May 15, 2013 Medicaid and Government Pricing Congress


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Grace-Marie Turner's May 15, 2013 presentation at the Medicaid and Government Pricing Congress.

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May 15, 2013 Medicaid and Government Pricing Congress

  1. 1. Health Reform:Where we are now.Impact on Pharma.Medicaid and Government Pricing CongressMay 15, 2013Grace-Marie TurnerGalen Institute
  2. 2. Americans agreed on goals for health reformThe U.S. needs health reform to:– make coverage more affordable– assure quality, and– expand access to insuranceMost people rate their own coverage asgood or excellentThey want stability. Change was
  3. 3. But many say the ACA changes too much40% view the law unfavorably35% of Americans now view theAffordable Care Act favorablyCost continues to be the biggestconcernwww.galen.orgKaiser Health Tracking Poll, April 2013
  4. 4. The Red Tape Tower
  5. 5. Source: Sarah Kliff, “Is ObamaCare too much work for the Obama administration?” The Washington Post, November 12, 2012, ACA State Exchange
  6. 6. NOTE: Don’t know/Refused answers not shown.SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted March 5-10, 2013)Majority Say They Don’t Understand HowACA Will Impact Them, Including Two-Thirdsof Uninsured and Low-IncomeDo you feel you have enough information about the health reform law to understand how it will impact youpersonally, or not?30%33%41%68%67%57%Household income less than $40,000Uninsured (under age 65)TotalYes, have enough information No, do not have enough information
  7. 7. Source: Avik Roy, “Fact-Checking the Obama Campaigns Defense of its $716 Billion Cut to Medicare,” Forbes: The Apothecary, August 16, 2012, health law in one graph
  8. 8. Source: “Health Reform Poses Biggest Challenges to Companies with the Most Part-Time and Low-Paid Employees,” Mercer LLC, August8, 2012, implementing workforce changesw Mercer study on what employers expect
  9. 9. Employers and health coverage1. Employers with <50 FTE EE’s have no3k/2k penalty2. But employers offering qualified andaffordable coverage may actually behurting their employeesExample
  10. 10. Generous Subsidies inExchangesExamples:A person earning $42,000 a year with a familyof 4 qualifies for $14,759 in new healthinsurance subsidiesA single person earning $20,600 qualifies for$5,156 in new health insurance subsidiesBut only if employer doesn’t offer coverage or ifit’s not “affordable” (ie costs >9.5% of income)
  11. 11. Cost of Insurance, Family of 4
  12. 12. Impact of new rating rulesJames T. O’Connor, Milliman, for America’s Health Insurance Plans. Comprehensive Assessment of ACA Factors That Will Affect Individual MarketPremiums in 2014. Accessed 4-26-13
  13. 13. How to qualify for subsidiesSource: Sen. John Cornyn, Facebook, March 22, 2013,
  14. 14. www.galen.orgMedicaid and the states
  15. 15. Health Insurance Coverage ofthe Nonelderly Population, 2011266.4 MillionSOURCE: KCMU/Urban Institute analysis of 2012 ASEC Supplement to the CPS.Private Non-group 5.7%
  16. 16. Source: Avalere State Reform Insights, Updated April 22, 2013*AR is proposing to use Medicaid funds to pay for premium assistance through exchanges, pending federal approval;TN has indicated interest in expansion
  17. 17. Key issues facing PharmaMedicaid expansionDrug rebates expanded to DualsSuccess of coordinated care for dualsSupply chain integrityAccountable Care OrganizationsDrug benefits in the new ExchangesGovernment’s ability to pay its
  18. 18. Source: Kaiser Family Foundation.
  19. 19. SOURCE: Kaiser Family Foundation analysis of the Bureau of Labor Statistics Consumer Expenditure Survey Interview and Expense Files, 2002-2009, “Health Care on a Budget, The Financial Burden of Health Spending by Medicare Households, An Updated Analysis of Health Care Spending as aShare of Total Household Spending,” June 2011.Health InsuranceSpendingPrescriptionDrug SpendingAverage Health Insurance and Prescription DrugSpending As a Share of Total Household Spendingby Medicare Households, 2002-2009
  20. 20. Part D: Many see it as a modelThe Congressional Budget Office said thatspending for the prescription drug benefitdeclined by nearly 40% compared to initialestimates of its 10-year costIt is saving seniors money as well. The averagemonthly drug premium is about $30, far belowthe $53 forecast originally.
  21. 21. Federal spending as a % GDP
  22. 22. www.galen.orgSome realities:
  23. 23. States have a big roleSeeking ways improve their marketsEnhanced competition and more choicesof affordable coverageMedicaid expansion or other state-basedoptions such as Florida Health ChoicePlusACA
  24. 24. What we know for sure• CHOICE: Americans value innovation, diversityand choice to accommodate 300 million people• VALUE IN HEALTH SPENDING: Break downpayment silos to realize the promise ofpersonalized medicine and achieve cost saving• FOCUS ON THE PATIENT: Doctors andpatients, not government, should make health caredecisions
  25. 25. A market-based solution“Defined contributions” for health coverageA system that puts doctors and patients in charge ofmedical decisionsSlowing spending while preserving choice and qualityRestructuring financing for a 21st century healthsector• Medicare• Medicaid• Private Insurance
  26. 26. www.galen.orgHealth insurance market
  27. 27. 2013 questionsWill Exchanges be ready by Oct 1?Will there be bi-partisan support for delay?Will people enroll after they see the cost?Will the number of uninsured be higher aspeople understand guaranteed issue?Will private exchanges fill a market need?
  28. 28. The future?The global move towardconsumerism is real, drivenby greater patient demandfor more control overdecisions.People will seek moreaffordable options outsidethe ACA’s centralizedcontrol.
  29. 29. Grace-Marie TurnerGalen to our free email alerts