THE COMMONWEALTH
FUND
The National View of Health Insurance
Cathy SchoenSenior Vice President, The Commonwealth Fund
Alaska Work Shop Panel: National Overview and State Strategies
Anchorage, AlaskaDecember 7, 2006
2
THE COMMONWEALTH
FUND
Overview: Health Insurance, Costs and Health System Performance
• Triple threats to health and economic security– High rates uninsured, unstably insured and under-insured– Rising health care costs outpacing incomes– Low value for high $ investment: inefficient insurance and
care systems with wide variations in quality
• Consequences of inadequate and fragmented insurance coverage – Health and financial risks for uninsured and under-insured– Less healthy, productive workforce– Inefficient health care system– Barrier to achieving a high performance system
• National and state insurance reform strategies: national proposals and recent state action
• Health insurance as critical element to improving overall care system performance
3
THE COMMONWEALTH
FUND
U.S. Healthcare System Falls Short - Need for Policy Action
• Highest costs in the world– Increasing much faster than wages or incomes
– Average family premium exceeds minimum wage worker annual income
• Rising numbers uninsured and underinsured
• Public programs + employer base under stress
• Quality widely variable
• National scorecard score of 66 reflects wide gaps on access, quality and efficiency*
– US evidence – little relationship between quality and efficiency. Opportunity for net gains
– International evidence – not getting value for money
– Lack of 21st Century Infrastructure
*Commonwealth Fund Commission on a High Performance Health System, Why Not the Best?Results from a National Scorecard on U.S. Health System Performance, Sept. 2006
4
THE COMMONWEALTH
FUND
Health Insurance and Cost Trends and Implications
5
THE COMMONWEALTH
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*1999–2005 reflect effect of verification question and implementation of Census 2000-based population controls.Note: Projected estimates for 2005–2013 are for non-elderly uninsured based on T. Gilmer and R. Kronick, “It’s the Premiums, Stupid: Projections of the Uninsured Through 2013,” Health Affairs Web Exclusive, April 5, 2005.
Source: U.S. Census Bureau, March CPS Surveys 1988 to March 2006.
31 33 33 35 3539 40 40 41 42 43 44
40 40 4144
56
45
0
20
40
60
1987 1990 1993 1996 1999* 2002 2005 2008 2011
Millions uninsured
Projected2013
46 47
47 Million Uninsured in 2005 Increasing Steadily Since 2000
6
THE COMMONWEALTH
FUND
One in Five Adults Uninsured: Up 7 Million in 5 YearsPopulation Under Age 65 Uninsured
18
12
16
21
11
18
0
10
20
30
All under 65 Children < 18 Adults 18–64
2000 2005
Data: Analysis of Current Population Survey, March 2000–2006 supplements; EBRI Sources of Health Insurance and Characteristics of the Uninsured, Current Population Survey March 2006.
Percent uninsured
9 9 9 9 8 8 8
30 31 32 35 36 37 38
0
20
40
60
1999 2000 2001 2002 2003 2004 2005
Adults 18–64
Children under 18
Millions uninsured
39 40 4143 45 4645
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 6
7
THE COMMONWEALTH
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Rising Rates of Adults Uninsured Across States: Percent of Adults Ages 18–64 Uninsured
Data: Two-year averages 1999–2000 and 2004–2005 from the Census Bureau’s March 2000, 2001 and 2005, 2006 Current Population Surveys. Estimates by the Employee Benefit Research Institute.
WA
ORID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
ILIN
AR
LA
AL
SCTN
NCKY
FL
VA
OH
MI
WV
PA
NY
AK
MD
MEVTNH
MARI
CT
DE
DC
HI
CO
GAMS
OK
NJ
SD
WA
ORID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
ILIN
AR
LA
AL
SCTN
NCKY
FL
VA
OH
MI
WV
PA
NY
AK
ME
DE
DC
HI
CO
GAMS
OK
NJ
SD
19%–22.9%
Less than 14%
14%–18.9%
23% or more
1999–2000 2004–2005
MA
RI
CT
VTNH
MD
NH
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 7
8
THE COMMONWEALTH
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International Comparison of Spending on Health, 1980–2004
0
1000
2000
3000
4000
5000
6000
7000 United StatesGermanyCanadaFranceAustraliaUnited Kingdom
Data: OECD Health Data 2005 and 2006.
