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Health Reform Bracketology Oct 18
 

Health Reform Bracketology Oct 18

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    Health Reform Bracketology Oct 18 Health Reform Bracketology Oct 18 Presentation Transcript

    • Health Reform Bracketology 2010 Congressional Election Madness Standings as of October 18, 2010 Overview As the 2010 election approaches, Leavitt Partners has engaged a collection of our policy experts and senior advisors to identify provisions within the recently passed health reform legislation that are subject to potential disruption. Health reform continues to be an important topic with voters, and our firm believes that certain scenarios regarding the future congressional makeup could have a material impact on the timing and nature of the implementation of PPACA and related health care reform efforts. HOUSE SENATE Republican Republican Democrat ? ? Democrat Republican Republican Democrat Current Public Polls Suggest* Democrat Republican Democrats Republicans Democrats Republicans Republican Democrat 179 43 213 48 6 46 Democrat Republican Toss Up Toss Up Republican House Senate Democrat Republicans Democrats Democrat *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Health Reform Bracketology 2010 Congressional Election Madness Standings as of October 18, 2010 Methodology and Focus Our analysis utilizes polling data from RealClearPolitics.com to project the likelihood of various election outcome scenarios in the House of Representatives and the Senate. Based upon these scenarios, publicly reported information, and other proprietary sources, Leavitt Partners has identified several PPACA provisions that could be targets for disruption. We have queried several health care experts for their opinion on a) the likelihood of disruption of these targets given certain election outcome scenarios, b) potential congressional tools/channels to facilitate the disruption, and c) potential outcomes. The data is aggregated and presented below. Election 2010 Scenarios House Senate House Senate House Senate Republicans Republicans Republicans Democrats Democrats Democrats Target Likelihood Target Likelihood Target Likelihood • Individual Mandate 85% • Individual Mandate 68% • Individual Mandate 28% • Employer Penalty: 78% • Employer Penalty: 48% • Employer Penalty: 28% • Premium Subsidies: 63% • Premium Subsidies: 43% • Premium Subsidies: 33% • Medicaid Expansion: 53% • Medicaid Expansion: 38% • Medicaid Expansion: 20% • Medical Loss Ratio: 75% • Medical Loss Ratio: 58% • Medical Loss Ratio: 30% • Medicare Funding Cuts: 85% • Medicare Funding Cuts: 68% • Medicare Funding Cuts: 53% © Leavitt Partners 2010
    • Individual Mandate Standings as of October 18, 2010 Current Public Polls Suggest* Republicans HOUSE SENATE Democrats Republicans Democrats Democrats Republicans LP Coaches Poll Prediction Alternative Scenario House Senate 68% Disruption Analysis (+8% Change From Last Week) Republicans Republicans Chance of Disruption if Republicans take the House and Likely modifications include Modify 55% Democrats retain the Senate. See below for type of disruption. raising the income threshold of 85% Stall 38% those exempt from the Chance of Repeal, Disruption Repeal requirement, or denying funding Repeal 8% 5% to the IRS to hire new staff to House Senate enforce the provision. If Democrats Democrats Modify, repealed, one discussed Stall, 43% Modify 53% substitute is an auto-enrollment Modify 78% 28% Stall process with an opt-out Stall 20% provision. Chance of Disruption Repeal 3% Commentary: Our coaches have increased their projection of the likelihood of disruption for the Individual Mandate for the second week in a row. The Individual Mandate is making its way through the court system and recent developments this week in Virginia indicate that judges are sensitive to the potential unconstitutionality of the provision (WSJ Article). Also, it is starting to appear that Tea Party candidates could make up a formidable voting bloc in the House and Senate. These candidates have been among the most outspoken critics of this provision in challenging its constitutionality and openly threatening disruption. *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Employer Penalty Standings as of October 18, 2010 Current Public Polls Suggest* Republicans HOUSE SENATE Democrats Republicans Democrats Democrats Republicans LP Coaches Poll Prediction Alternative Scenario House Senate 48% Disruption Analysis (+8% Change From Last Week) Republicans Republicans Chance of Disruption if Republicans take the House and We believe that any potential Modify 53% , 0% Democrats retain the Senate. See below for type of disruption. modifications will be focused on 78% Stall 33% additional exceptions for Chance of Repeal, Repeal Disruption 15% businesses or a reduction in the Repeal 3% penalties. House Senate Democrats Democrats Stall, 40% Modify, 58% Modify Modify 60% 28% Stall Stall 38% Chance of Disruption Repeal 3% Commentary: Our coaches determined that an increase in this provision was warranted. Employers are beginning to push back on the overall health reform bill citing cost concerns. HHS has demonstrated a willingness to adhere to business concerns by granting waivers and other concessions for other provisions. If trend follows suit, Republicans will look to defend businesses by focusing their efforts on mitigating or eliminating the potential penalties on employers. This type of rhetoric has been heightened as we come closer to the election and businesses continue to struggle in the anemic