3 3-11 How We Got Here


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Slide show by Gordon Bonnyman and Michele Johnson for CTP Health & Justice Symposium at Vanderbilt University on March 3, 2011

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  • American taxpayers pay more to subsidize their health care system than citizens in ANY other country. The U.S provides far greater public subsidies to its health care industry than do countries that have “socialized medicine”.
  • With health care accounting for 17.3% of GDP and growing, the drag on employers and individuals continues to increase: The number of uninsured will continue to grow. The coverage of the uninsured will shrink. The competitive disadvantages of American industry will worsen.
  • This logjam was broken by a middle ground approach in MA Key insight: marry incremental with universal Build on the strengths of the existing system But fill in the weaknesses Three Legged Stool” Reformed insurance markets Subsidized insurance below 300% poverty Individual mandate Other features Very modest employer obligation ($300/year) Connector to promote insurance competition Six key facts are all you need to know: More than 300,000 newly insured – uninsurance rate below 4% - 60% decline 100,000 + rise in employer coverage – “crowd in” Exactly on budget projections from 2005 Non-group premiums down 50% relative to nation Group premiums unchanged 75% public approval “
  • Coverage impacts estimated by CBO are somewhat conservative relative to MA $143 billion over the 2010-2019 period We join the rest of the industrialized world.
  • Security One of the most fundamental sources of unfairness in our society is our broken non-group insurance system Can be denied insurance if ill Pre-existing conditions excluded from coverage Sick charged many multiples of healthy The ACA fixes this by ending discriminatory pricing in the non-group market and the denial of coverage or pre-existing conditions Stop denials of coverage Eliminate higher premiums based on health status or gender
  • Standardize plans Promote competition Provide coverage like members of Congress get What’s the Issue: Current regulation of insurance markets is run by a hodgepodge of state and federal rules. There is little standardization of the information that insurers must provide, making it difficult for consumers to understand exactly what is and is not covered and to compare other aspects of insurance plans. Non-competitive non-group insurance market reduces competitive pressure on insurers Difficult to comparison shop = little pressure to keep prices low Exchanges force non-group insurers to compete CBO: Prices fall by > 10% for comparable products Massachusetts: Prices in the Connector 50% lower than previous non-group prices What Health Reform Will Do: A new, regulated marketplace, sometimes referred to as an “exchange,” will be created to promote competition among insurers and to give consumers the opportunity to purchase the best plan at the best price. Every American will have the same kinds of choices of coverage that Congress has and eventually, members of Congress will purchase their coverage through the same places that the uninsured and small businesses do. Federal Employee’s Health Benefit Plan (Congress’s health care) works, i.e., they get their health insurance through an exchange. All insurers will be required to present health plan information in a clear, user-friendly format that allows consumers to understand plan terms and compare benefits and services across plans. Health plan information will be standardized, which will promote competition as consumers shop for the best plan. Standardardized info-similar to nutrition labels. They allow consumers to compare various nutritional aspects of the food product, like number of calories and percentage of daily value of calcium, etc., that help consumers make healthy choices.
  • Labor market suffers from “job lock” The lifeblood of the U.S. labor market is mobility Move to better job matches Start new businesses Individuals are unwilling to move if afraid of losing health insurance Since non-group market is broken, nowhere to turn ACA fixes this Millions are freed to more productive positions or to start a new business without fear of losing insurance Over the past decade, employer-sponsored insurance has eroded by 15% Nowhere for these individuals to turn The ACA would cause a slight reduction in employer-sponsored insurance – but a huge increase in non-group insurance Overall, private insurance coverage up by 15 million persons The ACA provides the safety net we need as employer-provided insurance erodes Offer coverage choices for all, regardless of place of work Create a safety net for job loss
  • Cap out-of-pocket costs for all Extend extra help to lower- and middle-income people
  • Subsidies up to 400% of poverty. Offer help to middle-income families Provide subsidies to buy insurance What’s the Issue: Between 1999-2009, the average annual premium for job-based coverage doubled. Insurance premiums are rising quickly, forcing people to drop their coverage or look for cheaper plans with smaller benefit packages. Currently, middle-income working families who don’t qualify for Medicare or Medicaid do not receive any assistance to purchase coverage. Communities of color are more likely to have low or moderate incomes. In 2008, about 80 percent of nonelderly blacks, Latinos, and American Indians, and Alaska Natives had incomes below 400 percent of poverty (the cutoff for premium subsidies), compared to 57 percent of whites. Millions of people go without coverage because they can’t afford it. Lower and middle income families receive tax credits that cap their insurance costs Families below the median income in the U.S. will no longer have to spend more than 9.5% of income on insurance What Health Reform Will Do: Subsidies will be provided on a sliding scale to lower- and middle-income working families so they can buy insurance.
