Slide title

health reform works

I  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Contents

1 Part I. The Problem: Our health care system was in crisis

11 Part II. The Solution: How the health reform law fixes the problem

21 Part III. What the new health reform law means for you

27 Part IV. Setting the record straight

32 Part V. Summary

II  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
 Part I. The Problem
Our health care system is in crisis

1
Premiums for employer-sponsored coverage more than doubled
in the last decade
• A single person’s premiums Average annual premiums for individuals and families, 1999-2009
increased by 120 percent
$2,196
from $2,196 in 1999 to 1999 $5,791
$4,824 in 2009. $2,471*
2000 $6,438*
• Family premiums increased $2,689*
2001
by 130 percent from $5,791 $7,061*
$3,083*
in 1999 to $13,375 in 2009. 2002 $8,003*
$3,383*
2003 $9,068*
$3,695*
2004 $9,950*
$4,024*
2005 $10,880*
$4,242*
2006 $11,480*
$4,479*
2007 $12,106*
$4,704*
2008 $12,680*
$4,824
2009 $13,375*

Source: Kaiser/HRET Survey of Employer-Sponspored Health Benefits, 1999-2009.

2  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Premiums for employer coverage are expected to double again
by 2019
If we did nothing… Projected family health insurance premiums for employer-
Family premiums are sponsored coverage assuming average growth rates from
1999-2009 and 2004-2009
projected to increase
another 130 percent in the $35,000

next decade to as much as 1999-2009 (8.7%)

$30,803

$30,000 a year by 2019. $30,000 2004-2009 (6.1%)

$24,180
$25,000

$20,297
$20,000

$17,983
$15,000

$13,375
$10,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Source: Kaiser Family Foundations projections based on data from Kaiser/HRET Survey of Employer-Sponsored
Health Benefits, 1999-2009.

3  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Small business health care costs are expected to double by 2018

If we did nothing… Cost of health benefits to small businesses per year with
Health care costs to small no reform, 2009-2018
businesses are expected to $350
more than double from $156 $339
billion in 2009 to $339 billion
$300

Annual spending, billions

in 2018.

$250

$241

$200

$156
$150
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Jonathan Gruber, Small Business Majority, “The Economic Impact of Healthcare Reform on Small
Business” (2009).

4  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Higher health costs mean fewer jobs

If we did nothing… Small business job loss per year due to health costs without
reform, 2010-2018
Small businesses were
expected to cut 178,000 jobs 200
178,000
by 2018 because of higher
health care costs.
150

Jobs lost, thousands

100
103,000

50

39,000

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Jonathan Gruber, Small Business Majority, “The Economic Impact of Healthcare Reform on Small
Business” (2009).

5  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Percent of employers—especially small businesses—offering
health coverage to workers declined
A smaller percentage of Percent of employers offering health coverage to workers declined from
2000-2008
firms offered health care
Fewer than 10 10-24 25-99 100-999 1,000+
benefits to workers in 2008 All
employees employees employees employees employees
than in 2000. All firms

2000 59.3% 39.6% 69.3% 84.5% 95.0% 99.2%

2008 56.4% 35.6% 66.1% 81.3% 95.4% 98.9%
% change -4.9% -10.1% -4.6% -3.8% 0.4% -0.3%
Source: Linda Blumberg and Stacy McMorrow, “What Would Health Care Reform Mean for Small Employers and Their Workers?”
(Washington: Urban Institute, 2009)

6  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Lower percent of employer coverage was expected by 2020

If we did nothing… Premium costs and percent of nonelderly workers offered coverage

An even smaller percentage 2010 baseline 2020 best case 2020 worst case
Percent of workers offered insurance by their employer
of workers would be offered
Small firms (1-49) 41.4% 33.4% 22.7%
health coverage through
Medium firms (50-999) 90.0% 84.7% 74.8%
their employer by 2020.
Large firms (1000+) 99.1% 99.1% 97.9%
Source: Urban institute analysis, Health Insurance Policy Simulation Model (2010).

7  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
More people were uninsured in the last decade

The number of uninsured Uninsurance in the United States, 1999-2008

Americans increased to more 50
than 46 million by 2008 from

Millions of uninsured Americans

48
less than 39 million in 1999. 46
46.34
43.40
44
42
40 38.77
38
36
34
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: Census Current Population Survey, “Income, Poverty, and Health Insurance in the United States: 2008” (2009).

