to $10,000

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 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

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 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

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 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!

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 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

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 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)

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 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

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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)
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 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!

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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…

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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

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 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

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 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

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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  

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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

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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

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

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