  • Focus spending on care, not profits Give refunds to consumers if requirements not met What’s the Issue: A majority of states have no protections ensuring that consumers’ premium dollars are spent on care. Many insurance companies can spend 60 cents of every dollar or sometimes even less on actual care. Instead, the money goes to profits and advertising and other overhead costs. What Health Reform Will Do: Insurance companies will be required to spend at least a certain share of their premium dollars (80 or 85 percent, depending on the market) on medical care and quality improvements. If they fail to spend the required share on medical care and quality improvements, they will have to give consumers a refund accordingly. States and the U.S. Department of Health and Human Services (HHS) will review insurers’ requests to raise premiums and will bar insurers from selling in the exchange if they have a pattern of unreasonable rate hikes.
  • Stop unfair rescissions of coverage Require evidence of fraud or intentional misrepresentation in rescission cases What’s the Issue: Currently, insurers often skirt the law to revoke an individual’s insurance policy just when the enrollee files a claim and needs care. This suddenly eliminates coverage for crucial health services long after a person has been enrolled and paying the insurance company for coverage. people are paying into a system that may not be there for them when they actually get sick. Stops Free loaders Today healthy individuals can “free ride” on the system, remaining uninsured until they need hospital care By law, hospitals must provide such care Personal responsibility dictates that we all contribute to the system, not just join when we need it Individual responsibility requirement a cornerstone of most previous Republican plans Can’t reform the system unless everyone plays by the same rules What Health Reform Will Do: Prohibit insurance companies from unfairly revoking or rescinding coverage. Rescissions will only be permitted when there is fraud or intentional misrepresentation of relevant facts, not just if health insurance companies want to avoid paying for costly care. Consumers will get advance notice so that they can complain or appeal unfair rescissions.
  • Help small businesses afford coverage Increase buying power What’s the Issue: Small businesses pay higher premiums than larger businesses. On average, small businesses pay 18 percent more for the same policy. Coverage is unaffordable especially for small businesses with fewer than 10 employees. Less than half are able to offer coverage for their employees. More than half of the uninsured—26 million Americans—are small business owners, employees, or their dependents. Again, this hampers the entrepreneurial spirit. If people feel that they can’t provide themselves or their employees with health coverage, they may not venture out to start their own business. And people may be more reluctant to work for small businesses if they don’t provide coverage. What Health Reform Will Do: Provide small businesses with tax credits that cover up to 50 percent of the cost of health insurance for their employees. Small businesses will be able to purchase coverage through an exchange, where they will benefit from economies of scale created by purchasing coverage in large groups.
  • Improve data collection Strengthen and establish additional federal Office(s) of Minority Health Improve language access and cultural competence Improve workforce diversity What’s the Issue: People of color in the United States are more likely than whites to lack health insurance, to receive lower-quality care, and to experience worse health outcomes. Disparities in health exist across racial and ethnic minority groups, but there is limited coordination, documentation, and analysis of data that examine the nature of health disparities by race and ethnicity. In just a few decades, people of color will make up the majority of the population. Therefore, it will be increasingly important to make sure that health care is provided in a culturally and linguistically appropriate manner. What Health Reform Will Do: Set standards for collecting and managing data, including in state Medicaid and CHIP programs. Health reform will also require that the Department of Health and Human Services (HHS), in collaboration with other departments, analyzes health disparities data. These steps will help improve data collection so that health outcomes can be better studied across racial and ethnic groups. Retain and strengthen the authority of the federal Office of Minority Health and establish specific Offices of Minority Health within many HHS agencies. Require plans in the exchange to develop a uniform summary of benefits that is culturally and linguistically appropriate. Provide grants for training health care providers on culturally appropriate care and services. Create a permanent advisory committee to monitor the diversity of the health care workforce and provide recommendations to improve it. Increase funding and scholarships for disadvantaged students, providing special consideration to institutions with a track record of training individuals from minority communities.
