1. Stay Well Afford Care Secure Coverage

2. Our Broken Health Care System 6.5 Million Uninsured 20% of Population Source: California Health Interview Survey, 2005

3. 84% of the Uninsured Work

4. The Hidden Tax Actual Cost of Medical Care Uninsured Cost to Insured 10% of premium Source: New America Foundation

5. Actual Cost of Medical Care Uninsured Cost to Insured 17% of premium Medi-Cal Underfunding Source: Administration Analysis of “Cost Shift Hydraulic,” Dobson The Hidden Tax

6. Hidden Tax Individuals: $455 Families: $1,186 Source: New America Foundation

7. California Health Spending in Billions Source: Centers for Medicare and Medicaid Services 1984 1994 2004

8. Rising Insurance Premiums Inflation Wage Growth Health Insurance Premiums Source: CA Employer Health Benefits Survey 2005, Dept. of Finance

9. Fixing Our Broken System  Reduce the hidden tax; lower costs  Coverage for all; support better care  Healthy California

10. Prevention / Wellness Shared Responsibility / Coverage for All Affordability Governor’s Health Care Initiative

11. Prevention / Wellness Governor’s Health Care Initiative

12. Prevention & Wellness Healthier State – Long Term Affordability Prevention & Wellness Healthier State – Long Term Affordability Offer Consumers Incentives and Rewards –Tied to preventive health practices Diabetes prevention and treatment

13. Prevention & Wellness Healthier State – Long Term Affordability Prevention & Wellness Healthier State – Long Term Affordability Reduce Medical Errors –E-prescribing of all prescriptions –Strengthen patient safety & accountability

14. Prevention & Wellness Healthier State – Long Term Affordability Prevention & Wellness Healthier State – Long Term Affordability National Leader: Prevent Obesity –Implement comprehensive strategy to reverse obesity epidemic: public awareness & outreach, improve access to nutritious foods and physical activity

15. Prevention & Wellness Healthier State – Long Term Affordability Prevention & Wellness Healthier State – Long Term Affordability Continue Tobacco Control Leadership –Increase assistance to those seeking to quit smoking

16. Prevention / Wellness Shared Responsibility / Coverage for All Governor’s Health Care Initiative

17. Shared Benefit INDIVIDUALS Access to affordable coverage Healthier CA

18. GOVERNMENT Healthy, productive & economically competitive state Shared Benefit INDIVIDUALS Access to affordable coverage Healthier CA

19. GOVERNMENT Healthy, productive & economically competitive state DOCTORS & HOSPITALS Fairly compensated Shared Benefit INDIVIDUALS Access to affordable coverage Healthier CA

20. GOVERNMENT Healthy, productive & economically competitive state DOCTORS & HOSPITALS Fairly compensated Shared Benefit HEALTH PLANS Expanded market Fair compensation INDIVIDUALS Access to affordable coverage Healthier CA

21. GOVERNMENT Healthy, productive & economically competitive state DOCTORS & HOSPITALS Fairly compensated Shared Benefit HEALTH PLANS Expanded market Fair compensation EMPLOYERS Affordable coverage Healthy, productive workforce INDIVIDUALS Access to affordable coverage Healthier CA

22. Shared Responsibility INDIVIDUALS Obtain Health Coverage

23. GOVERNMENT INDIVIDUALS  Must secure health coverage for themselves and their children  Personal responsibility for health and wellness  Contribute to paying for their coverage DOCTORS & HOSPITALS Fixing the Broken System HEALTH PLANS EMPLOYERS

24. INDIVIDUALS Obtain health coverage Shared Responsibility GOVERNMENT Promote a functional health care system Provide access to affordable coverage Fairly compensate Medi-Cal providers

25. INDIVIDUALS GOVERNMENT  Expand Healthy Families/Medi-Cal for all children in families earning under $60K  Subsidies to families between $20K-$50K provided through new purchasing pool  County responsible for access for undocumented  Expand Medi-Cal to adults in poverty  $4 billion increase in Medi-Cal reimbursement rates DOCTORS & HOSPITALS Fixing the Broken System HEALTH PLANS EMPLOYERS

