Healthcare Reform Updates 2011

Healthcare Reform – Changing US Healthcare as We Know It
Jonathan Edelheit
CEO Medical Tourism Association
Editor-in-Chief of:
Healthcare Reform Magazine, Self Funding Magazine, Corporate Wellness Magazine, Voluntary Benefits Magazine and Global Benefits Magazine

End Results of Healthcare Reform on US Healthcare & Insurance Industry
Higher costs for Health Insurance
Longer Waiting Times due to more insured patients and doctor shortages
More US hospitals will pull out of Medicare
Launch of Creative and Innovative Programs to Reduce Costs

Misperceptions of the Healthcare Reform Bill
No Government/Public Option
Healthcare and Health Insurance Costs are not going down
No meaningful reform passed such as tort reform/medical malpractice
No meaningful dental benefits under healthcare reform

Healthcare Reform Positives
Waiving of Pre-existing Condition Clauses
Eliminating Annual and Life Time Limits
Expanding Dependent Coverage to 26
Equal Premium Levels for those who are sick or healthy
Healthcare Reform was the expansion of healthcare benefits in the US, but there is a HUGE cost to this $$$$

Statistics on Healthcare Reform from Different Organizations
19 Million ~ The number of people predicted to lose their employer plan (Lewin Group)
8.5 Million ~ The number of seniors and disabled people at risk of losing their Medicare Advantage Plan (Medicare Chief Actuary)
100 Million ~ The cost of Healthcare Reform mandates for Caterpillar, Inc in the first year alone (Caterpillar, Inc)
20% ~ Fraction of hospitals that would become unprofitable after Medicare spending cuts. (Medicare Chief Actuary)
Congressional Budget Office (CBO) estimated that 8 million to 9 million individuals, mostly lower-wage workers and people who work for smaller employers, could lose their employer-sponsored coverage as a result of the legislation.

Before Healthcare Reform was passed High End Estimate of Health Insurance Costs in 2020 per year was:
Individual Health Insurance - up to $13,763
Family Health Insurance up to $38,160
Healthcare Reform will increase health insurance costs, so these numbers may rise higher and faster.

What does Healthcare Reform do?

Does not create a public government plan. Still Private insurance industry.
Health Insurance Exchanges will be created where people can most likely go online and shop for insurance from multiple insurance carriers
Mandate that all Americans purchase health insurance or pay a fine
Fine Mandates start in 2014 of only $95. Starting in 2016 fine for not having health insurance $695 or 2.5 percent of income, whichever is greater,

By 2014, insurers may no longer charge individuals and small businesses higher premiums or deny coverage on the basis of pre-existing conditions.
Waiving Pre-existing Condition clauses and making insurance premiums the same for healthy/sick people will drive health insurance costs up dramatically.

This will significantly increase
health insurance costs in the U.S.

Big Drawback of How Pre-existing Waiver Reads in Healthcare Reform Law - Problem is people could not buy health insurance until they are sick – destroys health insurance underwriting which is the whole basis of insurance.
It doesn’t penalize people who wait on purpose
Recent example – have several bad car accidents because you are bad driver, and your car insurance rates won’t be higher, you will pay same as safe drivers. Safe drivers rates go up to cover bad drivers.

Adding more Insured People Could Cause Long Waiting Times
Healthcare Reform expected to insure 32 million more people (not necessarily comprehensively)
Doctor Shortage leading to longer waiting times
American Academy of Family Physicians predicted a shortfall of 40,000 primary care doctors. MA has mandated health insurance and patients have to wait.
In Massachusetts, after the passage of Romneycare, the wait to see a primary care physician increased from 33 days to 52 days.

Employer fines up to $2,000 if not provide insurance starting in 2014 who have more than 50 full time employees.
Employers may push full time employees to part time, hourly or 1099 to eliminate having to provide coverage.  Means Americans with no health insurance coverage, more uninsured or underinsured
3 to 1 rates – Seniors pay less, and Health Insurance Costs for Young People to significantly rise.

No Tort Reform – Medical Malpractice - Gallup Poll found that nine in 10 doctors admit having practiced defensive medicine at some time during their career – which increases the cost of healthcare in the US and no tort reform was passed
A new survey in the New England Journal of Medicine reports that 46 percent of doctors may give up their practice in the wake of this bill.
While that is probably exaggerated, many doctors will likely decide to reduce their patient loads or retire.