0
2
4
6
8
10
12
14
16
United StatesGermanyCanadaFranceAustraliaUnited Kingdom
Average spending on healthper capita ($US PPP)
Total expenditures on healthas percent of GDP
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 8
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THE COMMONWEALTH
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U.S. National Health Expenditures as a Percent of National Income (GDP): Total Projected to Double
from $2 trillion to $4 Trillion in 10 Years
7.29.1
13.8 13.6 13.815.4 15.9 16.0 16.2
18.020.0
0
5
10
15
20
25
1970 1980 1993 1997 2000 2002 2003 2004 2005 2010 2015
Percent
Source: Smith et al., “National Health Spending In 2004: Recent Slowdown Led By Prescription Drug Spending,” Health Affairs (January/February 2006): 186-196; Smith et al., “Health Spending Projections Through 2015: Changes On The Horizon,” Health Affairs Web Exclusive (February 22, 2006): W61-73.
Projected
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THE COMMONWEALTH
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Growth in National Health Expenditures: Private, Public, and Total Expenditures, 1980–2004
10.3
6.3
8.4
10.1
4.5
7.28.0
10.7
5.3
8.9
5.46.4
0
2
4
6
8
10
12
14
1980–1993 1993–1997 1997–2000 2000–2004
Total NHE Private Public
Average percent growth in health expenditures
Source: Smith et al., “National Health Spending In 2004: Recent Slowdown Led By Prescription Drug Spending,” Health Affairs (January/February 2006): 186-196.
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THE COMMONWEALTH
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Health Expenditure Growth 1980–2004for Selected Categories of Expenditures
9.2
11.8 11.4 11.7 12
8.1
4.63.6
11.1
3.0
4.6
6.2
1.9
15.9
10.8
8.2 8.5
5.9
11.8
13.9
0
5
10
15
20
Hospital care Physician &clinical services
Nursing home &home health
Prescription drugs Prog. admin. & netcost of private
health insurance
1980–1993 1993–1997 1997–2000 2000–2004
Average annual percent growth in health expenditures
Source: Smith et al., “National Health Spending In 2004: Recent Slowdown Led By Prescription Drug Spending,” Health Affairs (January/February 2006): 186-196.
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THE COMMONWEALTH
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Percent of National Health Expenditureson Health Insurance Administration, 2003
a 2002 b 1999 c 2001* Includes claims administration, underwriting, marketing, profits, and other administrative costs; based on premiums minus claims expenses for private insurance.Data: OECD Health Data 2005.
Net costs of health administration and health insurance as percent of national health expenditures
1.9 2.1 2.12.6
3.34.0 4.1 4.2
4.8
5.6
7.3
0
2
4
6
8
a b c *
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 12
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THE COMMONWEALTH
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Source: KFF/HRET Survey of Employer-Sponsored Health Benefits: 2005. Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. Historical estimates ofworkers’ earnings have been updated to reflect new industry classifications .
12.0
18.0
0.8
13.912.9
10.9
8.2
5.3
11.2
8.5 9.2
0
5
10
15
20 Health Insurance PremiumsWorkers EarningsOverall Inflation
Increases in Health Insurance Premiums Compared to Other Indicators, 1988-2005
Percent
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THE COMMONWEALTH
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Deductibles Rise Sharply, Especially in Small Firms, Over 2000–2005*
*Out-of-network deductibles are for 2000 and 2004.
Source: J. Gabel and J. Pickreign, Risky Business: When Mom and Pop Buy Health Insurance for Their Employees (Commonwealth Fund, April 2004); KFF/HRET Employer Health Benefits 2005 Annual Survey.
