Federal Health Care Reform 2009: Affordable Health Care for All
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Federal Health Care Reform 2009: Affordable Health Care for All

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Sunee Mickle, representative of Blue Cross Blue Shield of Kansas, outlines how health care reform scenarios will affect students.

Sunee Mickle, representative of Blue Cross Blue Shield of Kansas, outlines how health care reform scenarios will affect students.

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  • Concerns: A new government-run plan, problematic insurance reforms in a voluntary market and a national "exchange."
  • Concerns: A new government-run plan, problematic insurance reforms in a voluntary market and a national "exchange."
  • Based on our review of available information, we estimate that the morbidity of the uninsured if given access to insurance would be essentially 85% of the currently insured. We note that this assumption is roughly consistent with assumptions that the CBO used in its evaluation of the available data4. Using premium, claims, and other available information we estimate that the morbidity of those insured through the individual market is roughly 70% of the morbidity of the entire universe of people insured through the individual, small group, and large group markets (including self-insured). This 70% factor is the result of the fact that people insured through the individual market, in most states, are medically underwritten5. Combining these two estimates, the uninsured will have morbidity that is roughly 20% greater than those currently covered in the Individual market.
  • Each of the major bills before Congress require individuals to purchase insurance coverage or face potential penalties. The bills generally also include requirements for large employers to purchase insurance or face a financial penalty. In general, the bills exempt the smallest employers from this requirement. In the case of the Senate Finance Committee bill, firms with fewer than 50 employees would be exempt from the requirement to provide coverage.
  • Oliver Wyman assumes many people will receive subsidies that will offset – either entirely or partially – the effect of these premium increases. Other new purchasers will be ineligible for subsidies. Estimates on insurance reforms, insurer taxes and minimum benefit levels reflect Senate Finance Committee provisions. Oliver Wyman estimated the impact of insurance reforms and minimum benefit levels. BCBSA estimated the individual and family premium impact of the insurer tax. Source of current average premium data: AHIP Individual Market Survey 2006-2007 for individuals and families adjusted to 2008-2009. These estimates are based on assumptions made across Cluster 4 states, which include: Alabama, Alaska, Arkansas, California, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Mississippi, Missouri, Montana, Nebraska, North Carolina, Ohio, Oklahoma, Tennessee, Texas, South Carolina, Wisconsin, Wyoming ( Source: Oliver Wyman, Insurance Reforms Must Include a Strong Individual Mandate and Other Key Provisions to Ensure Affordability, 2009)
  • PwC also examined the impact of the excise tax on the mandated plans expected to be offered under the state health insurance exchanges detailed in the Senate Finance Committee Bill.17 We estimate that in many metropolitan areas, which tend to have higher than average medical costs, the lowest option plan (Bronze Plan) would be considered a "Cadillac plan" as early as 2016. By 2016 at least one of the mandated plans will be considered a "Cadillac plan" and be subject to the 40 percent excise tax in 17 of 50 states. By 2019 at least one of the mandated plans will be considered a "Cadillac plan" and be subject to the 40 percent excise tax in 24 of 50 states.
  • Each of the bills is expected to make progress in improving the goals laid out by President Obama. The Congressional Budget Office has estimated that the Senate Finance bill and the House bill would significantly reduce the number of uninsured Americans in the coming years. If we do nothing, 54 million individuals would lack health insurance coverage by 2019 under current law; in contrast, under the Senate Finance bill the numbers of uninsured would be reduced by 29 million people and under the House bill 35 million more uninsured people would obtain coverage.
  • Overall, the Finance and House bills would make great strides toward covering the uninsured and reining in costs. The House bill would cover six million more individuals than the Finance bill, but would add $239 billion to the federal deficit over ten years while the Finance bill would reduce the deficit by $81 billion.

Federal Health Care Reform 2009: Affordable Health Care for All Federal Health Care Reform 2009: Affordable Health Care for All Presentation Transcript