8  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Number of uninsured was expected to increase by 2020

If we did nothing… Projected population uninsured under status quo

The number of uninsured 70

Millions of uninsured Americans

Worst case
67.6
was projected to increase Intermediate case
Best case 59.7 62.5
to as many as 67.6 million 60
57.9
in 2020 from 49.4 million in 57.5

2010. 50 54.0
49.4

40
2010 2015 2020

Source: The Urban Institute.

9  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
More uninsured = higher costs for you

Roughly $1,100 of your

annual premiums in
2009 went to pay for
uncompensated care for the
uninsured.

10  Center for American Progress  |  Health Reform Works |  Part I. The problem: Our health care system was in crisis
Part II. The Solution
How the health reform law fixes the
problem in our health care system

11
 At a glance: The benefits of health reform

America with reform and America without reform

DENIAL NATIONAL EXTENDED SOLVENCY

COVERAGE EQUITY
OF CARE DEFICIT OF MEDICARE

Older No denials Deficit Medicare solvency

Americans because reduced by extended to 2029
charged of pre-existing $143
WITH REFORM

3x as much conditions BILLION

as younger 2017 2018 2019 2020 2021 2022 2023
people.
Women
23 MILLION charged in first 10 2024 2025 2026 2027 2028 2029
UNINSURED the same years under
as men. reform.

Older Deficit Medicare trust fund to

Americans continues go bankrupt by 2017
WITHOUT REFORM

charged to RISE
11x as much
as younger 2010 2011 2012 2013 2014
people.
Women
54 MILLION charged up
2015 2016 2017
UNINSURED to 48% more
than men

12  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform empowers consumers

Families and individuals who get health

coverage outside their jobs are currently
Power forced to pay higher prices since they do not
l
aloneess have the purchasing power of a large group.

asing
Purch er in
pow ers!
numb

The new law creates state-based exchanges

to enable families, individuals, and small
businesses to join together in bigger risk
pools to purchase private health coverage at
affordable prices.

13  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform closes the prescription drug donut hole for seniors

The new law immediately

provides $250 for seniors in the
“donut hole”—the current gap
in Medicare Part D prescription
drug coverage that leaves
many senior citizens to pay
for their prescriptions on
their own. And it completely
eliminates the hole by 2020. The
“donut hole”

14  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform provides consumers with choices

Private insurance companies

in the new marketplace will
compete for business based
on cost and quality and will
be held to the same standards
as insurance offered through
employers.

15  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform cracks down on insurance company abuses

By 2014, insurance companies

will no longer be able to:
• Deny coverage based on a pre-existing
condition
• Charge you more based on your gender
• Drop your coverage when you get sick
• Put a lifetime cap on your coverage
• Hide in the fine print to confuse and
deceive consumers

16  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform provides tax credits to make insurance more affordable

The new health care reform

law provides tax credits to
help individuals and families
purchase coverage.
A family of four earning
$50,000 in the individual
market would receive
roughly $5,800 tax credit
to help pay for health care.
A family of four in the
individual market earning
$35,000 would receive
$11,500 in subsidies.
See how much you can
save under the new law:
http://healthreform.kff.org/
SubsidyCalculator.aspx

17  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform provides tax credits to small businesses

The new law provides small businesses with

tax credits to help purchase health care for
workers.
Businesses with fewer than 10 employees
and average annual wages of $25,000 will
benefit the most.
The tax credit phases out as the number of
employees and wages increase.
Find out if you qualify for tax credits:
http://www.americanprogress.org/
issues/2010/04/small_business_health_
calculator.html

18  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform focuses on prevention

The health care reform law:

• Puts an emphasis on treating problems early
rather than after the fact
• Creates a $15 billion fund for programs that
emphasize healthy lifestyles
• Eliminates co-payments on preventive services

19  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
Health reform makes the system more efficient

Changes to the health care

system will:
• Pay for quality and not just quantity
• Eliminate waste, fraud, and abuse, as well
as subsidies for health insurance and
pharmaceutical companies
• Better coordinate care to eliminate
unnecessary hospitalizations and
duplicate tests
• Better utilize electronic medical records
to improve quality care

20  Center for American Progress  |  Health Reform Works |  Part II. The solution: How the health reform bill fixes the problem
 Part III. What the
new health reform
law means for you

21
Lower premiums = more affordable care

Under the new law, Estimated annual premiums for private

premium growth is expected health coverage before and after reform
to slow for those with private
9.2%
coverage. $21,458
or roughly
$19,490 $2,000

2019 2019
baseline after reform

Source: "The Impact of Health Reform on Health System Spending,"

The Commonwealth Fund and the Center for Ameircan Progress, May 2010.