210
383
157
319
469
676
254
510
$0
$150
$300
$450
$600
$750
$9002000 2005
In-network Out-networkOut-network In-networkSmall Firms,
3-199 EmployeesLarge Firms,
200+ Employees
PPO in-network and out-of-network deductibles
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THE COMMONWEALTH
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0
1000
2000
3000
4000
5000
6000
0 100 200 300 400 500 600 700 800 900
a
Note: Adjusted for Differences in the Cost of Living, 2003.Source: B. Frogner and G. Anderson, “Multinational Comparisons of Health Systems Data, 2005,” The Commonwealth Fund, April 2006.
a2002
Out-of-Pocket Health Care Spending per Capita, US$
National Health Expenditures per Capita, US$
United States
Australia
OECD Median
Canada
Japana
New Zealand
GermanyFranceNetherlands
Greater Out-of-Pocket Costs Not Associated with Lower Spending in Cross-National Comparisons
16
THE COMMONWEALTH
FUND
Insurance Dynamics: Gaps in Coverage
• Annual uninsured estimates undercount the uninsured
• An estimated one third of total under 65 population has had a time uninsured during past 2 years – 80 million people
• Change in family or job status can trigger part-year or longer loss of coverage– Low wage families and seasonal workers at highest risk for
moving in and out of private– High rates of “churning” in public programs
• Negative consequences– Undermines health access and financial security– Inefficient and lower quality of care– High insurance administrative overhead for programs and
providers
17
THE COMMONWEALTH
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Uninsured Rates Rising Among Adults with Low and Moderate Incomes, 2001–2005
15 17 18
33 37 37
1724 28
9
9 9 9
1615 16
1111
13
9
76 2 33
7 9
0
25
50
75 Insured now , time uninsured in pas t year
U ninsured now
Percent of adults ages 19–64
Note: Income refers to annual income. In 2001 and 2003, low income is <$20,000, moderate income is $20,000–$34,999, middle income is $35,000–$59,999, and high income is $60,000 or more. In 2005, low income is <$20,000, moderate income is $20,000–$39,999, middle income is $40,000–$59,999, and high income is $60,000 or more.
Source: S.R. Collins et al., Gaps in Health Insurance Coverage: An All-American Problem, Findings from The Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund, April 2006.
26
52
35
16
4
24
49
28
13
4
Total Low income Moderate income
Middle income
High income2001 2003 2005 2001 2003 20052001 2003 20052001 2003 20052001 2003 2005
28
53
41
18
7
18
THE COMMONWEALTH
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1810 13 15
2839
33 3644
60
3949
59
3743
0
25
50
75
Did not fill a
presc ription
Did not see
spec ialis t w hen
needed
Sk ipped
medic al tes t,
treatment, or
follow -up
Had medic al
problem, did
not see doc tor
or c linic
Any of the four
ac c ess
problems
Insured all year Insured now , time uninsured in past year U ninsured now
Lacking Health Insurance for Any Period Threatens Access to Care
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Percent of adults ages 19–64 reporting the following problems in the past year because of cost:
19
THE COMMONWEALTH
FUND
Adults Without Insurance Are Less Likely to Be Able to Manage Chronic Conditions
16 1827
58
35
59
0
25
50
75
Vis ited ER, hospital, or both for
c hronic c ondition
Sk ipped doses or did not fi ll
presc ription for c hronic c ondition due
to c ost
Insured all year Insured now , time uninsured in past year U ninsured now
Percent of adults 19–64 with at least one chronic condition*
*Hypertension, high blood pressure, or stroke; heart attack or heart disease; diabetes; asthma, emphysema, or lung disease.
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
20
THE COMMONWEALTH
FUND
Adults Without Insurance Are Less Likely to Get Preventive Screening Tests
82
56
7577
31
5664
18
48
0
20
40
60
80
100
Pap tes t Colon c anc er sc reening Mammogram
Insured all year Insured now , time uninsured in past year U ninsured now
Percent of adults
Note: Pap test in past year for females ages 19-29, past three years age 30+; colon cancer screening in past five years for adults age 50+; and mammogram in past two years for females age 50+.
