Transcript Slide 1

HEALTH REFORM ISSUES
FACING THE NEXT PRESIDENT
Brian Biles, MD MPH
Department of Health Policy
George Washington University
February 21, 2008
HEALTH REFORM ISSUES IN 2009

Health insurance coverage/uninsured

Health care costs/increases in costs

Effectiveness/quality of health care
HEALTH INSURANCE COVERAGE
Children and Nonelderly Adults, 2006
Children
Adults under 65
Uninsured
12%
Uninsured
20%
Medicaid
11%
Employer
56%
Medicaid
28%
Employer
63%
Other Private
6%
Other Private
4%
Total: 78.2 million
Total: 181.8 million
Note Medicaid also includes S-CHIP, other state programs, Medicare, and military-related coverage.
SOURCE: KCMU and Urban Institute estimates based on March 2007 Current Population Survey.
NUMBER OF UNINSURED
AMERICANS IS HIGH & INCREASING
Uninsured in Millions
46.5
43.0
44.4
8.4
8.7
9.4
34.6
35.6
37.0
2004
2005
2006
SOURCE: KCMU/Urban Institute analysis of March CPS for each year.
Children
Adults
PERCENTAGE OF FIRMS OFFERING
HEALTH BENEFITS IS DECREASING
2000–2007
100%
90%
80%
70%
66%
69%
1999
2000
68%
66%
66%
63%
60%
61%
60%
2002
2003
2004
2005
2006
2007
60%
50%
40%
30%
20%
10%
0%
2001
*Tests found no statistical difference from estimate for the previous year shown (p<.05).
Note: As noted in the Survey Design and Methods section, estimates presented in this exhibit are based on the sample of both firms that
completed the entire survey and those that answered just one question about whether they offer health benefits.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2007.
THE UNINSURED ARE LOW-INCOME
WORKERS AND THEIR FAMILIES 2006
Family Work Status
Part-Time
Workers
11%
Family Income
400% FPL and
Above
11%
Age
0-18
20%
<100% FPL
36%
No
Workers
18%
200-399% FPL
24%
35-54
32%
100-199% FPL
29%
1 or More FullTime Workers
71%
Total = 46.5 million uninsured
The federal poverty level was $20,614 for a family of four in 2006.
SOURCE: KCMU/Urban Institute analysis of March 2007 CPS.
55-64
9%
19-34
39%
UNINSURED ARE HEAVILY LOCATED IN
SOUTHERN AND WESTERN STATES 2005-2006
NH
VT
WA
MT
ME
ND
MN
OR
ID
SD
MI
RI
WY
PA
IA
NE
NE
NV
UT
CA
KS
WV
VA
NC
OK
AZ
NM
TN
TX
AK
AL
DC
SC
AR
MS
DE
MD
KY
MO
CT
NJ
OH
IN
IL
CO
MA
NY
WI
GA
LA
FL
HI
US Average = 18%
SOURCE: Urban Institute and KCMU analysis of the March 2006 and 2007 Current
Population Survey. Two-year pooled estimates for states and the US (2005-2006).
>20% (10 states)
18%-20% (9 states)
13-17% (18 states & DC)
< 13% (13 states)
HEALTH INSURANCE MATTERS
BARRIERS TO HEALTH CARE
By Insurance Status 2006
Percent of adults (age 19 – 64) reporting in past 12 months:
54%
No Regular Source
of Care
Postponed Seeking
Care because of
Cost
Needed Care but
Did Not Get It
Could Not Afford
Prescription Drug
10%
10%
26%
11%
Uninsured
6%
23%
9%
Medicaid/Other Public
Private
3%
23%
14%
4%
NOTE: Respondents who said usual source of care was the emergency room were included among those not having a
usual source of care.
SOURCE: KCMU analysis of 2006 NHIS data.
HEALTH CARE COSTS

US health care costs substantially exceed those
of other major OECD nations
US costs now average $7,500 per person while
Germany, Canada, Britain and other major nations
spend under $4,000
 US spends 16% of its GDP on health care while the
major European nations spend less than 12%


