Exemptions will be granted for financialhardship, religious objections, American Indians, those without coverage for less than three months,undocumented immigrants, incarcerated individuals, those for whom the lowest cost plan optionexceeds 8% of an individual’s income, and those with incomes below the tax filing threshold
32% will face penalty or 6.1 million people….
Social Health InsuranceUS and Access Lynn A. Blewett, Ph.D. Professor, University of Minnesota Westlake Forum IIIHealthcare Reform in China and the US: Similarities, Differences and ChallengesEmory University, Atlanta, GA April 10-12, 2011 Funded by a grant from the Robert Wood Johnson Foundation
Overview of Presentation Definition of social insurance Examples of social insurance in the US Distribution of coverage by insurance type A few points on national health reform Projections of persistent rates of uninsurance Conclusions
Definition of Social Insurance A social insurance scheme is one in which the policy-holder is obliged or encouraged to insure by the intervention of a third party Social Health Insurance (SHI):
The costs of ill health are considered a public concern
Society as a whole suffers from the resulting loss of wages, loss of productivity and loss of time
Ill health is viewed as a social concern, not simply a personal problem; obtaining health insurance is mandatory, not a personal choice
Source: OECD Glossary of Statistical Terms, 2011
Examples of Social Insurance in the United States Unemployment insurance Social Security Medicare Health Insurance Coverage
Source: SHADAC-Enhanced CPS for 2009. Military Coverage considered ESI. Order of primary coverage assignment: Uninsured, Medicaid,Private Non-Group, ESI, Medicare.
Medicare: Program Design Title 18 Social Security Act - 1965 Part A - Entitlement/Compulsory Part B - Supplementary/Voluntary
Eligibility Age 65+ Disabled (after a 24-month waiting period)
Railroad Retirees End Stage Renal Disease (RSRD) Beneficiary or spouse paid into social security for 40 quarters or 10 years of work history
Key Facts: Medicare (2010) 2010 Expenditures: $509 Billion # Elderly and disabled: 49 million % of national health care spending: 23% % of federal budget: 12% Average cost per beneficiary: $8,344 For top 10% high cost beneficiaries: $48,211 (FFS)
Financing – 2010 HI: Hospital Insurance Trust Fund 1.45% payroll tax on employers/employees Deductibles (e.g. $1,100 per hospital stay) Coinsurance (e.g. $275 per day from days 61 to 90 of a hospital stay; $550 per day for days 91-150, all costs over 150 days) SMI: Supplemental Medical Insurance Premiums: $110.50 per month (now income tested ) Deductible ($155 year) Coinsurance (20%) General Fund Revenue ACA - increases the payroll tax for higher‐income taxpayers (more than $200,000/individual and $250,000/couple) from 1.45% to 2.35% in 2013
Projected Worker-to-Medicare Beneficiary Ratio
Employer-Sponsored Health Insurance (ESI) Primary source of coverage in US – 60% Voluntary offer and voluntary take up Tax advantages for employer and employee contributions Trend of dropping health care as costs go up The challenge: where do people get coverage if not through their employer? Individual Market Today? Probably not. No pooling, underwriting, and individual risk-rating Makes up about 4% of under-65 coverage
Source: SHADAC-Enhanced CPS for 2000 and 2009. Percentage is for any ESI and includes individuals with other sources of coverage.
No social contract or universal coverage commitment
Increasing Rates of Uninsurance 15 Millions of Uninsured, all ages 16.7% of Population Source: U.S. Census Bureau, Current Population Surveys (March), 2000-2009
Universal Coverage for the Poor 16 Medicaid Expansion 133% Premium Subsidy 400% Federal Poverty Level
Exemptions to the Individual Mandate Financial hardship Religious objections American Indians and Alaska Natives Incarcerated individuals Those for whom the lowest cost plan option exceeds 8% of income Those whose income is below the tax filing threshold And the undocumented: 12 million people
Estimate of Uninsured After Health Insurance Reform Penalty Source: Urban Institute Who Will be Uninsured After Health Insurance Reform? March 2011. Estimates using 2011 Population with 2014 eligibility for programs.
Conclusion US has adopted social health insurance for the elderly/disabled - Medicare
A welfare system for the poor
Tension between private health insurance industry and social compact Increasing costs of care, budget pressures at both state and national level Reform may sever the link between ESI and uninsured by expanding Medicaid and providing tax credits in exchanges – Making other affordable options available