Transcript Medicare: Past, Present, and Future

The Case for Health Reform
in the U.S.
Gerald F. Kominski, Ph.D.
Professor, Department of Health Services
UCLA School of Public Health
Associate Director,
UCLA Center for Health Policy Research
October 7, 2009
The Growth of Private Insurance
1929-1960
Source: Source Book of Health Insurance Data, 1965.
Where Do Most Americans Get Health
Insurance Coverage?
From Their Employer
Type of Coverage
Private
Employment Based
Individual
Government
Medicare
Medicaid
Uninsured
Number (millions)
Percent
202.0
177.4
26.7
83.0
41.4
39.6
45.7
67.5%
59.3%
8.9%
27.8%
13.8%
13.2%
15.3%
Note: Percentages exceed 100% because type of coverage is not mutually exclusive;
individuals can have more than one category of coverage.
Source: U.S. Census Bureau Analysis of March 2008 Current Population Survey
Employers Who Offer Health Insurance
A Tale of Two Cities
100%
90%
99%
80%
70%
65%
99%
99%
98%
98%
99%
68%
68%
66%
65%
63%
60%
50%
56%
57%
58%
58%
55%
40%
52%
98%
98%
99%
59%
60%
59%
47%
48%
2005
2006
45%
99%
62%
49%
30%
20%
10%
0%
1999
2000
2001
2002
2003
*Tests
2004
2007
found no statistical differences from estimate
for the previous year shown (p<.05).
All Small Firms (3-199 Workers)
Note: 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.
3-9 Workers
2008
All Large Firms (200 or More Workers)
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.
How Much Financial Protection Does Health Insurance
Currently Provide?
Not Much, If You Buy Insurance on Your Own, and Have a Low Income


Among those who buy insurance on their own,
those in the highest quartile of expenses spend
14% or more of their pre-tax income on health
care expenses
Among those who buy insurance on their own
and have incomes from 101-200% FPL, those
in the highest quartile of expenses spend
30.5% or more of their pre-tax income on
health care expenses
Source: Jacobs K, Capozza K, Roby DH, Kominski GF, Brown ER. Health Coverage
Expansion in California: What Can Consumers Afford to Spend? UCLA Center for Health
Policy Research, September 2007.
The Probability of Being Uninsured Is Substantial
Below 300% FPL
100%
35%
29%
18%
5%
10%
7%
4%
11%
75%
Uninsured
27%
50%
45%
25%
71%
83%
92%
44%
Medicaid/
Other Public
Employer/
Other Private
20%
0%
<100% FPL 100-199%
FPL
200-299%
FPL
300-399% 400%+ FPL
FPL
NOTE: The federal poverty level (FPL) was $21,203 for a family of four in 2007. Data may not total 100% due
to rounding. Nonelderly defined as age 0-64.
SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of March 2008 CPS.
Impact of the Rise in Unemployment on Health
Coverage, 2007 to 2009
5.0
4.6
4.6%
=
National
Unemployment
Rate Increase
since 2007
(from 4.9% in Dec-07
to 9.5% in June-09)
Decrease in
Employer
Sponsored
Insurance
(million)
11.3
&
Medicaid
/CHIP
Enrollment
Increase
Uninsured
Increase
(million)
Note: Totals may not sum due to rounding and other coverage.
Source: John Holahan and Bowen Garrett, Rising Unemployment, Medicaid, and the Uninsured,
prepared for the Kaiser Commission on Medicaid and the Uninsured, January 2009.
(million)
Sources of Financing, 2007
Total Health Expenditures - $7,421 per Capita
16.2% of GDP
Public
46%
Other Public
12%
Medicaid
15%
Out-ofPocket
12%
Private
54%
Private
Insurance
35%
Medicare
19%
Other
Private
7%
Source: Hartman M, et al., National Health Spending in 2007: Slower Drug Spending
Contributes to Lowest Rate of Overall Growth Since 1998, Health Affairs 2009;28(1):246-261.
Medicare Benefit Payments, by Type of Service, 2009
Low-Income Subsidy
Payments to
Payments
Union/EmployerSponsored Plans
Payments to
1%
Drug Plans
Other Part B Benefits 6%
Hospital
Outpatient
4%
Hospital
Inpatient
4%
Physicians and 19%
Other Suppliers
5%
Home
Health
Part B
Part D
Part A and B
28%
5%
4%
Part A
Skilled Nursing
Facilities
Hospice
3%
23%
Medicare Advantage
(Part C)
Total = $484 billion
NOTE: Does not include administrative expenses such as spending for implementation of the Medicare drug
benefit and the Medicare Advantage program. Total is net of $9.4 billion in recoveries for 2009 .
SOURCE: Congressional Budget Office, Medicare Baseline, March 2009.
Average Payments to Medicare Advantage Plans
Relative to Traditional Fee-for-Service Medicare, 2009
118%
118%
116%
114%
113%
112%
Traditional Feefor-Service
Medicare =
100%
All Medicare Local HMOs
Advantage
Plans
Local PPOs
Regional
PPOs
Private FeeSpecial
For-Service Needs Plans
Plans
Medicare Advantage Plan Types
SOURCE: Medicare Payment Advisory Commission, March 2009.
Medicaid Expenditures by Service, 2007
Long-Term
Care
35.1%
DSH Payments
Inpatient
5.0%
Home Health and
15.0%
Personal Care
15.0%
Physician/ Lab/ X-ray
Mental Health
3.7%
1.5%
Outpatient/Clinic
Acute
ICF/MR
7.4%
Care
3.9%
59.9%
Drugs
4.7%
Nursing
Facilities
Other Acute
14.8%
6.7%
Payments to Medicare
3.5%
Payments to MCOs
19.0%
Total = $319.7 billion
NOTE: Total may not add to 100% due to rounding. Excludes administrative spending,
adjustments and payments to the territories.
SOURCE: Urban Institute estimates based on data from CMS (Form 64), prepared for the Kaiser
Commission on Medicaid and the Uninsured.
5% of the Population Accounts for 50% of Spending
20% Account for 80%
96.8%
Percent of Total Health Care Spending
100%
80%
73.7%
80.3%
64.6%
60%
49.7%
40%
23.4%
20%
3.2%
0%
Top 1%
>$43,289
Top 5%
>$14,098
Top 10%
>$7,628
Top 15%
>$5,274
Top 20%
>$3,886
Top 50%
>$775
Percent of Population, Ranked by Health Care Spending
Bottom
50%
<$776
Note: Population is the civilian noninstitutionalized population, including those with no spending.
Health care spending is total payments from all sources, excluding health insurance premiums .
Source: Kaiser Family Foundation calculations using data from Medical Expenditure Panel Survey
(MEPS), 2005.
The U.S. Spends More Than Any Other Nation,
Largely Because of Private Insurance
Adjusted for Differences in Cost of Living
a
Source: The Commonwealth Fund, calculated from OECD Health Data 2006.
International Comparison of Spending on Health,
1980–2006
Total expenditures on health
as percent of GDP
Australia
Canada
Denmark
France
Germany
Netherlands
New Zealand
Sweden
Switzerland
United Kingdom
United States
16
14
12
Average spending on health
per capita ($US PPP)
7000
Australia
Canada
Denmark
France
Germany
Netherlands
New Zealand
Sweden
Switzerland
United Kingdom
United States
6000
5000
4000
10
3000
8
2000
6
1000
4
0
1980
1984
1988
1992
1996
2000
Data: OECD Health Data 2008, June 2008.
2004
1980
1984
1988
1992
1996
2000
2004
Mortality Amenable to Health Care
Deaths per 100,000 population*
1997/98
150
2002/03
134
130
116
109
99
100
88
81
76
89
84
88
50
71
65
74
71
77
74
115
113
97
97
89
115
106
128
80
82
84
82
84
90
93
96
101
104
103
103
110
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* Countries’ age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke, and bacterial infections.
See report Appendix B for list of all conditions considered amenable to health care in the analysis.
Data: E. Nolte and C. M. McKee, London School of Hygiene and Tropical Medicine analysis of World Health Organization mortality
files (Nolte and McKee 2008).
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
Patients Reporting Access Problems Because of
Costs
Percent of adults who had any of three access problems* in past year because of costs
50
2005
2007
40
37
25
25
26
NZ
AUS
21
12
8
5
0
United States
NETH
UK
CAN
GER
* Did not get medical care because of cost of doctor’s visit, skipped medical test, treatment, or follow-up because of cost, or did
not fill Rx or skipped doses because of cost.
AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom.
Data: 2005 and 2007 Commonwealth Fund International Health Policy Survey.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
Physicians’ Use of Electronic Medical Records
Percent of primary care physicians using electronic medical records
2001
2006
98
100
92
89
79
75
50
42
28
25
23
17
0
United States
NETH
NZ
UK
AUS
GER
AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom.
Data: 2001 and 2006 Commonwealth Fund International Health Policy Survey of Physicians.
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
CAN
Proposed Health Reform
Key Elements of H.R. 3200: America’s Affordable Health
Choices Act of 2009

