BACKGROUND QUESTIONS AND ANSWERS

ON HEALTH CARE PLAN

Q. I like my current insurance coverage. Will I have to change plans?

A. No, you will not have to change plans. For those who have insurance now, nothing
will change under the Obama plan – except that you will pay less. Obama’s plan will
save a typical family up to $2,500 on premiums by bringing the health care system into
the 21st century: cutting waste, improving technology, expanding coverage to all
Americans, and paying for some high-cost cases.

Q. How will I be able to sign up?

A. Signing up for the plan will be easy. You will be able do it on your tax return, on the
Internet, on forms you can get from your employer, in churches, libraries, motor vehicle
bureaus and all sorts of places.

Q. How will the mandate that children be covered affect me?

A. When children are born, their parents will be assisted in signing them up for
affordable, high quality coverage, either through their own employer-sponsored insurance
plans, through Medicaid or SCHIP, or through options established by the Obama plan.
We will continue to make sure that children are covered, which may include verification
when parents sign them up for daycare or school. Obama’s plan will help parents make
sure their children get the care they need, at the time they need it.

Q. I am on Medicaid / my family is on S-CHIP. Will I be able to stay on these

programs?

A. Yes. The Medicaid and SCHIP programs are examples of successful state-federal
partnerships, covering millions of low-income children, adults, disabled individuals and
seniors, including many seniors in nursing homes. As we work to expand health
coverage to every American, it makes sense to build upon these successful partnerships,
and equally important, to increase the funding to keep them sustainable, instead of
dismantling them. The Obama plan would actually expand Medicaid and S-CHIP to
cover more families and working people.

Q. Won’t my employer drop coverage?

A. No. Employers who do not offer meaningful coverage to their employees will have to
contribute a percentage of their payroll to help offset the cost of providing coverage to all
Americans. In most cases, this will eliminate an employer’s incentive to drop coverage.
Some small employers will be exempt from this requirement.

Q. Obama says his plan will save $2,500 annually for my family. How?

A. Through a combination of developing efficiencies in the system, expanding

coverage to all Americans, and picking up the cost of some high-cost cases.
Specifically:

Health IT investment, which will reduce unnecessary and wasteful
spending in the health care system. Examples include extra hospital stays
because of preventable medical errors and duplicative diagnostic tests;

Improving prevention and management of chronic conditions;

Increasing insurance industry competition and reining in the abusive
practices of monopoly insurance and drug companies;

Providing reinsurance for catastrophic cases, which will reduce insurance
premiums; and

Ensuring every American has health coverage, which will reduce spending
on the “uncompensated” care of uninsured people who end up in
emergency rooms and whose care is picked up by institutions and then
passed through higher charges to insured individuals.

Q. I have insurance, but I spend so much money on deductibles, premiums and co-
pays that I can’t afford anything else. Will Obama’s plan help me?

A. Yes. The Obama plan is designed to help people exactly like you. His plan will help
the millions of families who currently have health insurance from their employer, but
nonetheless are feeling squeezed by fast-rising premiums, co-pays, and deductibles.
Nearly 11 million insured Americans spent more than a quarter of their salary on health
care last year. Obama’s plan will reduce a typical family’s premium by up to $2,500 by
reducing costs, improving technology, and reigning in the power of insurance companies.

Q. I don’t want the government telling me which doctors to see or what treatments
to get. Will the Obama plan force these kinds of decisions on me?

A. Senator Obama agrees with you. His plan will not tell you which doctors to see or
what treatments to get. Under the Obama health care plan, you will be able to keep your
doctor and your health insurance if you want. No government bureaucrat will second-
guess decisions about your care.

Q. Will I still have choice in health plans?

A. Yes. Obama’s plan actually will increase the choices available to you. If you like the
insurance you have now, nothing will change under the Obama plan, except that you will
pay less. If you do not have insurance you can choose to enroll in the new public plan,
which will offer benefits similar to what every federal employee and member of
Congress gets. Or you can choose private plan options through the national health
exchange. But none of the plans will be allowed to drop you just because you get sick.