US spending in 2018 is now projected to exceed
$12,500 per person and 19.5% of GDP
HEALTH COSTS CONTINUE TO INCREASE
$8,000
$7,000
$6,697
$6,322
$5,952
$6,000
$5,559
$5,148
$5,000
$3,938
$4,104 $4,299
$4,522
$4,790
$3,783
$4,000
$2,813
$3,000
$2,000
$1,102
$1,000
$148
$356
$0
1960 1970 1980 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
NHE as a Share of GDP
5.2% 7.2% 9.1% 12.3% 13.7% 13.7% 13.6% 13.6% 13.7% 13.8% 14.5% 15.3% 15.8% 15.9% 16.0%
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at
http://www.cms.hhs.gov/NationalHealthExpendData
(see Historical; NHE summary including share of GDP, CY 1960-2005; file nhegdp05.zip).
ANNUAL PREMIUM COSTS FOR COVERED
WORKERS INCREASE: 2000 and 2007
$12,106
Employer Contribution
Worker Contribution
$6,438
$8,825
$4,479
$2,471
$4,819
$3,785
$2,137 $334
2000
$694
2007
Single Coverage
$1,619
2000
$3,281
2007
Family Coverage
Note: Family coverage is defined as health coverage for a family of four. Data represents average for all
types of plans.
SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2007.
EFFECTIVENESS/QUALITY OF
HEALTH CARE



IOM’s To Err is Human and Quality Chasm
reports document in great detail the quality
shortcomings of US health care
National longevity and mortality rates trail
almost all other OECD nations
Detailed health services outcomes research
indicates that much US health care fails to
address conditions amenable to health care
OPPORTUNITY FOR HEALTH REFORM IN 2009
Percent naming HEALTH CARE as one of the top two issues they’d most like to hear
presidential candidates talk about, by political party self-identification:
50%
45%
42%
39%
40%
Democrats
30%
30%
30%
26%
20%
22%
24%
21%
25%
Independents
21%
18%
10%
Republicans
0%
Mar-07
Jun-07
Source: Kaiser Health Tracking Poll: Election 2008
Aug-07
Oct-07
WHAT THE PUBLIC WANTS
Proposals from 2008 Candidates:
A new health plan that would provide
insurance for nearly all of the
uninsured and would involve a
51%
substantial increase in spending
A new health plan that is more
25%
limited and would cover only
some uninsured groups, but would
involve less spending
A health plan that would keep
15%
things basically as they are
SOURCE: Kaiser Health Tracking Poll: Election 2008, Volume 3, October 2007.
DEMOCRATIC VIEWS ON
HEALTH REFORM

Presidential candidates: Obama, Clinton

Congressional leaders: Representatives Stark,
Dingell, Waxman; Senators Baucus, Kennedy

Congressional leaders: Speaker Pelosi, Majority
Leader Reid
DEMOCRATIC PROPOSALS TO
EXPAND COVERAGE

Employers mandated to provide health
insurance coverage
Or pay percentage of payroll towards costs of public
plan
 “Pay-or-play” approach to coverage



Subsidies to low-wage firms and individuals
Some proposals include individual mandate with
subsidies to low-income individuals
DEMOCRATIC PROPOSALS TO
EXPAND COVERAGE

National health insurance connector/FEHBP-type
private health insurance options program
Uniform benefit packages
 Risk adjustment system


Medicare-type public plan offered as option in
connector program

Expansion of Medicaid and SCHIP

Some proposals include reinsurance for employer plans
for catastrophic costs
DEMOCRATIC PROPOSALS TO
LIMIT COSTS

Health insurance connector to reduce administrative
costs

Medicare-type plan as option in connector with lower
provider payments and administrative costs

