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HEALTH REFORM ISSUES HEALTH REFORM ISSUES FACING THE NEXT FACING THE NEXT
PRESIDENTPRESIDENT
Brian Biles, MD MPHBrian Biles, MD MPH
Department of Health PolicyDepartment of Health Policy
George Washington UniversityGeorge Washington University
February 21, 2008February 21, 2008
HEALTH REFORM ISSUES IN HEALTH REFORM ISSUES IN 20092009
Health insurance Health insurance coveragecoverage/uninsured/uninsured
Health care costsHealth care costs/increases in /increases in costscosts
EffectivenessEffectiveness/quality of health care /quality of health care
HEALTH INSURANCE HEALTH INSURANCE COVERAGECOVERAGE
Children and Nonelderly Adults, Children and Nonelderly Adults, 20062006
Uninsured12%
Medicaid28%
Other Private4%
Employer56%
Uninsured20%
Medicaid11%
Other Private6%
Employer63%
Children Adults under 65
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
34.6 37.0
8.4 8.7 9.4
35.6
2004 2005 2006
Children
Adults
Uninsured in Millions
SOURCE: KCMU/Urban Institute analysis of March CPS for each year.
43.043.0 44.444.4 46.546.5
PERCENTAGE OF FIRMS PERCENTAGE OF FIRMS OFFERING HEALTH BENEFITS IS OFFERING HEALTH BENEFITS IS
DECREASING DECREASING 2000–20072000–2007
66% 69% 68% 66% 66% 63% 60% 61% 60%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999 2000 2001 2002 2003 2004 2005 2006 2007
*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-THE UNINSURED ARE LOW-INCOME WORKERS AND THEIR INCOME WORKERS AND THEIR
FAMILIES FAMILIES 20062006
400% FPL and Above11%
200-399% FPL24%
100-199% FPL29%
<100% FPL36%
Family IncomeFamily Work Status
Total =Total = 46.5 million uninsured46.5 million uninsured
1 or More Full-Time Workers
71%
No Workers
18%
Part-TimeWorkers
11%
Age
55-649%
35-5432%
19-3439%
0-1820%
The federal poverty level was $20,614 for a family of four in 2006. SOURCE: KCMU/Urban Institute analysis of March 2007 CPS.
IL
UNINSURED ARE HEAVILY LOCATED IN UNINSURED ARE HEAVILY LOCATED IN SOUTHERN AND WESTERN STATES SOUTHERN AND WESTERN STATES 2005-2005-
20062006
AZAR
MS
LA
WA
MN
ND
WY
ID
UTCO
OR
NV
CA
MT
IA
WIMI
NE
SD
ME
MOKS
OHIN
NY
KY
TNNC
NH
MA
VT
PA
VAWV
CTNJ
DE
MD
RI
HI
DC
AK
SCNM
OK
GA
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).
TX
FL
AL
US Average = US Average = 18%18%
NE
13-17% (18 states & DC)18%-20% (9 states)
< 13% (13 states)
>20% (10 states)
HEALTH INSURANCE MATTERSHEALTH INSURANCE MATTERSBARRIERS TO HEALTH CARE BARRIERS TO HEALTH CARE
By Insurance StatusBy Insurance Status 2006 2006
4%
3%
6%
10%
14%
9%
11%
10%
23%
23%
26%
54%
Could Not AffordPrescription Drug
Needed Care butDid Not Get It
Postponed SeekingCare because of
Cost
No Regular Sourceof Care
Uninsured
Medicaid/Other Public
Private
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.