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
21
THE COMMONWEALTH
FUND
1510
193026
41
1923
0
25
50
75
Test results or
records not
available at time of
appointment
Duplicate tests
ordered
Never received
lab/diagnostic test
results or delay in
receiving abnormal
results
Any lab test/
record problems
Insured all year Uninsured during the year
Adults With Any Time Uninsured Receive Less Efficient Care: Duplicate tests and delays
Percent of adults ages 19–64 reporting the following problemsin past two years:
Source: S.R. Collins et al., Gaps in Health Insurance Coverage: An All-American Problem, Findings from The Commonwealth Fund Biennial Health Insurance Survey, The Commonwealth Fund, April 2006.
22
THE COMMONWEALTH
FUND
34
26
38
21
53 53
59
0
40
80
Total Income<$40,000
Income$40,000+
All Insured all year Uninsured during year
47
38
38
44
16
25
33
29
0 40 80
<200% of poverty
200%–399% of poverty
400%+ of poverty
Other
Asian/PI
Hispanic
Black
White
Medical Bill Problems or Accrued Medical Debt for Insured and Uninsured, 2005
Percent of adults (ages 19–64) with any medical bill problem or outstanding debt*
* Problems paying or unable to pay medical bills, contacted by a collection agency for inability to pay medical bills ), had to change way of life to pay bills, or has medical debt being paid off over time.Data: Analysis of 2005 Commonwealth Fund Biennial Health Insurance Survey
By income and insurance status By race/ethnicity and income
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 22
23
THE COMMONWEALTH
FUND
Insurance Design Shift: Market Trends and Policy Increase Patient Cost Sharing
• Double digit premium increases triggering shift in insurance design– Increased patient cost sharing & benefit limits– Move away from spreading costs through premiums to shift
to sicker patients and their families– Current federal tax policies for health savings accounts
encourage high deductible plans
• Risk to basic goals of insurance– facilitate timely access to medical care– financial protection
• Deductibles and cost sharing limits rarely adjust for income
• Underinsured emerging concern
24
THE COMMONWEALTH
FUND
One-Third of All Adults Underinsured or Uninsured: 61 Million Adults, 2003
Insured All Year, Not Underinsured
65%
Underinsured9%
Uninsured During Year26%
Source: C. Schoen, et al., “Insured But Not Protected: How Many Adults Are Underinsured?” Health Affairs Web Exclusive, June 14, 2005. Underinsured=insured all year but had out of pocket costs of 10% of income or 5% if low income or deductible equal to 5% of more of income.
25
THE COMMONWEALTH
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Underinsured and Uninsured Adults At High Risk of Access Problems and Financial Stress
25
117
35
59
44
28
4654
0
25
50
75
Went w ithout c are due to
c os ts
Contac ted by c ollec tion
agenc y about medic al bills
Changed w ay of life
s ignific antly to pay
medic al bills
Insured, not underinsured U nderinsured U ninsured during year
Percent adults 19-64
* Did not fill a prescription; did not see a specialist; skipped recommended care; or did not see doctor when sick because of costs.
Source: C. Schoen, et al., “Insured But Not Protected: How Many Adults Are Underinsured?” Health Affairs Web Exclusive, June 14, 2005.
26
THE COMMONWEALTH
FUND
Privately Insured Adults with High Deductibles Report Higher Rates of Medical Bill Problems
148 6
172323
913
2735
20
5
17
3141
0
25
50
75
Not able to pay
medical bills
Contacted by
collection
agency*
Had to change
way of life to
pay medical
bills
Medical debt
being paid off
over time
Any medical bill
problem or debt
<$500 $500–$999 $1,000+
Percent of adults ages 19–64 privately insured all year
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
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THE COMMONWEALTH
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Cost-Sharing Reduces Use of Both Essential and Less Essential Drugs and Increases Risk of Adverse
Events
9
1514
22
0
5
10
15
20
25
Essential Less Essential
E lderly Low Inc ome
Source: R. Tamblyn et al., “Adverse Events Associated With Prescription Drug Cost-Sharing Among Poor and Elderly Person,” JAMA 285, no. 4 (2001): 421–429.
