Click here for frequently asked questions:
Does Geisinger Health Plan support health-care reform?
Geisinger Health Plan supports meaningful health-care reform that makes care more available and affordable for Americans.
I have heard that health reform will cost at least $1 trillion. Is this true?
According to updated figures from the Congressional Budget Office (CBO), the health-care bill is expected to cost $1.05 trillion over the next ten years. However, if provisions of the legislation remain unchanged, CBO also estimates that the legislation would cut federal budget deficits by an estimated $143 billion over a the first decade-and more than $1 trillion over the second decade-by cutting government overspending and reining in waste, fraud and abuse.
How can we afford health-care reform?
We currently spend more than $2 trillion dollars a year on health care. Health-care reform will make a short-term investment of roughly $100 billion a year.
The majority of the cost of paying for health-care reform will come from cutting waste, fraud, and abuse within existing government health programs; cutting payments to insurance companies; and increasing efficiency with such steps as coordinating care and streamlining paperwork.
Health-care reform must also encourage the kinds of reforms we know will save money in the long run: preventive care; electronic health records; and restructuring payments to be based on outcomes.
Let's also remember that we can't afford not to reform health care. The cost of inaction is too high. One out of every six dollars in this country is spent on health care. Soon it will be one in five. If nothing is done, in 30 years, one third of this country's economic output will be tied up in the health-care system.
Why do we keep hearing premiums will increase as a result of health-care reform?
Insurance premiums are NOT the primary reason health insurance rates continue to go up. Rates go up as a result of the increasing costs of health-care services and procedures. Unfortunately, we do not believe the legislation as it stands now adequately addresses the issue of rising costs.
It is the belief of many that premiums will go up as a result of reform because the penalties for those individuals who do not buy insurance once it's mandated are too low. It will be too easy for younger, healthy people to forego health insurance (because they are willing to gamble on the fact they won't need it) and just pay the small penalty instead. On the other hand, people who are less healthy, or know they will require health-care services, will buy or stay on their health insurance. This creates an issue of "adverse selection" where rates must increase in order to cover the added cost of fewer healthy people and more sicker people.
Why should people with insurance pay to cover those who don't have it?
Americans with insurance pay a hidden tax of roughly $1,000 for the cost of treating the uninsured. As more Americans become insured, that hidden tax will begin to disappear.
The goal of reform is that covering everyone means that younger healthier people will become insured and spread the risk. There will also be additional competition from insurance companies bringing down the cost of insurance. Health-care reform will create stability and security for everyone. If you lose or change jobs you will have the peace of mind of knowing that you will always be able to find an affordable health insurance option for your family.
Why is it necessary to have a requirement for individuals to obtain health insurance coverage?
Under the health-care reforms, insurance companies are no longer allowed to deny coverage to those with preexisting conditions or charge them higher premiums because of their medical needs. If individuals wait until they were sick to get coverage, the cost of insurance for everyone would be unaffordable. Making everyone get insurance makes sure there are healthy individuals in the insurance pool.
How will this legislation affect our health-care costs?
It is possible that the reform will increase the cost of insurance. There are some additional taxes on insurance companies that do not exist at the present time. However, the legislation addresses issues such as cutting waste, fraud, and abuse; and increasing health-care efficiencies that are meant to control costs. The individual mandate will also play a role. First, it will add young healthy individuals into the mix and second it helps eliminate the cost associated with providing care for the uninsured.
I just graduated from college. I don't have a job and can't afford insurance. Will I be affected?
Dependents under age 26 will be covered under their parent's policy as long as they do not have access to employer coverage. This coverage in available when the coverage is purchased or renewed on or after September 23, 2010. Click here for Geisinger Health Plan's coverage policy.
Isn't health reform going to put more burdens on federal and state governments because we will be covering more people without insurance?