Percent of adults (age 19 – 64) reporting in Percent of adults (age 19 – 64) reporting in past 12 months:past 12 months:
HEALTH CARE COSTSHEALTH CARE COSTS
US health care costs substantially exceed US health care costs substantially exceed those of other major OECD nationsthose of other major OECD nations US costs now average US costs now average $7,500$7,500 per person while per person while
Germany, Canada, Britain and other major Germany, Canada, Britain and other major nations spend under nations spend under $4,000$4,000
US spends US spends 16%16% of its GDP on health care while of its GDP on health care while the major European nations spend less than the major European nations spend less than 12%12%
US spending in US spending in 20182018 is now projected to is now projected to exceed exceed $12,500 per person and 19.5% of $12,500 per person and 19.5% of GDPGDP
$148$356
$1,102
$2,813
$4,299$4,522
$4,790$5,148
$5,559$5,952
$6,322$6,697
$3,783$3,938
$4,104
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
1960 1970 1980 1990 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
NHE as a Share of GDP
HEALTH COSTS CONTINUE TO HEALTH COSTS CONTINUE TO INCREASEINCREASE
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).
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%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%
$2,137$3,785
$4,819
$8,825
$3,281$1,619$694$334
2000 2007 2000 2007
Employer ContributionWorker Contribution
ANNUAL PREMIUM COSTS FOR ANNUAL PREMIUM COSTS FOR COVERED WORKERS INCREASE: 2000 COVERED WORKERS INCREASE: 2000
and 2007and 2007
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.
$2,471$2,471
$6,438$6,438
$4,479$4,479
$12,106$12,106
Single CoverageSingle Coverage Family Family CoverageCoverage
EFFECTIVENESS/QUALITY OF EFFECTIVENESS/QUALITY OF
HEALTH CAREHEALTH CARE IOM’s IOM’s To Err is HumanTo Err is Human and and Quality Quality
ChasmChasm reports document in great detail reports document in great detail the quality shortcomings of US health the quality shortcomings of US health care care
National National longevity and mortality rateslongevity and mortality rates trail almost all other OECD nationstrail almost all other OECD nations
Detailed health services outcomes Detailed health services outcomes research indicates that much US health research indicates that much US health care care fails to address conditions fails to address conditions amenable to healthamenable to health care care
Source: Kaiser Health Tracking Poll: Election 2008
Percent naming HEALTH CAREHEALTH CARE as one of the top two issuestop two issues they’d most like to hear presidential candidates talk about, by political party self-identification:
OPPORTUNITY FOR HEALTH REFORM OPPORTUNITY FOR HEALTH REFORM IN 2009IN 2009
30%30%
45%
21%
42%
26%25%
39%
24%
22% 21%
18%
0%
10%
20%
30%
40%
50%
Mar-07 Jun-07 Aug-07 Oct-07
Democrats
Independents
Republicans
WHAT THE PUBLIC WANTSWHAT THE PUBLIC WANTS
15%
51%
25%
A new health plan that would provide insurance for nearly all of the
uninsured and would involve a substantial increase in spending
A new health plan that is more limited and would cover only
some uninsured groups, but would involve less spending
A health plan that would keep things basically as they are
Proposals from 2008 Proposals from 2008 Candidates:Candidates:
SOURCE: Kaiser Health Tracking Poll: Election 2008, Volume 3, October 2007.
DEMOCRATIC VIEWS ON DEMOCRATIC VIEWS ON HEALTH REFORMHEALTH REFORM
Presidential candidates: Obama, Presidential candidates: Obama, ClintonClinton
Congressional leaders: Congressional leaders: Representatives Representatives StarkStark, Dingell, , Dingell, WaxmanWaxman; Senators Baucus, ; Senators Baucus, KennedyKennedy
Congressional leaders: Speaker Congressional leaders: Speaker PelosiPelosi, Majority Leader Reid, Majority Leader Reid
DEMOCRATIC PROPOSALS TO DEMOCRATIC PROPOSALS TO EXPAND COVERAGEEXPAND COVERAGE
Employers mandatedEmployers mandated to provide health to provide health insurance coverageinsurance coverage Or pay percentage of payroll towards costs Or pay percentage of payroll towards costs
of public planof public plan ““Pay-or-playPay-or-play” approach to coverage” approach to coverage
Subsidies to low-wageSubsidies to low-wage firms and firms and individualsindividuals