Percent reduction in drugs per day
117
43
9778
0
20
40
60
80
100
120
140
Adverse Events ED V is its
E lderly Low Inc ome
Percent increase in incidence per 10,000
28
THE COMMONWEALTH
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16.2
21.3
6.4
10.6
0
5
10
15
20
25
A CE Inhibitors S tatins
Copayments Inc reased Copayments NOT Inc reased
Tiered Prescription Drug Cost-SharingLeads to People Not Filling Prescriptions
Source: H.A. Huskamp et al., “The Effect of Incentive-Based Formularies on Prescription-Drug Utilization and Spending,” New England Journal of Medicine (December 4, 2003): 2224–32.
Percent of enrollees discontinuing use of all drugs in class
29
THE COMMONWEALTH
FUND
Health Care Costs Highly Concentrated: Sickest 10% = 70% Total Expenditures
0%
50%
100%
U.S. Population Health Expenditures
1%5%
10%
55%
69%
27%
Source: A.C. Monheit, “Persistence in Health Expenditures in the Short Run: Prevalence and Consequences,” Medical Care 41, supplement 7 (2003): III53–III64.
Distribution of Health Expenditures for the U.S. Population, By Magnitude of Expenditure, 1997
50%
97%
$27,914
$7,995
$4,115
$351
Expenditure Threshold
(1997 Dollars)
30
THE COMMONWEALTH
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Summary of Trends and Implications
• Trends point to increase in under-insured as well as uninsured
– Affordability and access concerns make it harder to distinguish from uninsured
• Insurance design matters for access to effective care and financial protection
– Low and modest income and chronic ill at risk
– Need for attention to costs relative to income and benefit designs that encourage essential and effective care
• Design of insurance expansions need to target affordability and access for insured as well as uninsured
31
THE COMMONWEALTH
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Public Support for Policy Action
• Broad and increasing public support for action on coverage and costs – but no clear consensus– Rising concern among middle income families– Employers?
• Surveys of public indicate willingness to relinquish some tax cuts to finance coverage expansions
• Preferences for source of coverage varies by current source
• Public view financing of coverage as a shared responsibility of citizens, employers, government
32
THE COMMONWEALTH
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National Legislative Proposals Focused on Insurance Expansion
33
THE COMMONWEALTH
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State Children’s Health Insurance Program (SCHIP): 2007 Reauthorization
• SCHIP widely popular and generally viewed as a success. 10th Anniversary requires action to extend
• Critical component of national and state success in maintaining or improving children’s insurance– Has lowered % of low income uninsured– Yet 8 million children remain uninsured– Two-thirds of uninsured children income eligible – Medicaid and SCHIP program rules barrier to
enrolment or staying covered
34
THE COMMONWEALTH
FUND
21.0 21.4 21.6 21.9 22.625.5 26.3 27.8
3.34.6
5.3 6.06.2
1.90.9
1997 1998 1999 2000 2001 2002 2003 2004
SCHIP
Medicaid
Source: Jeanne Lambrew George Washington University Presentation, 10-31-06. Adapted from Georgetown Center for Children and Families and CRS. Based on children ever-enrolled over the course of a year.
Children’s Enrollment in Medicaid & SCHIP 1997-2005
Of 6.1 Million in SCHIP in 2005:
- 1.7 million were in Medicaid - 4.4 million were in separate programs
22.3 23.525.2
21.0
27.230.8
32.334.0
35
THE COMMONWEALTH
FUND
0%
5%
10%
15%
20%
25%
30%
1997 1998 1999 2000 2001 2002 2003 2004 2005
Rate of Low-Income Uninsured Children, 1997-2005
Note: Beginning in 2004, the NHIS changed its methodology for counting the uninsured. This results in the data for 2004 and later years not being directly comparable to the data for 1997 – 2003.
Source: J. Lambrew based on Georgetown Center for Children and Families, L. Dubay analysis of data from the National Health Interview Survey.