22  Center for American Progress  |  Health Reform Works |  Part III. What the new health reform bill means for you
How health reform helps seniors

The new law benefits seniors by:

• Eliminating the Medicare prescription
drug donut hole. The new law provides
$250 credit in 2010 to close the gap in
prescription drug coverage that some seniors
experience under Medicare and eliminates
the donut hole completely by 2020.
• No longer requiring co-pays or
deductibles for preventive care. Seniors
will not have co-pays or deductibles when
getting preventive care.

23  Center for American Progress  |  Health Reform Works |  Part III. What the new health reform bill means for you
How health reform helps young adults

Health reform helps young adults by:

• Allowing them to stay on their parents’
coverage longer. The new law allows young
adults to stay covered on their parents’ plan up
to age 26. That means young adults can still be
covered while looking for a job after graduating
from college.
• Providing access to an affordable market
to purchase coverage. Young adults can
take advantage of the new exchanges to find
affordable coverage if their employers do not
offer health benefits.

24  Center for American Progress  |  Health Reform Works |  Part III. What the new health reform bill means for you
How health reform helps small businesses

Health reform small businesses by:

• Providing tax credits to make health
coverage more affordable. The new law
provides tax credits to small businesses to
make health coverage for their employees
more affordable.
• Allowing access to insurance exchanges.
The new health reform law allows small
businesses to participate in the new
exchanges, giving them better purchasing
power to get more affordable coverage.

25  Center for American Progress  |  Health Reform Works |  Part III. What the new health reform bill means for you
Small businesses save money

Under health reform:

• A dry cleaner with five employees who
earn average wages of $15,000 a year will
receive credits to cover 50 percent of their
health insurance expenses in 2014.
• A book store owner with 10 employees
who earn average wages of $25,000 a year
will receive credits to cover 50 percent of
their health insurance expenses in 2014.
• A grocery store owner with 15 employees
who earn average wages of $20,000 a year
will receive credits to cover 30 percent of
their health insurance expenses in 2014.

26  Center for American Progress  |  Health Reform Works |  Part III. What the new health reform bill means for you
 Part IV. Setting the
record straight

27
Health reform cuts the deficit

• Health reform is fully paid for.

• Unlike the Bush tax cuts and the Medicare prescription drug benefit, the health reform law cuts the deficit.
• Health care reform will cut the deficit by $143 billion in the first decade after it is enacted and $1.2 trillion
by the end of the second decade.

Effect on deficit over ten years Health reform cuts the deficit more
in the second decade
+$2T
2010 − 2019 2019 − 2029

-$143B

Health +$381B
reform
-$143B
2003 Bush tax
Medicare cuts
Source: Congressional Budget Office -$1.2T

Source: Congressional Budget Office

28  Center for American Progress  |  Health Reform Works |  Part IV. Setting the record straight
The private employer-based health care system remains intact

• Before reform, 56 percent Americans estimated to have

of the nonelderly employer-sponsored health
population got their health coverage in 2010 and 2019
coverage through their
159M
employer. 150M
(56%)
(56%)
• After reform, 56 percent of
an even larger nonelderly
population is projected to
get their health coverage
from their employer in 2010 2019
2019. Source: Congressional Budget Office

29  Center for American Progress  |  Health Reform Works |  Part IV. Setting the record straight
Health reform is a job creator, not a job killer

The new health reform law is Health care reform results in job creation
projected to create as many We estimate that reform will create between 250,000 and
as 400,000 jobs annually by 400,000 jobs annually on average over the next decade.
2019.
1,000
More rapid change,
800 400,000 jobs on average

Thousands of jobs
Less rapid change,
600 250,000 jobs on average

400

200

17
18
19
09
10
11
12
13
14
15
16

20
20
20
20
20
20
20
20
20
20
20
-200

Source: New Jobs Through Better Health Care Health Care Reform Could
Boost Employment by 250,000 to 400,000 a Year this Decade” David Cutler
Center for American Progress Neeraj Sood Leonard D. Schaeffer Center for
Health Policy and Economics January 2010.

30  Center for American Progress  |  Health Reform Works |  Part IV. Setting the record straight
Health reform slows premium growth

Estimated annual premiums for private

health coverage before and after reform

9.2%
$21,458
or roughly
$19,490 $2,000

2019 2019
baseline after reform

Source: "The Impact of Health Reform on Health System Spending,"

The Commonwealth Fund and the Center for Ameircan Progress, May 2010.

31  Center for American Progress  |  Health Reform Works |  Part IV. Setting the record straight
 Part V. Summary
Affordability: Health care reform
makes care more affordable for
you and your family.

Access: Health care reform

provides access to coverage for
every American.

Accountability: Health care

reform holds insurance
companies accountable.

32