Some proposals include individual Some proposals include individual mandate with subsidies to low-income mandate with subsidies to low-income individualsindividuals
DEMOCRATIC PROPOSALS TO DEMOCRATIC PROPOSALS TO EXPAND COVERAGEEXPAND COVERAGE
National health insurance National health insurance connectorconnector/FEHBP-type private health /FEHBP-type private health insurance options programinsurance options program
Uniform benefit packagesUniform benefit packages Risk adjustment systemRisk adjustment system
Medicare-type public planMedicare-type public plan offered as offered as option in connector programoption in connector program
Expansion of Medicaid and SCHIPExpansion of Medicaid and SCHIP
Some proposals include reinsurance for Some proposals include reinsurance for employer plans for catastrophic costsemployer plans for catastrophic costs
DEMOCRATIC PROPOSALS TO DEMOCRATIC PROPOSALS TO LIMIT COSTSLIMIT COSTS
Health insurance connector Health insurance connector to reduce to reduce administrative costsadministrative costs
Medicare-type planMedicare-type plan as option in connector with as option in connector with lower provider payments and administrative lower provider payments and administrative costscosts
National National Health Information TechnologyHealth Information Technology systemsystem
RRxx drug reforms drug reforms in advertising and marketing in advertising and marketing
Elimination of Elimination of over payment to Medicare MA over payment to Medicare MA plansplans
TOTAL NATIONAL HEALTH TOTAL NATIONAL HEALTH EXPENDITURES, 2008–2017 EXPENDITURES, 2008–2017
Projected and Various ScenariosProjected and Various Scenarios
4.44.1
3.9
3.63.4
3.23.0
2.82.6
2.42.3
4.13.9
3.73.4
3.23.0
2.92.7
3.63.4
3.33.1
3.02.9
2.82.6
2.52.4
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Projected under current system
Insurance Connector plus selected individualoptions*
Spending at current proportion (16.2%) of GDP
* Selected individual options include improved information, payment reform, and public health.Source: Based on projected expenditures absent policy change and Lewin estimates.
Dollars in Dollars in trillionstrillions
DEMOCRATIC PROPOSALS TO DEMOCRATIC PROPOSALS TO IMPROVE QUALITY/HEALTH SYSTEM IMPROVE QUALITY/HEALTH SYSTEM
PERFORMANCEPERFORMANCE National National Health Information TechnologyHealth Information Technology
systemsystem
Comparative effectivenessComparative effectiveness research and research and paymentspayments
Pay-for-qualityPay-for-quality payments system Medicare payments system Medicare
Malpractice reformMalpractice reform
CHALLENGES TO HEALTH CHALLENGES TO HEALTH REFORM REFORM
Costs of new health insurance for 45 Costs of new health insurance for 45 millionmillion Over $100 billion per year and $1 trillion Over $100 billion per year and $1 trillion
over 10 yrsover 10 yrs Over $2 per hour for individual and $6 per Over $2 per hour for individual and $6 per
hour for family employer coveragehour for family employer coverage
Lack of experience with Lack of experience with effective cost effective cost controlcontrol programs in the US programs in the US Little effective public sector regulationLittle effective public sector regulation Little effective private sector competition Little effective private sector competition
CHALLENGES TO HEALTH CHALLENGES TO HEALTH REFORM REFORM
History of History of provider oppositionprovider opposition to major to major changeschanges
Health care lobbying effort in Health care lobbying effort in WashingtonWashington is huge: at $300 million per is huge: at $300 million per year it is larger than any other industry year it is larger than any other industry
OPPORTUNITIES FOR HEALTH OPPORTUNITIES FOR HEALTH REFORM LEGISLATIONREFORM LEGISLATION
Democratic Democratic president and increased majority president and increased majority in Senatein Senate
Health care widely discussedHealth care widely discussed as major issue in as major issue in Presidential campaign in 2008Presidential campaign in 2008
Democrats have Democrats have settled public/private coverage settled public/private coverage dividedivide with Medicare-type plan offered in health with Medicare-type plan offered in health care connector and pay-or-play proposals care connector and pay-or-play proposals
$100+ b a year isn’t really a lot in a $$100+ b a year isn’t really a lot in a $2/4 trillion 2/4 trillion health care system and a $14/21 t national health care system and a $14/21 t national economyeconomy
