How Americans Pay for Health Care: An Overview

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Transcript How Americans Pay for Health Care: An Overview

How Americans Pay for Health
Care: A Brief Overview
October 12, 2010
Merton D. Finkler, Ph.D.
John R. Kimberly Distinguished Professor in
the American Economic System
Lawrence University
Agenda
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Spending Patterns Overall
Payment Patterns Overall
Payment Structure
Patient Protection and Affordable Care Act – 2010
Primary Sources
– California HealthCare Foundation – Health Care Costs
101
– Kaiser/ HRET Surveys of Employer-Sponsored Benefits
– 2010 Milliman Medical Index
National HC Spending/ GDP
Cumulative Impact
Spending Distribution by Sector
Spending Distribution by Payor
Health Plan Enrollment
Distribution History
Spending Distribution, Private
Insurance vs. Out-of-Pocket
Worker Identified Premium Payment
Trend
The 80- 20 Rule Provides Guidance
Health Reform Effects on Payment
• Near Term – New coverage requirements
– Expanded dependent coverage up to age 26
– Remove of lifetime and annual limits
– Elimination of cost-sharing for preventive care
– Prohibition of pre-existing conditions clauses
• Since new requirements for coverage neither
require healthy young adults to enroll nor
extra Federal support, premiums are likely to
rise
Health Reforms continued
• Medium Term (2013 – 2014)
– Creation of exchanges with a variety of provisions
– Tax changes include increase in Part A payroll tax rate for
high income taxpayers
– Required coverage for individuals and firms with 50 or
more employees
• Longer Term (2015 or later)
– Multistate compacts for sale of insurance
– Excise tax on employer plans with individual premium of
$10,200 or family premium of $27,500 (2018)
Comments
• Three Legs of Health Care Policy (Cost, Quality, and
Access) Require Coherent Attention
• Health Care Reform Addresses the Insurance Leg
(and partly the access leg)
• Despite the assigned burden, the cost of employer
organized health care mostly falls on the employee
• Demographics and intensive practice styles make our
policy choices increasingly severe
• There are no free lunches.