26. Shared Responsibility INDIVIDUALS Obtain health coverage DOCTORS & HOSPITALS Provide affordable, quality care Share cost savings GOVERNMENT Promote functional market Provide access to affordable coverage Fairly compensate Medi-Cal providers

27. Redistribution to Providers $10 - $15 Billion $3.5 Billion New Funds to Providers Coverage Dividend from Providers

28. GOVERNMENT DOCTORS & HOSPITALS  2% fee on physician revenues – 4% on hospital revenues  Participation in patient safety initiatives  At least 85% of hospital payments spent on patient care INDIVIDUALS Fixing the Broken System HEALTH PLANS EMPLOYERS

29. Shared Responsibility HEALTH PLANS Guarantee access to affordable coverage DOCTORS & HOSPITALS Provide affordable, quality care Share cost savings INDIVIDUALS Obtain health coverage GOVERNMENT Promote functional market Provide access to affordable coverage Fairly compensate Medi-Cal providers

30. GOVERNMENT HEALTH PLANS  Guarantee coverage  Only base rates on age and geographic area in the individual market  85% of premiums dedicated to patient care  Offer “Healthy Actions” rewards and incentives within benefit packages DOCTORS & HOSPTIALS Fixing the Broken System INDIVIDUALS EMPLOYERS

31. Shared Responsibility EMPLOYERS Support employee access to affordable coverage DOCTORS & HOSPITALS Provide affordable, quality care Share cost savings GOVERNMENT Promote functional health care market Provide access to affordable coverage Fairly compensate Medi-Cal providers INDIVIDUALS Obtain health coverage HEALTH PLANS Guarantee access to affordable coverage Pass along savings

32. GOVERNMENT EMPLOYERS  Offer 125 plans to allow employees to make pre-tax contributions to coverage  Contribute to the cost of coverage – non- offering employers with 10 or more employees will contribute 4% of payroll < 10 employees = 80% of all CA employers DOCTORS & HOSPTIALS Fixing the Broken System HEALTH PLANS INDIVIDUALS

33. Universal Coverage - Adults 4.8 million uninsured 4.1 million adults 650,000 Medi-Cal 600,000 opt for employer-based coverage 1 million purchasing pool 900,000 individual unsubsidized coverage 750,000 local coverage

34. Universal Coverage - Children 4.8 million uninsured 750,000 children 220,000Medi-Cal 210,000 opt for employer-based coverage 250,000 Healthy Families 50,000 parental responsibility for coverage

35. Governor’s Health Care Initiative Prevention / Wellness Shared Responsibility / Coverage for All Affordability

36. Affordability: Short Term Reduce hidden tax Tax breaks for individuals & businesses tied to purchase of health insurance Enhance insurer & hospital efficiency by requiring 85% of premiums & hospital dollars on patient care Remove regulatory barriers Reduce regulatory red tape

37. Affordability: Short Term Remove regulatory barriers: –Barriers to low-cost delivery models (e.g. retail medical clinics) –24-Hour Coverage Pilot: Combine workers’ compensation with traditional health coverage – Cal-PERS opt-in for private sector –Prioritize hospital seismic retrofit based on “worst first”

38. Affordability: Short Term Reduce regulatory red tape that stifles health plan product innovation and increases cost

39. Affordability: Long-Term Health prevention & wellness Health IT: Paperless system w/ strong privacy protections within 10 years Medi-Cal rate increases tied to performance measures Enhance health care quality & efficiency through improved performance measurement Monitor & evaluate market function & costs and revise as necessary

40. Affordability: Long-Term Enhance health care quality & efficiency through improved performance measurement Monitor & evaluate market function & costs –Revise as necessary

41. FISCAL IMPACT Prevention $300 Tax Incentive $900 Counties $2,000 Subsidized Coverage $2,270 Medi-Cal/HFP Coverage $2,638 Medi-Cal Rate Increase $4,039 Other - $203 Employer in lieu $1,000 County Redirect $2,000 Physician/Hospitals Recapture $3,472 Federal Fund Increase $5,474 $12 Billion CostFunding in millions