Providers are now beginning to supportProviders are now beginning to support expanded coverage proposals: FAH, AMA, othersexpanded coverage proposals: FAH, AMA, others
OPPORTUNITIES FOR HEALTH OPPORTUNITIES FOR HEALTH REFORM LEGISLATIONREFORM LEGISLATION
Priority legislation has been adopted in Priority legislation has been adopted in first yearfirst year of term for the last four of term for the last four Presidents:Presidents: Bush II: Tax cuts in 2001Bush II: Tax cuts in 2001 Clinton: Deficit reduction reconciliation bill in Clinton: Deficit reduction reconciliation bill in
19931993 Bush I: Deficit reduction reconciliation bill in Bush I: Deficit reduction reconciliation bill in
19891989 Reagan: Tax cuts in first big reconciliation bill in Reagan: Tax cuts in first big reconciliation bill in
19811981
Major health legislation in Major health legislation in third yearthird year of first of first term of Bush IIterm of Bush II Medicare Modernization Act in 2003Medicare Modernization Act in 2003
2009 COULD BE SECOND CHANCE 2009 COULD BE SECOND CHANCE AT 1993AT 1993
AND 1973-74AND 1973-74 It’s the economy stupidIt’s the economy stupid
And And don’t forget about health caredon’t forget about health care
With some lessons learnedWith some lessons learned It’s a It’s a one year windowone year window of opportunity of opportunity Let Let CongressCongress do the work do the work Don’t let the Don’t let the perfectperfect be the enemy of be the enemy of
the the goodgood
INFORMATION AND ANALYSIS OF INFORMATION AND ANALYSIS OF HEALTH REFORM ISSUESHEALTH REFORM ISSUES
The Commonwealth Fund: The Commonwealth Fund: Commission on a High Performance Commission on a High Performance Health SystemHealth System
www.commonwealthfund.orgwww.commonwealthfund.org
Kaiser Family Foundation: Kaiser Family Foundation: Commission on Medicaid and the Commission on Medicaid and the UninsuredUninsured
www.www.kffkff.org.org
Barack ObamaBarack Obama
Require children to have health coverageRequire children to have health coverage
Expand Medicaid and SCHIPExpand Medicaid and SCHIP
Require employers to offer or contribute a percentage of Require employers to offer or contribute a percentage of payroll to coverage payroll to coverage
Provide income-related subsidies for low-income familiesProvide income-related subsidies for low-income families
Create a national health insurance exchange with private Create a national health insurance exchange with private plans and a public plan with benefits similar to those in plans and a public plan with benefits similar to those in FEHBPFEHBP
Regulations on insurers to prevent denials of coverageRegulations on insurers to prevent denials of coverage
Estimated cost is $50-65 billion, funded by ending tax Estimated cost is $50-65 billion, funded by ending tax cuts for those with incomes over $250,000 and savings to cuts for those with incomes over $250,000 and savings to health systemhealth system
Hillary Hillary ClintonClinton
Require large employers to offer or contribute; tax credits for Require large employers to offer or contribute; tax credits for small employers that offer coveragesmall employers that offer coverage
Expand Medicaid and SCHIP Expand Medicaid and SCHIP
Expansion of group insurance options through Health Choices Expansion of group insurance options through Health Choices Menu Menu FEHBP buy-in with public plan option based on MedicareFEHBP buy-in with public plan option based on Medicare
Premium subsidies through refundable tax credits, with limit on Premium subsidies through refundable tax credits, with limit on premiums as a percent of incomepremiums as a percent of income
Reinsurance for catastrophic retiree health costsReinsurance for catastrophic retiree health costs
Regulations on insurers to prevent insurance discriminationRegulations on insurers to prevent insurance discrimination
Individual mandateIndividual mandate
Estimated cost is $110 billion per year, funded by ending tax Estimated cost is $110 billion per year, funded by ending tax cuts for those with incomes over $250,000, health system cuts for those with incomes over $250,000, health system savings and limiting the tax exclusion for ESIsavings and limiting the tax exclusion for ESI
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