22.3%
14.9%
36
THE COMMONWEALTH
FUND
AR
MEALSC
NDAZ
LA DCNY
IDCAMDMS
DE KY IN NHSD MIGA
KS VT IA NCVAMOMNNMWY RICTNV
TX FLIL NJ UTOHNEWV
OKMTWA HI
MA TN
ORWI
PA
CO
AK
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Change in Rate of Uninsured Children by State
Note: No state experienced a statistically significant increase in their rate of uninsured children.
Source: Minnesota State Health Access Data Assistance Center, The State of Kids’ Coverage, August 9, 2006.
National Average Decline: – 20.5%
Percentage Decline From 1997-98 to 2003-04
37
THE COMMONWEALTH
FUND
SCHIP Reauthorization 2007: Policy Issues
• Opportunity to reassess health coverage priorities and approaches– Sustain with minimal change would require increase of $12 to $14
billion over 5 years to keep up + reauthorization– Revise or expand?
• Eligibility issues– Maintain focus on core, currently eligible children
• Restrict or retarget funds on low income children• Eliminate current “crowd out” provisions• Extend to all income eligible – legal immigrants, children of
state employees, Medicaid eligible– Expand eligibility
• Increase age to include young adults• Raise income threshold to higher level, with buy-in option• Extend to parents – family care
• Benefits and financing– State options to wrap-around employer coverage– Sicker and special needs children benefits– Align matching rates of Medicaid and SCHIP
38
THE COMMONWEALTH
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109th Congress Health Insurance Expansion Bills– Federal Support for Expansion
• Public program expansions– Medicare related
• Medicare for All with group insurance options• Medicare buy-in older adults• Eliminate 2 year waiting period for disabled in Medicare
– Universal coverage for kids• Up to age 21. Public expansion to 300%; tax credits and
buy-in options for higher income families
– Medicaid expansions: Various proposals• Expand to young adults age 23• Family Care: expand to parents of low income children
• Federal-State Partnership Approaches to Support Innovation
39
THE COMMONWEALTH
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109th Congress National Legislative Proposals to Facilitate State Health Insurance Innovations
• Baldwin-Price: Health Partnership through Creative Federalism– State proposals for coverage, quality and efficiency and
information technology. Statewide or multi-state– Commission to review
• Voinovich-Bingaman: Health Partnership Act– State grants for innovation, priority to coverage and access– Commission to establish performance measures and goals
and review proposals
• Allen: Small Business Health Plans Act– Federal grants for states to establish small business health
benefits program. Similar to federal employees benefit program
– Federal reinsurance for coverage new programs– National program for employers in states without program
40
THE COMMONWEALTH
FUND
Health Insurance Expansion Bills 109th Congress – Private Market Focus
• Employer mandates
• Individual market and small group markets
– Tax credit and tax deductibility approaches
– Small group association plans: override state regulations
41
THE COMMONWEALTH
FUND
What Are the Goals of More Universal Coverage?Insurance as Foundation to Improve System Performance
• Meaningful, affordable, and equitable access
• Broad risk pooling– Eliminate insurance market incentives that reward avoidance of
health risk or cost shifting
• Use insurance as foundation to facilitate system-wide - – Timely, appropriate and effective care – Enhanced primary, preventive and well-coordinated care– More effective chronic care
• Lower insurance administrative costs by simplification and more efficient coverage– Stable coverage with seamless transitions– Reduce marketing, underwriting and overhead costs– Simplification and coordination
• Use insurance expansions as a vehicle and foundation to achieve more integrated, high quality and efficient care
42
THE COMMONWEALTH
FUND
State Strategies to Expand Coverageto Provide a Foundation to Improve Access, Quality
and Cost Performance • Develop blueprints toward more universal coverage
• Coherent policies that maximize connection and minimize complexity
• Expand public programs and “connect” with private
• Provide financial assistance for affordability – premium assistance; “buy-in” provisions
• Assure benefit designs cover primary, preventive and essential care
• Pool risk and purchasing power, with multi-payer collaboration
• More efficient insurance arrangements and simplification
• Pool purchasing power
• Develop reinsurance or other financing strategies to make coverage more affordable, pool risk and stabilize group rates
• Shared responsibility: mandate that employers offer and/or individuals purchase coverage
THE COMMONWEALTH
FUND
43
THE COMMONWEALTH
FUND
Acknowledgements
Sara Collins
Assistant Vice President Future of Health Insurance Program
Karen Davis
President
Sabrina How
Research Associate
THE COMMONWEALTH
FUND
Anne Gauthier
Senior Policy Director, Commission of a High Performance Health System
For Commonwealth Fund Publications
Visit the Fund at: www.cmwf.org
44
THE COMMONWEALTH
FUND
The rich
CATEGORIES OF PEOPLE IN THE U.S. HEALTH INSURANCE SYSTEM
The poor
The near poor
The broad middle class
The Young
Working-age people
People age 65 and over
The 47 million or so
uninsured tend to be near poor
The federal-state Medicaid
program for certain of the
poor, the blind and the disabled
The employed and their families who are typically covered through their jobs, although many small employers do not provide coverage.