  • Allow coverage through parents’ plan until age 26 Offer stable coverage for recent graduates What’s the Issue: Young adults that are transitioning from school to the job world are often left without health coverage. Most job-based policies require that the student be in school full-time in order to stay on their parents’ plan and most limit eligibility for coverage to age 21 or 23. Young adults are one of the largest segments of the uninsured—45 percent of young adults between the ages of 19 and 29 went without health insurance at some point during 2009. In addition, the current economic situation makes it even harder for those just out of school to find jobs, leaving them without a reliable source of coverage. Recent college grad trying to get a job in the current market- It’s incredibly difficult. And, due to the economy, many employers are only offering work on a contract basis, and contract employees generally aren’t offered insurance. If young adults are taken off of their parents’ coverage at 21, they will be without coverage unless they get a job that offers insurance, or they can afford to buy their own. So, if they get sick or hurt, they may have to go to the emergency room for care, which can cost thousands of dollars out of pocket. What Health Reform Will Do: All young adults without coverage through they own job will be able to stay on their parents’ or guardians’ plan until they reach the age of 26.
  • Expand Medicaid to millions of Americans Provide help for those affected by the recession What’s the Issue: In 43 states, adults without dependent children cannot enroll in Medicaid, even if they are penniless. Discuss the common misconception that Medicaid covers all low-income people. Explain that in fact, many low-income people currently cannot get coverage through Medicaid. What Health Reform Will Do: The national floor for Medicaid eligibility will be expanded to 133 percent of the federal poverty level, which is $24,352 for a family of three in 2010.
  • Eliminate the “doughnut hole” Provide free preventive care Extend life of trust fund What’s the Issue: The “doughnut hole” is a gap in Medicare Part D prescription drug coverage. It is currently $3,610 and is anticipated to grow to almost $6,000 by 2016. When seniors and people with disabilities are in the doughnut hole they pay 100 percent of the cost of their prescriptions out of their own pockets. Give a more thorough explanation of the doughnut hole to help people to better understand the implications of it. For example, you could say: Say your mother has several medications that she needs to take every day. They keep her blood pressure down and they help with her diabetes. Your mother pays 25 percent for the cost of these drugs until the total costs of the prescriptions reach a certain level. Then, she enters the doughnut hole, where she has to pay 100 percent of the cost of her drugs even though she is already paying premiums. Currently, she would have to pay $3,610 out of pocket before Medicare would cover her drug costs again. Preventive services in Medicare are subject to copayments of as much as 20 percent. Because of this expense, people are discouraged from getting the preventive care they need. Medicare’s trust fund has been projected to have insufficient funds to pay full benefits by as early as 2017. Medicare and Medicaid together are projected to grow from about 4 percent of gross domestic product in 2007 to 9 percent in 2030, due mostly to the same rising costs affecting everyone. What Health Reform Will Do: The doughnut hole will gradually be eliminated. Anyone who falls into the doughnut hole will receive a $250 rebate in 2010. Starting in 2011, they will receive a 50 percent discount on name-brand drugs in the doughnut hole and other discounts on generic drugs. These discounts will increase each year until the doughnut hole is completely eliminated by 2020. All cost-sharing for preventive care will be eliminated. Reform will extend the Medicare trust fund’s life by 12 years without any reductions to guaranteed benefits. Also, the lengthening of the life of the trust fund will help prevent benefits from being cut for the next decade due to insufficient funds. Reiterate here that Medicare recipients guaranteed benefits cannot be cut. Health reform will contain the rise of costs by investing in initiatives that make Medicare and Medicaid more efficient and sustainable, saving the government and taxpayers billions of dollars.
  • BREAKING: Repeal Would Raise Deficit $210B
  • You know what lack of insurance means in human terms. Scientist have told us, you die sooner and live sicker and are more likely to lose everything you have worked for due to one car accident of serious health event.
