A Legislative Update:Implications of

Healthcare Reform

Reid Rasmussen & Guest Contributors

Agenda

• The New Issue: Cooperatives• The Kennedy Factor• The Future of Healthcare • The Legislative Process: A Reminder & What We’ll See• Resources For Staying Engaged

Cooperatives

• “If not a Public Plan, then let’s build Cooperatives”• Version 1: Senator Kent Conrad’s Description• Version 2: House Bill Language• Version 3: Real-World Examples• The Growing Discussion

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Cooperatives: Senator Kent Conrad’s Description

• Cooperative Plan– An insurance option sold within

Exchange(s)– Democratically controlled by members;

governed by an elected Board.– Surpluses retuned to members or

reinvested – Non-profit

• Funding– Initial seed $: Government & Others– Then self-sustaining

• Considerations?– Individuals? Groups?– State Law – Conversion of existing Insurance Plan?

Elected Board

$??

Exchange $

$6B

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Cooperatives: House Bill Language

• Cooperative Plan– Not for profit, member-run– Sold through Exchange(s)– Once established, Co-op is at risk– Can be regional; state has acceptance

authority• Funding

– $5 Billion, for 36 mo. disbursement– Gov’t: Gift $ for Reserves– Gov’t: Loan $ for startup Administration– Priority for Funds: Integrated,

Statewide & Non-Gov’t support• Qualifications for Funds

– Has to be a new entity– Can’t be a Carrier or Gov’t subsidiary

Elected Board

Exchange $

$5B

Cooperatives: Real-World Examples

• Most Applicable Existing Models• Group Health Cooperative &

HealthPartners– Sell through Brokers– GHC: 2/3 in-house Drs/Facilities– HP: 1/3 in-house Drs/Facilities– Act just like other Insurance

Companies– Large HMOs– Members identify more with HMO

philosophy than with membership– Tremendous information– Efficiency? Yes & No– Decisions of members often very

similar to decisions of owners

Elected Board

$Broker

Cooperatives: The Growing Discussion

• Examples That Don’t Apply– Health Insurance Purchasing Cooperatives (HIPCs)– Population-Specific Business Cooperatives

• Market Implications– More Insurance Companies– Will Brokers be Able to Sell Cooperative Products?

• How Can We Drive the Discussion?– How will they improve competition?– Why will they be more honest than Insurance Carriers?– Where is proof they’re more efficient?

Future of Healthcare Forum

• Highlights From New World of Healthcare Forum• Future of Products?• Future of Carriers?• Future of Brokers?• Future of Broker Commissions?• How Can We Affect Change?

Future of Products?

• Transparency• Individualized by Patient• Rankings by Price / Quality• Behavior Change: Fun• Horse Power Challenge• Incentives & Rewards Work• New Approaches • Virtual Health Records• Social Networks by Disease• Make it Fun

Mike McCallisterPresident & CEO, Humana

Future of Carriers?

Brian SassiPresident & CEO , WellPoint Consumer Business

• Merge Small Group / Individual• New Pricing• In-Migration of High Risk

Members?• COBRA Members • Uninsured (Mixed)• Multi-Line Products by Carriers• Bigger Market for Specialty • Carrier Consolidation• Growth of Individual

Future of Brokers?

• What Makes a Top Firm?• Engaged Leadership• Clearly Articulate Differentiator• A Plan• Best Players• Training & Performance Mgmt• Sell Themselves, Not a Product• Value Added Differentiation• Protect Relationships!

Ken FasolaFormer CEO, Secure Horizons

Future of Brokers, In Light of Exchanges?

• Limit the Exchange– A Regulatory Agency– Defining the Plans– Monitoring Body

• Set to Replace Brokers• Explaining Role of Broker• Exchange Would Cost Billions• Use Infrastructure in Place• BenefitMall Lobbyists at Work• Launching Online Community • For Brokers / Carriers to

Communicate & Participate

Bernie DiFioreCEO, BenefitMall

Future of Broker Commissions?

• Not Fundamentally Change

• Probably Not Always Tied to Medical Inflation

• Work Still Needs to be Done

• Work Needs to be Paid For

• Will Still Vary By Carrier

Mike McCallister

Future of Broker Commissions?

• Physician/Hospital Comp Will Change

• Brokers’ Probably Will, Too• If Comp Reduced, Doesn’t

Mean We Can’t Generate Income

• Time Is Not Our Ally• Have Your Voice Heard

Ken Fasola

How Can We Affect Change?

• Media Usage?• Best: “Un-Earned Media”

– TV– Radio Talk Shows– Op-Eds– Letter to Editor– Quoted in Articles

• Value: Volume of Hits• Read Local Editorials • Respond: Short Letter to

Editor• Member of Congress

Reads Daily

Janet TrautweinCEO, National Association of Health Underwriters

The Legislative Process

• A Reminder of the Process– Road Map to a Health Reform Law– What We’ll See This Fall

• Building Blocks of 2009 Reforms

Senate Passes House Passes Bill Combined Bill via Rules Committee

Debate & Passage Debate & PassageIn Senate In House

Bipartisan Work to Combine Bills Conference Committee Sets Rules for Debate & Votes

Senate HouseFinance

Committee

Health EducationLabor & Pension (HELP)

Committee

Education & Labor

Committee

Energy & CommerceCommittee

Ways & Means

Committee

Finance Bill

HELPBill

HouseBill

SenateBill

CombinedBill

HenryWaxman

GeorgeMiller

CharlesRangel

MaxBaucus

TedKennedy

HarryReid

NancyPelosi

FinalBill

Road Map to a Health Reform Law

Cost Containment

Strategies

Government SubsidiesIndividual Mandate

EmployerMandate

Building Blocks of 2009 Reforms

Connector /Exchange

Large Fund-RaisingMechanisms

Cooperative

Public Insurance

Plan

IndividualsEmployers

Staying Engaged On Reform

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Q&A: Follow Up AnswersBlog: Give Your Input!