Jackson Memorial – Gallup Feb 2010 Defensive Medicine Poll
Physicians attribute 26% of overall healthcare costs to the practice of defensive medicine
Of physicians surveyed, 73% agreed that they had practiced some form of defensive medicine in the past 12 months.

Timeline – Important events
2011
“Class Act” – the new government long term care program starts. Individuals pay premiums for a minimum of five years to become eligible for daily living coverage
$2.5 billion in taxes and fees to drug makers starts (increases each year)
Health Plans develop and file new rates (states approve or disapprove of new rate filings)
HHS secretary approves or disapproves of rate increase requests from insurance carriers
HHS create uniform documents and standard definitions are developed
85% Minimum Loss Ratio for medical expenses established for large groups
80% Minimum Loss Ration for medical expense established for individual and small groups

2012
$2 annually for each individual covered whether fully insured, self funded, group or individual for comparative effectiveness research under a specified individual or group health insurance for plan years after September 2012

2013
Health Plans develop and file new rates (states approve or disapprove of new rate filings)
$2,500 limit on what can be contributed to employer-sponsored Flexible Spending Accounts,
HHS secretary approves or disapproves of rate increase requests from insurance carriers
Health Insurance Fee to fund Comparative Effectiveness is imposed
The threshold for the itemized deduction for unreimbursed medical expenses would be increased from 7.5% of AGI to 10% of AGI for regular tax purposes. The increase would be waived for individuals age

2014
$8 billion dollar insurance provider fee (tax on insurance companies)
Insurance Exchanges go into effect
All insurance must be Guarantee Issue with no pre-existing condition clauses
Rating Restrictions go into affect, limits the use of age as a rating factor (3:1 Ratio) Only can vary rates based on age, geographic location and tobacco use. Tobacco limited to 1.5 to 1 ratio)
Prohibits insurers from rescinding coverage because of illness
Individual Mandate Goes into Effect (- Fine) > $95, or 1 percent of income 2014, $325 or 2% 2015, 2016 >$ 695, or 2.5%,(maximum of $2,250 for family)
If Family Insurance costs $30,000, $2,500 a month. About $56,000 Avg Income. Census Bureau. Fine is $1,400, or $116 a month.
Employer Mandate Goes into effect over 50 employees, the first 30 FTEs are subtracted (Fine $2,000 per employee annually)

2018
Cadillac tax on high premium health insurance plans kicks in ($10,200 for individual, $27,500 for family, 40% tax (people 55 and older, will be allowed to have higher insurance premium before excise tax kicks in). Retirees and workers in high-risk professions like firefighting would have higher thresholds ($11,850 for singles, or $30,950 for families), pegged to inflation. By 2018 a majority of health insurance plans could qualify as a “Cadillac plan.”
The average Americans health insurance costs by 2018 will exceed the costs above, so the MAJORITY of Americans will be hit with an additional 40% tax on top of their expensive healthcare costs!

What’s the Future of Healthcare Like?
Health Insurance Costs already increased in 2010 and a big surge in health insurance premiums will occur in 2014 when most of the mandates kick in.
Younger and Healthier Americans insurance costs will increase to subsidize those who are older and/or sick.
Within the first three years of mandated pre-ex waivers in 2014 we may see “Adverse Selection” and insurance costs skyrocket.
Some Employers may “opt out” of health insurance and pay the $2,000 fine, and individuals opt out and pay their fine also.

Healthcare Reform’s Effect on Medical Tourism?
Healthcare Reform will have a very positive effect on medical tourism
HCR will raise healthcare costs making medical tourism more attractive
HCR initially had a negative effect on medical tourism, as most US insurance companies were moving forward with implementing it. After the law was enacted health insurance companies spent all their time fighting the law and protecting their livelihood and future.
US Insurance Companies/Employers finally COMFORTABLE with healthcare reform
They know it’s hear, they understand it, and they are in compliance
Employers/Insurance Companies are now finally comfortable with Medical Tourism so now re-examining medical tourism
Some are now issuing RFP’s and Implementing it.
Big insurers and employers moving forward
Dental insurers moving forward
Long term care policies can make payments that can be used overseas
2012 will be big year for US insurance companies and employers

Medical Tourism Association, Inc.
Jon@MedicalTourismAssociation.com
US 561-791-2000
Duplication of this presentation without approval is prohibited.
6/1/2011

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Healthcare Reform Updates 2011

by Medical Tourism Association on Jun 02, 2011

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Healthcare Reform Updates 2011 — Presentation Transcript