Health Insurance Agents Role in Minnesota Health Care Reform for 2010 Greg Dattilo, CFP, CEBS Dave Racer, MLitt

Todays Agenda Where we are today Federal reforms Going on the offense in Minnesota (c) 2009: freemarkethealthcare.com2

We the People For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies… President Obama-2009 Inaugural (c) 2009: freemarkethealthcare.com3 Health Reform #1 Domestic Agenda Item

Health Care Reform: 2009 Why reform it? What needs reform? When does it need to happen? Who will do it? (c) 2009: freemarkethealthcare.com 4

What is this crisis? Quality of care Access to health care Uninsured Spending Cost of care (c) 2009: freemarkethealthcare.com5

Patients as consumers: Insured and uninsured Doctors & hospitals Payers Provided care Decided what to buy and from whom – Options for low-income Paid catastrophic claims: They were insurance companies Paid the first dollars for their own health care How people bought health care pre-1966 (c) 2009: freemarkethealthcare.com 48% Out of Pocket 6

Payers Providers Patients Decide coverages Managing physicians & their practice May or may not comply But they will spend, spend, spend U.S. Health Care Model 2009 How people have bought health care since-1966 (c) 2009: freemarkethealthcare.com 12% Out of Pocket 7 Subsidies for "poor"

Patients do not know the cost They do not pay the bills Health care considered a right We adopted the entitlement mentality (c) 2009: freemarkethealthcare.com8

Politicizing health care President Lynden Johnson (Democrat): 1965 President Richard Nixon (Republican): 1973 President William Clinton (Democrat): 1993 President George Bush (Republican): 2003 President Barack Obama: (Democrat): 2009 Every state legislature and governor (c) 2009: freemarkethealthcare.com9

Everyone wants to know what will happen Total federal government takeover? No federal action at all? Sending it back to the states to do real reform with or without federal mandates? What do Minnesota agents do now? (c) 2009: freemarkethealthcare.com10

The world of the health insurance agent (c) 2009: freemarkethealthcare.com Insurance Companies Health Care Providers Health Care Banking Government Popular Perception Uninsured Employers Employees Uninsurable Low-Income Individuals Seniors 11

Private insurance will spend… $879 billion in 2009 (c) 2009: freemarkethealthcare.com12 * Centers for Medicare/Medicaid 2009

Voluntary vs. Involuntary 170 Million Americans are covered under private health plans, almost all voluntarily purchased Auto liability insurance – 14.6% non- compliance Income taxes – 14.7% non-compliance Health insurance – 15.4% uninsured (c) 2009: freemarkethealthcare.com13

Coverage, by category* Medicare, aged 65 and over Medicare, under age 65 Medicaid, CHIP, Military, VHA, and other government programs 2009 CHIP Added Total Covered - Gov 34 million 7 million 58 million 4 million 103 million (c) 2009: freemarkethealthcare.com * Congressional Budget Office-12/2008 US Population- 9:00 am-9/30/09: 307,585,235 } Cost Shift $89 Billion 14

Where Congress is leading us Community rating Guarantee issue insurance Mandated coverage Government option health plan/Co-ops Health Insurance Exchange Squeezing money from Medicare & Medicare Advantage Federal Health Board (c) 2009: freemarkethealthcare.com Which of these will reduce health care cost and the uninsured? But agents must do more than just say No. 15

Going on the offense in Minnesota Agents Agenda Three primary goals 1) Reduce the current and future number of Minnesota residents who lack health insurance. 2) Protect Minnesota government from the immense fiscal burden it faces if more individuals, currently covered by private insurance, move to government health plans. 3) Stabilize todays health insurance premium, and create premium price predictability for tomorrow. (c) 2009: freemarkethealthcare.com16

Going on the offense in Minnesota Agents Agenda Enrolling low-income individuals in private health insurance plans (a) Continuous coverage, guarantee issue health plan for individuals being displaced from MinnesotaCare or other government-subsidized health plan. (b) To assist individuals who are being displaced by budget cutbacks, create a referral system so that they are able to access a licensed professional health agent for assistance. (c) Increasing affordability by making health insurance premiums tax deductible for individuals. (c) 2009: freemarkethealthcare.com17

Going on the offense in Minnesota Agents Agenda Changes to 2-50 small group definition To solve problems of predictability and pricing stabilization, and increase the number of insured among employer groups. Increase small groups, 2-50, to a larger number - group pooling as compared to experience rating, and/or other methodologies. (c) 2009: freemarkethealthcare.com18

Going on the offense in Minnesota Agents Agenda Protecting local school districts Local school board control of their health benefits Separately, or to pool their plans A single statewide bureaucracy will ultimately reduce choice and increase cost to teachers and school districts (c) 2009: freemarkethealthcare.com19

Going on the offense in Minnesota Agents Agenda Full disclosure on MinnesotaCare limits The application form for MinnesotaCare currently does not reveal the $10,000 hospital maximum Licensed enrollers should explain affordable options from the private insurance market that offer comparable or greater benefits (c) 2009: freemarkethealthcare.com20

Going on the offense in Minnesota Agents Agenda Portability - Immediate conversion About 50 percent of uninsured are between jobs Allow immediate access to lower cost insurance plans as an alternative to an unaffordable COBRA/Minnesota Continuation plan (c) 2009: freemarkethealthcare.com21

Going on the offense in Minnesota Agents Agenda Create carrier choice for MCHA Guarantee a right to choose a health plan without risk of being denied coverage through MCHA Improved system for individuals as a reinsurance mechanism – allowing individuals to purchase a MCHA benefit set directly from the health plan of their choice (c) 2009: freemarkethealthcare.com22

Going on the offense in Minnesota Agents Agenda Create fairness in MCHA funding Fully-insured Minnesotans pay 100 percent of the MCHA assessment ERISA laws preclude large employers from paying their fair share of MCHA assessments Fund MCHA with revenue from the Minnesota Health Care Access Fund (c) 2009: freemarkethealthcare.com23

Going on the offense in Minnesota Agents Agenda Encourage the use of HSAs and HDHPs Necessary for consumerism to flourish We support a program to offer HDHPs with HSAs for government employees at the state, county, and local levels, as well as public education system employees (c) 2009: freemarkethealthcare.com24

Going on the offense in Minnesota Agents Agenda How to win for Minnesotans Agents must be united, speaking with one voice and show strong resolve to move good legislation ahead in 2010 State legislators need to take the lead There is much to be done – Lets do it (c) 2009: freemarkethealthcare.com25

Be involved (c) 2009: freemarkethealthcare.com26 For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies… President Obama 2009 Inaugural

Be Involved (c) 2009: freemarkethealthcare.com27 Four branches of government Legislative Executive Judicial We the people

Health Insurance Agents Role in Minnesota Health Care Reform for 2010 Greg Dattilo, CFP, CEBS Dave Racer, MLitt