  • 3 3-11 How We Got Here

    1. 2. <ul><li>Charity is no substitute </li></ul><ul><li>for justice withheld. </li></ul>St. Augustine
    2. 3. U.S. Health System is Too Costly <ul><li>We spend twice as much as other advanced countries </li></ul><ul><li>Medical bills leading to personal bankruptcy </li></ul><ul><li>Employee insurance costs threaten global competitiveness </li></ul>
    3. 4. Health Care Spending per Capita in 2004 a a Source: The Commonwealth Fund, calculated from OECD Health Data 2006. a 2003 a Adjusted for Differences in Cost of Living
    4. 5. Americans Pay Twice: First, through our TAXES - <ul><li>Americans, including the uninsured , paid ~$1.2 TRILLION in 2009 in government subsidies to: </li></ul><ul><ul><li>insurance companies </li></ul></ul><ul><ul><li>HMOs </li></ul></ul><ul><ul><li>hospital chains </li></ul></ul><ul><ul><li>drug companies </li></ul></ul><ul><ul><li>the health industry. </li></ul></ul>
    5. 6. Public Spending on Health Care per Capita in 2004* Total Public spending Divided by Total National Population Adjusted for Differences in the cost of Living
    6. 7. Americans Pay Twice: A Second time, as PATIENTS - <ul><li>Unlike taxpayers in other advanced nations, Americans then have to pay a second time for their health care. Americans spent $1.3 TRILLION in 2009, on top of what they paid in taxes, for; </li></ul><ul><ul><li>care not covered by insurance </li></ul></ul><ul><ul><li>private insurance premiums </li></ul></ul><ul><ul><li>deductibles </li></ul></ul><ul><ul><li>co-payments </li></ul></ul><ul><ul><li>other direct payments. </li></ul></ul>
    7. 9. Health Care Expenditure per Capita by Source of Funding in 2004 a b a 2003 b 2002 (Out-of-Pocket) a a Source: The Commonwealth Fund, calculated from OECD Health Data 2006. Adjusted for Differences in Cost of Living
    8. 10. U.S. Health System is of Poor Quality <ul><li>Despite high quality of doctors and other health professionals, fragmentation of U.S. systems limits their ability to provide good care. </li></ul><ul><li>Up to 98,000 patient deaths annually due to system failures. (Institute of Medicine , 2000) </li></ul><ul><li>18,000 preventable deaths each year among those who are uninsured, due to the inability to access effective, timely care. (Institute of Medicine, 2003) </li></ul>
    9. 13. U.S. Health System is UNJUST <ul><li>47 million Americans, most in working families whose taxes subsidize the health care system , have no insurance. </li></ul><ul><li>At least that many more are under insured . They have insurance, but it doesn’t begin to cover their needs. </li></ul>
    10. 14. U.S. Health System is UNJUST <ul><li>The system perpetuates sharp racial disparities in health: </li></ul><ul><ul><li>An African-American newborn has twice the chance of a white baby of dying before her first birthday. </li></ul></ul><ul><ul><li>Across the age spectrum, minority Americans have less access to needed health care. </li></ul></ul><ul><ul><li>Minority Americans live sicker and die younger. </li></ul></ul>
    11. 15. U.S. Health System is UNJUST <ul><li>ALL Americans pay more </li></ul><ul><li>and get less than people </li></ul><ul><li>in other advanced nations. </li></ul>
    12. 16. The Status Quo is Unsustainable <ul><li>The Centers for Medicare and Medicaid Services (CMS) projects that the cost of Medicaid will double by 2019. </li></ul><ul><li>Health care inflation threatens the solvency of the Medicare trust funds. </li></ul><ul><li>Medical inflation, if not addressed, makes it all but impossible to reduce the national debt. </li></ul>
    13. 17. <ul><li>Every system is perfectly designed to achieve exactly the results it gets. </li></ul><ul><ul><ul><ul><ul><li> Dr. Donald Berwick </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li> Founder, Institute for </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Healthcare Improvement </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li> Administrator, Centers for Medicare & Medicaid Svcs. </li></ul></ul></ul></ul></ul>
    14. 18. A Century of Bipartisan Effort <ul><li>These problems are a century old, as are efforts to address them: </li></ul><ul><li>That any sane nation, having observed that you could provide for the supply of bread by giving bakers a pecuniary interest in baking for you, should go on to give a surgeon a pecuniary interest in cutting off your leg, is enough to make one despair of political humanity,” </li></ul><ul><li>George Bernard Shaw’s Preface to </li></ul><ul><li>“ Doctor’s Dilemma” (1906). </li></ul>