Require all individuals to have health insurance
- Those without coverage pay a penalty of 2.5% of modified adjusted
gross income
- Exceptions granted for dependents, religious objections, and
financial hardship

Require employers to provide coverage to employees or pay
into a Health Insurance Exchange Trust Fund
- Employers who do not offer insurance pay up to 8% of payroll
- Exceptions for certain small employers, and credits for others to
offset the costs of coverage

Expand Medicaid to 133% of the Federal poverty level
- Federal government pays full cost of expanded eligibility for first 5
years
Proposed Health Reform
Key Elements of H.R. 3200: America’s Affordable Health
Choices Act of 2009

Create a Health Insurance Exchange for individuals and
smaller employers to purchase health coverage
- Premium and cost-sharing credits available to individuals/families
with incomes up to 400% of the federal poverty level
- Out-of-pocket premium expenses limited based on the following
schedule:
• 133-150% FPL:
1.5 - 3% of income
• 150-200% FPL:
3 - 5.5% of income
• 200-250% FPL:
5.5 - 8% of income
• 250-300% FPL:
8 - 10% of income
• 300-350% FPL:
10 - 11% of income
• 350-400% FPL:
11 - 12% of income
Proposed Health Reform
Key Elements of H.R. 3200: America’s Affordable Health
Choices Act of 2009

Impose new regulations on plans participating in the
Exchange and in the small group insurance market
- Guaranteed issue and renewal (no pre-existing condition
exclusions)
- Limit premium variation to age, family status, and market area
- Limit non-medical care expenses (medical loss ratios)
- Prohibit rescissions, except in cases of clear fraud
- Limit annual OOP liability to $5,000 per individual, $10,000 per
family
- No lifetime limits on benefits
- Create public option with payments based on Medicare
payment rates to foster competition
“Public” Concerns About Health Reform
1. I’m satisfied with my health coverage, so why is major
reform necessary?
2. Will it control costs?
3. Is it socialized medicine?
4. Does it create unfair competition with private insurers?
5. Will it produce lower quality care and poorer general
health? Will it ration care?