National Health Information Technology system

Rx drug reforms in advertising and marketing

Elimination of over payment to Medicare MA plans
TOTAL NATIONAL HEALTH EXPENDITURES,
2008–2017
Projected and Various Scenarios
Dollars in trillions
$4.5
Projected under current system
4.4
4.1
$4.0
$3.5
$3.0
$2.5
Insurance Connector plus selected individual
options*
Spending at current proportion (16.2%) of GDP 3.4
3.2
3.2
3.0
3.0
3.0
2.8
2.9 2.9
2.6
2.7 2.8
2.4
2.6
2.5
2.3
2.4
4.1
3.9
3.6
3.4
3.1
3.9
3.7
3.3
3.4
3.6
$2.0
2007
2008
2009
2010
2011
2012
* Selected individual options include improved information, payment reform, and public health.
Source: Based on projected expenditures absent policy change and Lewin estimates.
2013
2014
2015
2016
2017
DEMOCRATIC PROPOSALS TO IMPROVE
QUALITY/HEALTH SYSTEM PERFORMANCE

National Health Information Technology system

Comparative effectiveness research and payments

Pay-for-quality payments system Medicare

Malpractice reform
CHALLENGES TO HEALTH REFORM

Costs of new health insurance for 45 million
Over $100 billion per year and $1 trillion over 10 yrs
 Over $2 per hour for individual and $6 per hour for
family employer coverage


Lack of experience with effective cost control
programs in the US
Little effective public sector regulation
 Little effective private sector competition

CHALLENGES TO HEALTH
REFORM

History of provider opposition to major changes

Health care lobbying effort in Washington is huge:
at $300 million per year it is larger than any other
industry
OPPORTUNITIES FOR HEALTH
REFORM LEGISLATION

Democratic president and increased majority in
Senate

Health care widely discussed as major issue in
Presidential campaign in 2008

Democrats have settled public/private coverage
divide with Medicare-type plan offered in health care
connector and pay-or-play proposals

$100+ b a year isn’t really a lot in a $2/4 trillion health
care system and a $14/21 t national economy

Providers are now beginning to support expanded
coverage proposals: FAH, AMA, others
OPPORTUNITIES FOR HEALTH
REFORM LEGISLATION

Priority legislation has been adopted in first
year of term for the last four Presidents:
Bush II: Tax cuts in 2001
 Clinton: Deficit reduction reconciliation bill in 1993
 Bush I: Deficit reduction reconciliation bill in 1989
 Reagan: Tax cuts in first big reconciliation bill in 1981


Major health legislation in third year of first
term of Bush II

Medicare Modernization Act in 2003
2009 COULD BE SECOND CHANCE AT 1993
AND 1973-74

It’s the economy stupid


And don’t forget about health care
With some lessons learned
It’s a one year window of opportunity
 Let Congress do the work
 Don’t let the perfect be the enemy of the good

INFORMATION AND ANALYSIS OF
HEALTH REFORM ISSUES

The Commonwealth Fund: Commission on a
High Performance Health System
www.commonwealthfund.org

Kaiser Family Foundation: Commission on
Medicaid and the Uninsured
www.kff.org
Barack Obama

Require children to have health coverage

Expand Medicaid and SCHIP

Require employers to offer or contribute a percentage of payroll to
coverage

Provide income-related subsidies for low-income families

Create a national health insurance exchange with private plans and
a public plan with benefits similar to those in FEHBP

Regulations on insurers to prevent denials of coverage

Estimated cost is $50-65 billion, funded by ending tax cuts for
those with incomes over $250,000 and savings to health system
Hillary Clinton

Require large employers to offer or contribute; tax credits for small
employers that offer coverage

Expand Medicaid and SCHIP

Expansion of group insurance options through Health Choices Menu

FEHBP buy-in with public plan option based on Medicare

Premium subsidies through refundable tax credits, with limit on premiums
as a percent of income

Reinsurance for catastrophic retiree health costs

Regulations on insurers to prevent insurance discrimination

Individual mandate

Estimated cost is $110 billion per year, funded by ending tax cuts for those
with incomes over $250,000, health system savings and limiting the tax
exclusion for ESI