For the rich, “Disneyland” the sky-is-the limit policies without rationing of any sort (Boutique medicine)
Near poor children may be temporarily covered by Medicaid and S-Chip, although 7-8 million are still uninsured.
Persons over age 65, who are covered by the federal Medicare program, but not for drugs or long-term care. Often the elderly have private supplemental MediGap insurance
The very poor elderly are also covered by Medicaid
QUIMBIESSLIMBIES
Source: Professor Uwe Reinhardt, Princeton University
45
THE COMMONWEALTH
FUND
Making Coverage More AutomaticEmployer vs. Public Insurance
Source: Based on D. Remler, S. Glied “What Can the Take-Up of Other Programs Teach Us: Increasing Participation in Health Insurance Programs,” Am. J. of Public Health, January 2003.
Payroll deduction
85%-90% participation rates
Take a job
Decide to participate; choose plan
Employee Health Benefit Decision
Learn about programs
Obtain an application
Apply and prove eligibility
Choose plan
Periodic proofof eligibility
Make regular payments
by check or money order
40%-70% participation rates
Low Income Public ProgramApplicant Decision
Health Expenditures for Selected Type of Services, 2000-2015
Projected
TOTAL 2000 2005 2010 2015
Billions $1,358.5 $2,016.0 $2,879.4 $4,031.7
Percent GDP 13.8% 16.2% 18.0% 20.0%
BY TYPE OF SERVICE
Hospital care $417.0 $616.1 $882.4 $1,230.9
Physician & clinical services 288.6 429.9 610.7 849.8
Other professional services (dental, etc.)
138.2 201.3 292.6 411.5
Nursing home care 95.3 121.7 160.5 216.8
Home health care 30.6 48.9 72.3 103.7
Prescription drugs 120.8 203.5 299.2 446.2
Other medical products 49.5 56.3 69.1 83.1
Prog. admin. & net cost of private health insurance 81.2 142.4 210.6 289.8
Investment 94.0 133.8 191.3 268.9
Source: Smith et al., “National Health Spending In 2004: Recent Slowdown Led By Prescription Drug Spending,” Health Affairs (January/February 2006): 186-196; Smith et al., “Health Spending Projections Through 2015: Changes On The Horizon,” Health Affairs Web Exclusive (February 22, 2006): W61-73.
Growth in National Health Expenditures (NHE) Under Various Scenarios
Source: Based on Borger et al., “Health Spending Projections through 2015: Changes on the Horizon,” Health Affairs Web Exclusive, February 22, 2006.
NHE, in trillions of dollars
47
1.75
2.25
2.75
3.25
3.75
4.25
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Baseline NHEOne-time savings scenarioSlowing trend scenario
$2.016 trillion in 2005
Cumulative savings projections, 2007–2015:One-time savings 5%: $1.3 trillionSlowing trend 1%: $1.4 trillion $3.7 T
$3.8 T
$4.0 T