Controlling health spending is critical for the fiscal health of the federal government and the states. According to the Council of Economic Advisors, if we do nothing about health-care costs, by 2019,
- Health-care expenditures will be 21 percent of GDP-one fifth of our economic output
- Spending on Medicare and Medicaid will be 8 percent of GDP
- Nineteen percent of the non-elderly population, or 54 million Americans, will be uninsured. The cost of caring for the uninsured burdens all of us. Families with insurance pay a hidden tax of $1000 to cover the cost of uncompensated care in this country
For working Americans who rely on employer-sponsored health insurance, rising costs mean that an even greater proportion of their compensation will be in the form of health benefits rather than take-home pay. In ten years, the estimated percentage of average total worker compensation that comes in the form of health insurance will be 26 percent.
Why should I care about health-care reform if I already have insurance and like what I have?
The legislation provides a lot of protections for consumers including insurance coverage even if you lose your job, switch jobs or move. In addition, insurance companies can not cancel your coverage if you get sick or limit the amount of coverage you receive.
Will health-care reform provide coverage to illegal immigrants?
The health-care reform bill does not extend coverage to illegal aliens.
What is the insurance exchange?
The health insurance exchange is a marketplace that will offer affordable high-quality health insurance options for individuals and small businesses. It is meant to provide one-stop shopping to help the uninsured find the plan that is right for them.
How will health-care reform help small businesses?
This legislation may help bring down costs for small businesses and families. Because they lack bargaining leverage, small businesses pay on average 18 percent more than larger businesses for the same health insurance. Small businesses (employers with less than 100 employees) will have new options to purchase affordable health insurance that are not available to them now. Through new Health Insurance Exchanges, small business owners and employees can comparison shop for a plan that offers lower rates that large groups and large employers get, stable pricing from year to year and lower administrative costs. The bill also offers tax credits to small businesses with less than 25 employees to help them purchase health insurance for their employees. Small businesses can receive these tax credits beginning this year.
However, because the health-care reform legislation doesn't adequately address the issue of rising health-care costs, there will still be continuing upward pressure on premiums.
I own a business. Will I have to buy insurance for my employees?
It depends on the size of your business. Companies with fewer than 50 employees won't be penalized if they don't offer health insurance. But effective now, businesses can get tax credits if they have 25 or fewer employees and a workforce with an average wage of up to $50,000. Tax credits of 35 percent of the premium costs are available this year and will increase up to 50 percent in 2014.
In 2014, businesses with more than 50 employees that do not offer health insurance must pay a penalty if any of their employees get government-subsidized coverage through the exchange. The first 30 employees will be excluded from the assessment.
What is the small business tax credit and how do I know if I'm eligible?
Effective Jan. 1, 2010, tax credits are available to qualified small businesses that provide their employees with health insurance. To qualify, your business must:
- Cover 50 percent of the cost of health-care coverage for your employees pay
- Have an average annual wage below $50,000
- Have less than the equivalent of 25 full-time employees.
The size of the credit depends on your average wages and the number of employees you have. More information is available at IRS.gov Small Business Health Care Tax Credit.
Will I have to buy insurance through the Exchange or can I continue to use my insurance agent?
Businesses are not required to buy coverage through the small business exchange.
What is a grandfathered plan?
Grandfathered plans are group health plans or individual coverage that was in place on or before March 23, 2010. New employee and family additions are permitted without change to grandfathered status.
If my plan is grandfathered, is it exempt from the new requirements?
Grandfathered status exempts a plan from some, but not all of the new requirements. For example, grandfathered plans will still be subject to first dollar coverage for preventive care, nondiscrimination requirements for insured plans, the revised appeals process, limits on employee out of pocket expenses as well as expansion of dependent coverage to age 26.
What will cause my plan to lose grandfathered status?
It is not clear at this point. Reform allows grandfathered plans to enroll new employees or add dependents without losing grandfathered status, but it is silent on what other changes are permitted. Further guidance should clarify this point.
I have heard there is a subsidy for early retirees. What is this?
