healthcare reform mdi rotary september, 2010. mount desert island hospital agenda the problem health...
TRANSCRIPT
Healthcare Reform
MDI RotarySeptember, 2010
Mount Desert Island Hospital
Agenda
The Problem
Health Reform Bill
Outstanding Issues / Challenges
Questions
Mount Desert Island Hospital
Health Reform
Overall problems – broadly recognized Highest spending per person among
industrialized nations, without comparable measurable higher outcomes
Unequal access creates gaps High employer costs weaken America in
today’s global economy Americans are increasingly angry about
high costs, and how they are distributed
Mount Desert Island Hospital
McKinsey International Report
Potential Savings (2003) Drugs - $66 billion Physician remuneration - $58 billion Nursing staffing and complexity - $50
billion Provider profits and taxes - $75 billion Administration costs (insurance only) -
$98 billion “Other” - $147 billion (includes
inefficient incentives)
Mount Desert Island Hospital
McKinsey International Report
Conclusion:
“ Most components of the US healthcare system are economically distorted . . . . No single factor is either the cause or the silver bullet for reform actions.”
Mount Desert Island Hospital
The Overall Challenges
Expand Access & Coverage
Reduce Costs/Spending
Improve Quality
Mount Desert Island Hospital
Expand Access & Coverage
Major focus of current reform Restructure the insurance market Expand government support for
lower income individuals and families beginning in 2014
Mandated coverage beginning in 2014
Mount Desert Island Hospital
Insurance Reforms Individuals/employers have opportunity to
purchase coverage through State Exchange starting in 2012 Require all insures to offer coverage that
meets essential benefits package including preventative coverage
Subsidies for low-income individuals (2014) on a sliding scale up to 400% FPL
Limits on out of pocket expenses State specific, includes national plan overseen
by Federal Office of Personnel Management Projected to cover 95% of legal residents
Mount Desert Island Hospital
Medicaid Expansions
Expand coverage to everyone at or below 133% of the Federal Poverty Level in 2014
Increased Federal funding
Current Maine Medicaid 100% FPL Childless Adults 200% FPL Children 200% FPL Parents of Children
Mount Desert Island Hospital
How Reform is Paid For
Elimination of subsidy to insurance companies for Medicare Advantage
Reduced Medicare reimbursement to hospitals (CAH’s excluded) Across the board cuts to payments
Reduced payment and penalties for complications
Reduce payment for readmissions
Mount Desert Island Hospital
How Reform is Paid For
Increased taxes Medicare tax on high incomes (2013) “Cadillac Plan” tax (2018) Assessments on other providers/insurers
Closing of the “Doughnut Hole” Geographic variation
$200 million per year lowest quartile states (2011 & 2012)
IOM study
Mount Desert Island Hospital
Insurance Reforms - 2010
Community rating (standard) pricing
Continued coverage up to age 26
Prohibit insurers from denying coverage for children based on pre-existing conditions
Ban on lifetime coverage maximums
Minimum medical loss ratio required
Mount Desert Island Hospital
Insurance Reforms - Ultimately
Ban on denying coverage to adults for pre-existing conditions
No cost sharing – preventative services Elimination of annual limits Limits on FSA’s and HSA’s Individual mandate to buy coverage
(2014) penalties phased in Individual penalty – $95 (2014) - $695 (2016) Family maximum $2,085 (2016) or 2.5%
household income
Mount Desert Island Hospital
Employer Provisions - Current
Current tax credit for small business Up to 50 FTE’s/avg. wages $50,000 Employer cont. at least 50% of cost Not available to sole prop./self-emp.
Maximum credit 35% for 10 or fewer FTE’s and avg. wages less than $25,000
Credit to withheld taxes for nonprofits Starting 2014 – 2 year transition 50%
credit
Mount Desert Island Hospital
Employer Provisions - Future
Current health plans grandfathered Employers of 50 FTE’s or more may be
required to pay an assessment for coverage Full time = 30 hours per week Seasonal employees with fewer than 120 days
excluded Assessment different if you offer
insurance or not – and if employees are subsidized by the exchange
Mount Desert Island Hospital
Employer Provisions - Future
All employers who offer insurance to provide vouchers for employees not taking insurance
Employers of 200 FTE’s or more must automatically enroll employees
Employers must provide coverage information on W-2 forms
Exclusions available for hardship ?
Mount Desert Island Hospital
Other Provisions
Various Quality Intiatives
Medicaid demonstration projects
Expansion of various “rural” provisions
Improved Medicaid reimbursement for Primary Care Physicians (2013)
$50 million for liability reform demonstration projects
Mount Desert Island Hospital
Outstanding Issues / Challenges Cost drivers not directly addressed Complexity of implementation Physician payment “fix” Adequacy of fines for not buying coverage Political will to implement payment cuts
and taxes