  • Federal Health Care Reform 2009 Fort Hays State University Health Care: Get in the Game Affordable Quality Health Care for All An Independent Licensee of the Blue Cross and Blue Shield Association. Sunee N. Mickle Director, Government Relations November 3, 2009
  • Corporate Overview
    • Our Mission
      • To be the best at providing health insurance in Kansas
    Blue Cross and Blue Shield of Kansas
  • Corporate Information
    • Locally Owned and Operated
      • Based in Topeka with offices in Dodge City, Garden City, Hays, Hutchinson, Independence, Lawrence, Manhattan, Salina, Pittsburg, and Wichita
      • 1,466 employees in total
      • Service 103 of Kansas' 105 counties
      • 891,105 members
      • Provider network includes 98% of medical doctors and acute care hospitals
  • Corporate Information
    • Mutual Insurance Company
      • Owned by our policyholders; Not publicly traded
      • An independent licensee of the Blue Cross and Blue Shield Association (1 of 39 different Blue Plans)
      • Governed by a 16 member board of directors
        • 15 are non-employees
          • They represent individual and group policy
          • A few are policyholders who are also health care providers
  • Corporate Information
    • In 2008, Blue Cross and Blue Shield of
    • Kansas:
      • Processed 20,208,900 claims
      • Paid over $1.8 billion in claims
      • Paid more than $23 million in taxes
      • Administrative costs are approx. 8 cents/dollar
        • 92 cents of every premium dollar is used to pay members' claims
  • Federal Health Care Reform
    • Five different health care reform proposals have passed in different congressional committees
      • Senate Finance Committee
        • America's Health Future Act of 2009 (S.1796)
      • Senate HELP Committee
        • Affordable Health Choices Act (S.1679)
      • House Tri-Committee
        • America's Affordable Health Choices Act of 2009 (H.B.3962)
    What's Happening Now?
  • Source: The Washington Post - October 9, 2009
    • Support sustainable insurance reforms
      • GI, no health status/gender rating, coupled with a strong individual mandate and subsidies
    • Support state insurance marts (SIMs) rather than a national insurance exchange
    • Promote health care reform without the creation of a government-run plan
    BCBSA Health Care Reform Priorities
  • Concerns with Current Proposals
    • Creation of a government-run insurance plan
    • Weak individual mandate
    • Move to a 2:1 age rating vs. 5:1 age rating
    • New insurer taxes
    • Lack of malpractice reform
    • Failure to implement system-wide cost containment
  • Source: Oliver Wyman, Insurance Reforms Must Include a Strong Individual Mandate and Other Key Provisions to Ensure Affordability , October 14, 2009 Impact of the Uninsured on the Individual Market
  • Oliver Wyman, Source: Oliver Wyman, Insurance Reforms Must Include a Strong Individual Mandate and Other Key Provisions to Ensure Affordability , October 14, 2009
  • Age Rating
    • “5 to 1” age bands are critical
      • It ensures that young, healthy individuals purchase coverage
        • Young and healthy individuals provide cross-subsides that keep premiums affordable for everyone
    -20% $300 $500 60 year old 100% $200 $100 20 year old % Premium Increase Premiums w/2:1 Age Adjustment Premiums w/ 5:1 Age Adjustment
  • Impact of Federal Insurance Reforms Individuals Purchasing New Coverage Average Impact for Kansas — Year 5 of Reform Estimates Exclude Adjustments for Inflation Source of current average premium data: AHIP Individual Market Survey 2006-2007 for individuals and families adjusted to 2008-2009. These estimates are based on assumptions made across Cluster 4 states, which include: Alabama, Alaska, Arkansas, California, Delaware, Florida, Georgia, Illinois, Indiana, Kansas, Mississippi, Missouri, Montana, Nebraska, North Carolina, Ohio, Oklahoma, Tennessee, Texas, South Carolina, Wisconsin, Wyoming ( Source: Oliver Wyman, Insurance Reforms Must Include a Strong Individual Mandate and Other Key Provisions to Ensure Affordability, 2009) $9,497 $ 4,370 Premium Under Reform $3,866 $ 1,715 Total Added Costs $488 $122 3. New insurance taxes $563 $266 2. Required minimum benefit levels $2,815 $1,328
    • Proposed Reforms:
    • Weak Personal Responsibility Mandate
    $6,392 $2,972 Current Average Premium FAMILY INDIVIDUAL
  • Impact of 40% Insurer Fee Source: PricewaterhouseCoopers, Potential Impact of Health Reform on the Cost of Private Health Insurance Coverage, October 2009.
  • Trend in the Number of Uninsured, 2012–2020 Under Current Law and Senate Finance and House Tri-Committee Proposals Millions Note: The uninsured includes unauthorized immigrants. With unauthorized immigrants excluded from the calculation, nearly 94% and 97% of legal nonelderly residents are projected to have insurance under the Senate Finance and House proposal, respectively. Data: Estimates by The Congressional Budget Office.
  • Federal Proposals’ Impact on Insurance Coverage and Costs in 2019 Source: The Congressional Budget Office Preliminary Analysis of Specifications for the Senate Finance Chairman's Mark of the America's Healthy Future Act, October 7, 2009, http://www.cbo.gov/doc.cfm?index=10642. The Congressional Budget Office Analysis of HR 3200, The Affordable Health Choices Act, July 17, 2009, http://www.cbo.gov/ftpdocs/104xx/doc10464/hr3200.pdf $239 billion $1,042 trillion 30 million 9 million 35 million House of Representatives Tri-Committee -$81 billion Net impact on federal deficit, 2010-2019 $719 billion 25 million 11 million 29 million Senate Finance Committee Modified Chairman’s Mark Net cost of coverage expansion, 2010-2019 Covered in exchange, 2019 Additionally covered by Medicaid/CHIP, 2019 Formerly uninsured now covered, 2019
  • Questions & Answers