The Early Retiree Reinsurance Program is a temporary program designed to make it easier for employers to provide coverage to early retirees over age 65 but not yet eligible for Medicare. The program will end in 2014 when the health insurance exchanges are in place. Employers who are accepted into this program will receive reinsurance reimbursement up to 80% for medical claims for younger retirees, their spouses, and dependents. Eligible employers can apply for the program through Health and Human Services (HHS)
How should I prepare for health-care reform?
Employers should focus on the provisions that:
- Are effective immediately
- Become effective for plan years beginning after Sept. 23, 2010
- Interact with other legislation such as COBRA and HIPAA
- Impact other functions such as payroll and accounting
First employers should make sense of what the requirements are in the short term and focus on these new requirements. As guidance emerges, your focus can shift to longer term requirements and plan design.
What parts of the legislation are effective immediately?
Some of the early requirements include:
- Retiree medical subsidy
- Early retiree reinsurance
- Pre-existing conditions
- Grandfathered plan status
- Small business tax credit
- Plan limits
- Dependent coverage to age 26
- Wellness grants
Is it true that over a half trillion dollars is being cut out of Medicare?
The health-care reform legislation does cut about $450 billion out of the Medicare program. About $140 billion of this amount comes from reducing reimbursements to private insurance companies that offer Medicare Advantage plans. Another $200 billion comes from making changes to the way Medicare pays doctors and hospitals making the health-care delivery system more efficient. Approximately $35 billion comes from reducing payments that hospitals currently receive for providing care to uninsured patients. Since these patients will be insured under health-care reform, these payments will no longer be necessary. And finally, about $80 billion comes from other changes to the Medicare program, including rooting out waste, fraud and abuse.
How does health-care reform benefit seniors?
Health reform will benefit seniors in many ways:
- Shrinking the donut hole in Medicare Part D
- Providing financial assistance to employer health plans that cover early retirees (55 and 64)
- Strengthening preventive care under Medicare by eliminating co-payments for checkups and wellness visits
- Reducing waste and improving the efficiency of Medicare
In addition:
- Nothing in the health-care reform bill would cut Medicare benefits or increase out-of-pocket costs for Medicare services.
- Health-care reform will reduce costly, preventable hospital readmissions, saving patients undue harm and Medicare money
- Health-care reform will reduce hospital acquired infections
- According to the Department of Health and Human Services, this bill will lengthen the solvency of the Medicare program by almost a decade, protecting both beneficiaries and taxpayers.
I've heard that this bill will get rid of my Medicare Advantage plan. Is that true?
No. The health-care reform bill does not eliminate Medicare Advantage plans. It does, however, reduce reimbursements to Medicare Advantage plans.
Will Medicare change under this bill?
First, the legislation mandates 100 percent coverage of the cost of preventive care, such as regular check ups, mammograms and other preventive tests. Second, the bill ensures that millions of seniors will save money on their prescription drugs by immediately beginning to close the "donut hole" in the Medicare prescription drug benefit.
What does the bill do to fix the Medicare Prescription Drug Program donut hole?
The bill will begin closing the Medicare Part D "donut hole" immediately, and close it completely by 2020. Seniors who reach the donut hole this year will receive a $250 rebate. (The donut hole is the coverage gap in the Medicare Prescription Drug Program (Part D). Under Part D, Medicare does not contribute toward the cost of drugs when some individuals' annual drug expenses fall into a certain range.) Fixing the donut hole would mean that seniors are no longer faced with paying thousands of dollars in out-of-pocket drug costs.
Are my Medicare benefits going to decrease?
No. The health-care reform bill improves your Medicare benefits. It fills the Medicare Part D drug program "donut hole." It will make preventive care free for Medicare beneficiaries and lowers the cost of prescription drugs by allowing the government to negotiate with drug prices with pharmaceutical companies. It improves the low-income subsidy programs in Medicare so that more seniors get financial help. In addition, this bill lengthens the solvency of the Medicare program.
