1. February 11, 2009 Health Reform Issues and Overview Webinar One Hosted By Jud Sommer Senior Vice President, Government Affairs June 24, 2009

2. Overview Why reform? What reform will look like? Next steps -- United for Health Reform

3. Why Reform?

4. Uninsured The Congressional Budget Office (CBO) estimates that 45 million nonelderly people will be uninsured at a given point in 2009 Approximately 17% of the total nonelderly U.S. population 28.1% of 18 – 24 year olds were uninsured in 2007, the highest of any age bracket ¹ Almost 96 percent of firms with 50 or more employees offer health insurance as compared with 43 percent of firms that have fewer than 50 workers. ² In 2008, total government spending to reimburse uncompensated care costs incurred by medical providers was approximately $42.9 billion.³ It is estimated that under funding of public programs shifts $88 billion in health care cost to the private sector each year.4 1)U.S. Census Bureau, Health Insurance Coverage 2007 2)U.S. Department of Health and Human Services, Medical Expenditure Panel Survey-Insurance Component (2006) 3)Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds (2008); Hadley et al. (2008) 4)Milliman, Hospitals & Physicians Cost Shift, December 2008; figures reflect 2006 and 2007 data.

5. The gross domestic product (GDP), a basic measure of an economy's economic performance, is the market value of all final goods and services made within the borders of a nation in a year. Costs National Health Expenditure is estimated at nearly 18% of GDP¹ Health care spending is 4.3 times the amount spent on national defense Medicare represents a $36 trillion entitlement obligation of the U.S. government. The Medicare hospital trust fund is expected to become insolvent by 2017.² 1)Centers for Medicare and Medicaid Services, “National Health Expenditures Projections: 2008 – 2018.” 2)The Henry J. Kaiser Family Foundation 1 1

6. Cost: Medicare & Medicaid Note: Pre-Stimulus / Pre-TARP

7. Healthcare cost increases Cost: Premiums vs. Earnings & Inflation

8. Understanding Costs 300M people across America Demand $2.555T 100% Administration and net cost of private insurance $0.184T 7% Hospital Care Physicians & Clinical Drugs Dental Home Health/ Nursing Home Etc. Supply $2.371T 93% $800B $533B $264B $177B $210B Source: CBO, December 2008, based on CMS estimates

9. Quality & Efficiency Opportunity Half of health care cost growth is potentially controllable, linked to excess services and higher prices Supply-Sensitive Care: Days in the Hospital for Patients During the Last Six Months of Life Among Academic Medical Centers Source: The Lewin Group analysis of data from the Centers for Medicare and Medicaid Services, Office of the Actuary. Estimated split by excess medical inflation and utilization/ intensity is based upon data published by OACT of CMS. Source: John Wennberg, Dartmouth Medical School.

10. What will Reform Look Like?

11. Two Key Policy Domains Expanding CoveragePaying For It Eligibility for and structure for new funding Public Programs Existing New Subsidies Individual insurance market reforms Spillover to small group (rating rules, etc.) Exchange / Connector design Enforceable individual mandate Standard benefits designs Administrative costs / distribution regulations Federal / state interplay Employer ‘pay or play’ ERISA Government health plan, with variants Etc. Federal Savings MA Rate cuts – set by government or by bidding Other Medicare savings Unit price cuts via a government plan Other cost containment proposals New Federal Revenues Limiting the tax exclusion for employer- sponsored health coverage “Sin” taxes Other sources Savings in non-federal national health expenditures Administrative simplification Slow national trend by 1.5% over 10 years Etc. ~120-150 billion / year? ~$1-1.5 trillion over 10 years?

12. Initial Step – The ‘Stimulus’ Bill $25B new COBRA subsidies $87B new Medicaid resources $19B for Health IT $1.1B for Comparative Effectiveness Research $2B in Federally Qualified Community Health Centers $500M for Health Professions Workforce and National Health Service Corps $1B for Prevention and Wellness

13. Timeline- What has happened thus far February AprilMarch May June Administration Senate HELP Committee Senate Finance Committee House Tri- Committees 26 th – President’s budget proposal for $635 billion health reform reserve fund 5 th – White House Forum on Health Reform 8 th – White House Stakeholder Meeting on Health Reform 11 th – President’s meeting with stakeholders on cost containment 11 th – President’s proposal for additional $313 billion to fund reform 13 th – Meeting with stakeholders on health reform 14 th – Hearing on delivery system reform 15 th – Meeting with stakeholders on health reform 24 th – Hearing on underinsurance 26 th – Hearing on integrated care 9 th – “Affordable Health Choices Act” introduced 16 th – CBO $1 trillion cost estimate for reform bill released 28 th – Hearing on state experiences with health reform 29 th – Hearing on primary health care access reform 22 nd – Roundtable discussion 1 on delivery system reform 5 th – Roundtable discussion 2 on expanding coverage 12 th – Roundtable discussion 3 on financing of reform 17 th – Introduction of reform bill delayed to get CBO cost estimate (bill still being negotiated) 10 th to 27 th – Energy & Commerce reform hearings 1 through 4 10 th – Education & Labor hearing on strengthening employer coverage 11 th – Ways & Means reform hearing 1 2 nd – Energy & Commerce health reform hearing 5 23 rd – Education & Labor hearing on cost of employer coverage 1 st to 29 th – Ways & Means reforms hearings 2 through 4 10 th – Education & Labor hearing on single payer option 19 th – Tri-Committee releases draft health reform bill

14. Timing – From Three Plans to One New York Times – June 18, 2009

15. Next Steps

16. United for Health Reform Webinars Webinar 2 – UnitedHealth Group’s Positions and Views  June 30 th Webinar 3 – Advocacy  July 2 nd Letter writing Town Hall meetings Questions? Email – hcreform@uhc.com Additional info ACT - United for Health Reform www.UnitedforHealthReform.com LEARN - Get the Facts on Health Reform www.HealthReformFacts.com

17. Please email questions to: hcreform@uhc.com Answers will be posted at: HealthReformFacts.com hcreform@uhc.com HealthReformFacts.com Please email questions to: hcreform@uhc.com Answers will be posted at: HealthReformFacts.com hcreform@uhc.com HealthReformFacts.com Q & A