economy. *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Premium Subsidies Standings as of October 18, 2010 Current Public Polls Suggest* Republicans HOUSE SENATE Democrats Republicans Democrats Democrats Republicans LP Coaches Poll Prediction Alternative Scenario House Senate 43% Disruption Analysis (+3% Change From Last Week) Republicans Republicans Chance of Disruption if Republicans take the House and Potential compromises could Modify 80% , 0% Democrats retain the Senate. See below for type of disruption. involve lowering the amount of 63% Stall 18% subsidy to the target population Chance of Disruption 3% Repeal (below 400% of the Federal Repeal Stall, 23% Poverty Level), or changing the House Senate eligibility criteria to reduce the Democrats Democrats number of eligible individuals 88% Modify who qualify based upon Modify 33% Stall Modify, household income. Chance of Stall 10% 78% Disruption Repeal 2% Commentary: The probability of disruption has been slightly increased for this provision. Our coaches believe that the debt commission will provide political cover for Democrats or Republicans if they advocate for a decrease in entitlement spending. The debt commission will finalize their report to the President by the end of December and is expected to include a myriad of entitlement reform suggestions. *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Medicaid Expansion Standings as of October 18, 2010 Current Public Polls Suggest* Republicans HOUSE SENATE Democrats Republicans Democrats Democrats Republicans LP Coaches Poll Prediction Alternative Scenario House Senate 38% Disruption Analysis (+10% Change From Last Week) Republicans Republicans Chance of Disruption if Republicans take the House and Possible modifications could Modify 53% Democrats retain the Senate. See below for type of disruption. include offering Medicaid 53% Stall 40% eligible populations the option Chance of Disruption 8% Repeal of receiving a voucher for use in Repeal purchasing insurance through House Senate state exchanges. Modify, Democrats Democrats Stall, 48% 50% 65% Modify Modify 20% Stall Stall 10% Chance of Disruption Repeal 0% Commentary: State budgets continue to be impacted by the slow economic recovery. Republicans in Congress have requested that states send them information on the fiscal impact of PPACA’s mandatory Medicaid expansion. State budget solvency and the ensuing state lobbying could have an impact on expanding Medicaid. In addition to State fears regarding the expansion, providers are slowly conceding that the increase in patient volume may strain resources and capacity. One example of this was covered by the Washington Post last week. *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Medical Loss Ratio Standings as of October 18, 2010 Current Public Polls Suggest* Republicans HOUSE SENATE Democrats Republicans Democrats Democrats Republicans LP Coaches Poll Prediction Alternative Scenario House Senate 58% Disruption Analysis (-2% Change From Last Week) Republicans Republicans Chance of Disruption if Republicans take the House and Possible modifications could Modify 63% , 0% Democrats retain the Senate. See below for type of disruption. include the granting of waivers 75% Stall 18% to carriers, businesses, or states Chance of Repeal, Disruption Repeal that show evidence of market Repeal 20% 5% destabilization. House Senate Stall, 23% Democrats Democrats 75% Modify Modify 30% Stall Modify, Stall 25% Chance of 73% Disruption Repeal 0% Commentary: The Medical Loss Ratio continues to be front and center as we come closer to its effective date of January 1, 2011. Last week the NAIC sent a letter to Secretary Sebelius suggesting a phase-in of the MLR limits to prevent market destabilization. Maine, Iowa, and South Carolina have requested waivers, and it is expected that larger businesses, expatriate plans, and additional states will seek some redress from the forthcoming requirements. *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Medicare Funding Cuts Standings as of October 18, 2010 Current Public Polls Suggest* Republicans HOUSE SENATE Democrats Republicans Democrats Democrats Republicans LP Coaches Poll Prediction Alternative Scenario House Senate 68% Disruption Analysis (No Change From Last Week) Republicans Republicans Chance of Disruption if Republicans take the House and Early legislative action in the Modify 63% Democrats retain the Senate. See below for type of disruption. 112th congress could result in an 85% Stall 28% executive branch invitation to a Chance of Disruption 10% Repeal Repeal, ‘Budget Summit’, a forum for Repeal 10% negotiating a budget that both House Senate Congress and the President can Democrats Democrats tolerate. Such a summit would Stall, 28% 70% Modify be high stakes political theater Modify Modify, 53% Stall that could create “winners” or Chance of Stall 28% 63% “losers” out of the new Disruption Repeal 10% congress. Commentary: No significant market developments have transpired in the last week causing our coaches to change their predictions. *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Medicare Funding Cuts Standings as of October 18, 2010 80% 70% Medicare Funding Cuts Medical Loss Ratio Likelihood of Disruption 60% 50% Employer Penalty 40% Premium Subsidies 30% Medicaid Expansion 20% 10% 0% 10/4/2010 10/11/2010 10/18/2010 *Prediction based on analysis using data from www.RealClearPolitics.com, October 18 2010 © Leavitt Partners 2010
    • Salt Lake City Office Washington DC Office 299 South Main Street 1776 I Street, NW Suite #2400 9th Floor Salt Lake City, UT 84111 Washington, DC 20006 Phone: 801.538.5082 LeavittPartners.com