    15. 19. A Century of Bipartisan Effort
    16. 20. <ul><li>Lessons of the past century: </li></ul><ul><li>Real changes only occur when there is strong presidential leadership and control of Congress by the President’s party. </li></ul><ul><li>The parties’ rhetoric has been ideologically polarized, but they have often pursued similar policies in efforts to control cost and address gaps in coverage </li></ul>A Century of Bipartisan Effort
    17. 21. The Massachusetts Story
    18. 22. ACA is MA Plan + <ul><li>Same three legged stool – although subsidize up to 400% of poverty </li></ul><ul><li>But also adds financing </li></ul><ul><ul><li>Reductions in Medicare overpayments </li></ul></ul><ul><ul><li>Tax on wealthiest families </li></ul></ul><ul><li>And takes on cost control </li></ul><ul><ul><li>Five innovative strategies provide a key first step towards tackling the cost problem </li></ul></ul>
    19. 24. What Will ACA Do? Coverage <ul><li>32 million more Americans (CBO) </li></ul><ul><li>15,000 persons each year will avoid death due to lack of insurance </li></ul>
    20. 25. <ul><li>Coverage for Those with Pre-Existing Conditions </li></ul><ul><li>A Consumer-Friendly Marketplace </li></ul><ul><li>Coverage Regardless of Workplace </li></ul><ul><li>Limits on Out-of-Pocket Costs </li></ul><ul><li>Subsidies for Middle-Income Families </li></ul><ul><li>Accountability for Insurer Spending </li></ul><ul><li>Protections against Losing Coverage  </li></ul>Affordable Care Act- The Basics
    21. 26. <ul><li>Tax Credits for Small Businesses </li></ul><ul><li>Addresses Health Disparities </li></ul><ul><li>Coverage for Young Adults  </li></ul><ul><li>Coverage for Low-Income Families </li></ul><ul><li>Help for American Indians and Alaska Natives </li></ul><ul><li>Help for Seniors and People with Disabilities </li></ul><ul><li>Help for People Who Need Long-Term Services </li></ul><ul><li>Investment in Preventive Care  </li></ul>The basics. Part 2
    22. 27. Coverage for Those with Pre-Existing Conditions
    23. 28. A Consumer- Friendly Marketplace
    24. 29. Coverage Regardless Of Your Workplace
    25. 30. Limits on Out-of- Pocket Costs
    26. 31. Subsidies for Middle-Income Families
    27. 32. Accountability For Insurer Spending
    28. 33. Protection Against Losing Coverage
    29. 34. Tax Credits For Small Businesses
    30. 35. Addresses Health Disparities
    31. 36. Coverage For Young Adults
    32. 37. Coverage for Low-Income Families
    33. 38. Help for Seniors and People with Disabilities
    34. 39. Repeal Undoes it All <ul><li>Poorer health, more deaths </li></ul><ul><li>Unfair, expensive insurance market that leads to economic instability and medical bankruptcy </li></ul><ul><li>A less efficient job market where individuals lack the freedom to change jobs </li></ul><ul><li>Continued free-riding by those who pass billions of dollars in care costs onto the insured </li></ul><ul><li>A massive decline in private insurance coverage </li></ul><ul><li>Huge and unsustainable increases in budget deficits reaching the trillions of dollars over coming decades </li></ul>
    35. 40. This is our best hope for our community <ul><li>There is no proposal now on the table that covers even 10% as many persons as ACA </li></ul>
    36. 41. <ul><li>For more information : </li></ul><ul><li>On America’s health care system and how it measures up: </li></ul><ul><ul><li>www.commonwealthfund.org </li></ul></ul><ul><ul><li>www.kff.org </li></ul></ul><ul><li>- Atul Gawande, “ The Hot Spotters:Can we lower medical costs by giving the neediest patients better care? The New Yorker, 1-24-11 http://www.newyorker.com/reporting/2011/01/24/110124fa_fact_gawande?currentPage=all </li></ul><ul><li>Talk to the public about health reform, look to the Herndon Alliance to learn which messages work and don’t work: </li></ul><ul><li>http://herndonalliance.org/table/resources/ </li></ul>
    37. 42. <ul><li>&quot;For me, an area of moral clarity is: you're in front of someone who's suffering and you have the tools at your disposal to alleviate that suffering or even ehttp://www.facebook.com/tnjustice?v=box_3&ref=nfradicate it, and you act. &quot; </li></ul><ul><li>-Paul Farmer, founder of Partners in Health and 2009 recipient of the Dietrich Bonheoffer award. </li></ul>
    38. 43. Gordon Bonnyman [email_address] Michele Johnson [email_address] www.tnjustice.org 615-255-0331 http://www.facebook.com/tnjustice?v=box_3&ref=nf