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
Spending Patterns Overall
Payment Patterns Overall
Payment Structure
Patient Protection and Affordable Care Act – 2010
Primary Sources
– California HealthCare Foundation – Health Care Costs
– 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
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
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)
• 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.