Q. I am a business owner, how does the Obama plan affect my company and the
economy in general?

A. By reducing health care costs, the Obama plan will save employers $140 billion
per year.

First, Obama’s plan includes a reinsurance pool for employers. If employer health care
costs exceed a certain amount, the federal government will pick up the tab, as long as the
employer agrees to pass the savings onto their employees. That helps businesses who
have that one sick employee to be able to continue offering health insurance to their
employees and keep their doors open.

Second, Obama’s plan goes beyond short-term fixes to address the main cost drivers in
health care, which will help to stabilize the rising costs of health care, which are simply
unsustainable over the long term. The Obama plan makes a real investment in health IT
and other health system changes, which will dramatically improve quality and efficiency
of the health care system, bringing it into the 21st century. The Obama plan will also
aggressively hold the insurance and pharmaceutical industries accountable for unfair and
abusive practices that are raising prices for families and employers. Finally, Obama will
invest in prevention and public health systems, which will help Americans stay healthy
and lower costs from having to treat preventable diseases.

Third, for employers that already offer coverage to their employees, Obama’s plan will
make it less costly for them to continue to do so, because every American will be
covered. The health care costs of the uninsured will no longer be passed along to those
who do have health insurance, which will drive down health insurance premiums.

The Obama plan will also help employers that are unable to offer health coverage to their
employees right now. The main reason employers do not offer health coverage to their
employees is because it is simply too expensive. Obama’s plan directly addresses the
cost issue by allowing small employers to purchase a new public plan with subsidies for
those who need it. For those who want private insurance, the Obama plan creates a
National Health Insurance Exchange, which will act as a watchdog group and help reform
the private insurance market by creating rules and standards for participating insurance
plans to ensure fairness and to make coverage more affordable and accessible.

Q. I own a small business but don’t offer insurance. How much will I have to
pay for each employee? And how does the Obama plan help my small business?

A. Obama’s plan will help small employers that are unable to offer health coverage to
their employees right now. The main reason small employers do not offer health coverage
to their employees is because it is simply too expensive. The Obama plan allows small
employers to enter the National Health Insurance Exchange to purchase either a new
public plan or a private plan for their employees, who will be eligible for subsidies if they
need them. Very small businesses and start-ups will be exempted from the obligation to
pay into the system or provide meaningful coverage for their employees.

The reinsurance proposal will also reduce the volatility of premiums for small businesses.
For small businesses, having a single employee with catastrophic expenditures can make
insurance unaffordable for all of the workers in the firm. The Obama plan would
reimburse employer health plans for a portion of the catastrophic costs they incur above a
threshold if they guarantee such savings are used to reduce the cost of workers’
premiums. Offsetting some of the catastrophic costs will make health care more
affordable for employers, workers, and their families.

Q. What if I am self-employed?

A. Then you know how hard it is for self-employed people to buy affordable health
insurance today. Obama’s plan will ensure that small businesses and those who are self-
employed have affordable health care. Obama's new health plan will give individuals the
choice of buying affordable health coverage that is similar to the plan available to federal
employees and members of Congress or a private health insurance plan through an
insurance market place known as the Health Insurance Exchange. The insurance will be
affordable for all Americans and the insurance companies will not be allowed to deny
you coverage or drop you because you get sick, the way they do now.

Q. What if I have a pre-existing condition?

Under the Obama health care plan, no American will be turned away because of illness or
pre-existing conditions. This guaranteed eligibility will apply to private insurance
offered by employers and both the private and public insurance plans offered through the
National Health Insurance Exchange. No insurance companies will be allowed to
discriminate because of a previous bout with cancer or some other pre-existing illness.

Q. Does the Obama plan support mental health parity?

A. Yes. Under the Obama plan, private insurance offered by employers and both the
private and public insurance plans will include coverage of all essential medical services,
including mental health care. Obama is a strong supporter of mental health parity and he
believes that serious mental illnesses must be covered on the same terms and conditions
as are applicable to physical illnesses and diseases. He does not think health insurance
companies should be allowed to discriminate against the mentally ill.

Q. How much will it cost us taxpayers?

A. The Obama plan will cost between $50-65 billion a year when fully phased in.

Q. How will we pay for the Obama plan?

A. The Obama plan will realize tremendous savings within the health care system to help
finance the plan. The additional revenue needed to fund the up-front investments in
technology and to help people who cannot afford health insurance is more than covered
by allowing the Bush tax cuts to expire for people making more than $250,000 per year,
as they are scheduled to do.