Presentation to Kentucky Association of Health Underwriters
A not-for-profit health and tax policyresearch organization Health Reform: What it means. What’s next? Grace-Marie Turner April 24, 2012 Kentucky Association of Health Underwriters /GalenInstitute www.galen.org
Americans’ views of Supreme Court decision • 25% think the law should be upheld in full • 38% would like the entire law thrown out • 29% would like the court to strike down the individual mandate • 39% support health care overhaul in generalSource: Washington Post-ABC News Poll, April 8, 2012, http://www.washingtonpost.com/wp-srv/politics/polls/postabcpoll_04082012.html.
Americans agreed on goals for health reform… • The U.S. needs health reform to: – make coverage more affordable – assure quality, and – expand access to insurance • Most people rate their own coverage as good or excellent • They want stability. Change is for others.www.galen.org
Do you think the health care reform plan that Congress passed recently will increase, decrease, or have no effect on each of the following: Taxes Federal Deficit Health Care Costs Insurance Premiums Health Care QualitySource: AM&A, Resurgent Republic 1st Anniversary Survey of Likely Voters, April 25-27, 2010
Early changes from the law • Medical Loss Ratio • Grandfathering rules • “Free” preventive care • Allowing “children” up to age 26 on parent‟s policies • No annual or lifetime limits on coverage • Pools for pre-existing condition policies • $250 for seniors with high drug costswww.galen.org
The health law’s main features • Expands coverage to 30 million uninsured • A new system of Exchanges to deliver subsidies • States required to expand Medicaid • Citizens required to purchase approved health insurance • Most employers required to offer coverage • Significant new federal regulation of the health sector (with 159 new regulatory agencies and programs) • Medicare cuts and changes Financed by • $575 billion in payment reductions to Medicare • $550 billion new taxes and penaltieswww.galen.org
A not-for-profit health and tax policyresearch organization /GalenInstitute www.galen.org
Studies show law fails to meet goals • Health costs and health spending increase • One-third of businesses may drop insurance • Young people worried about high cost of policies • Doctors concerned about Medicaid expansion and fraying the safety net • Seniors are concerned about access to care through Medicare and Medicare Advantage • Up to 25 million will remain uninsuredwww.galen.org
Higher Costs • Insurance rising 9% to $15,000/yr in 2011 • Foster: “False more so than true” that law will lower costs for taxpayers • Latest CBO cost estimate: $1.76 trillion/10 yrs • Gruber: Premiums up to 30% higher than without the lawCongressional Budget Office and the Joint Committee on Taxation, “An Analysis of Health Insurance Premiums Under the Patient Protection and AffordableCare Act,” November 30, 2009, www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf. Chief Medicare Actuary on Presidents health care claims: "I wouldsay false, more so than true,“ House Budget Committee, January 26, 2011, http://www.youtube.com/watch?v=XC9rhGWJA2w. “2011 Employer Health BenefitsSurvey,” Kaiser Family Foundation/Health Research & Educational Trust, September 27, 2011, http://www.kff.org/insurance/092311nr.cfm.
“If you like your health insurance…” • 51 to 80% of Americans will lose current coverage, according to Obama admin. estimates • CBO: Up to 20 million could lose job-based plans • McKinsey: Up to 80 million will be forced to change policies • Child-only policies will vanish in 17 states • 35 million more will move from job-based insurance to taxpayer-subsidized exchanges“Fact Sheet: Keeping the Health Plan You Have: The Affordable Care Act and „Grandfathered‟ Health Plans,” U.S. Department of Health and Human Services, HealthReform.gov,http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html."CBO and JCTs Estimates of the Effects of the Affordable Care Act on the Number of People Obtaining Employment-Based Health Insurance," Congressional Budget Office, March 2012,http://www.cbo.gov/publication/43082.Shubham Singhal, Jeris Stueland, and Drew Ungerman, “How US health care reform will affect employee benefits,” McKinsey Quarterly, June 2011,www.mckinseyquarterly.com/Health_Care/Strategy_Analysis/How_US_health_care_reform_will_affect_employee_benefits_2813.“Health Care Reform Law‟s Impact on Child-Only Health Insurance Policies,” Senate Committee on Health, Education, Labor and Pensions, August 2, 2011,http://www.help.senate.gov/imo/media/doc/Child-Only%20Health%20Insurance%20Report%20Aug%202,%202011.pdf.Douglas Holtz-Eakin and Cameron Smith "Labor Markets and Health Care Reform: New Results," American Action Forum, May 27, 2010,http://americanactionforum.org/sites/default/files/OHC_LabMktsHCR.pdf.www.galen.org
Independent Studies Obama administration actuary Rick Foster: • $120 billion in fines for companies and individuals • Government spending will increase by $311 billion • Many on Medicare will have trouble getting care CBO: The law will raise some family premiums by $2,100 in 2016 above what they would have been without the reform law Richard S. Foster, Chief Actuary, “Estimated Financial Effects of the Patient Protection and Affordable Care Act, as Amended,” U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services, Office of the Actuary, April 22, 2010, www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf. Congressional Budget Office and the Joint Committee on Taxation, “An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act,” November 30, 2009, www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf.www.galen.org
Widespread pushback Very real consequences • Killing jobs, especially decimating the insurance broker community • 40% of doctors plan to leave practice Resistance from states • Lawsuits to block individual mandate, Medicaid expansion • Balking at setting up exchanges or otherwise complying Impossible complexity • CLASS Act collapse • Enormous bureaucracy, benefit mandates, privacy issues • 12,000 pages of regulations — so farwww.galen.org
Push-back coming from • Doctors and patients Losing control over medical decisions • Small businesses and big employers New taxes, penalties, and mandates • States Higher costs for Medicaid • Consumers Higher costs for insurance and fewer choices • Seniors Cuts to Medicarewww.galen.org
Employers’ fears • Coverage mandates, impacting job creation • Benefit mandates that drive up costs • Businesses must learn “household” income of employees to avoid fines • Low-wage jobs vanishing • Impossible to comply with grandfathering rules One-third to half of employers consider dropping coverage altogether — McKinseywww.galen.org
Who said this? “You should never try to tell people what they ought to do because all of their circumstances are different. “But if you give them very good timely information, they are going to make their own decisions in ways, in general, that are going to be better for them and better for the system as a whole.” ― Ron Kirby, transportation planning coordinator for the Metropolitan Washington Council of GovernmentsSource: Ashley Halsey III and Ed O‟Keefe, “Earthquake illustrates colossal challenge of evacuating Washington, D.C.” The WashingtonPost, August 24, 2011.
Sources: AHIP Center for Policy and Research, U.S. Census Bureau.
Health care in 2012 • Legislation Challenges to the law: 1099, CLASS and IPAB • Regulation 12,000+ pages so far • Legal U.S. Supreme Court decision in late June • Political 2012 campaigns and electionswww.galen.org
Europeans going the other way • Consumerism • Value of private enterprise and competition • Doctor-patient relationship • Decentralized decision-makingwww.galen.org
Opportunities ahead • This is not settled policy • Major election before implementation • States will have a big say • This law will be changed, likely significantly, if not repealed outright The American people want private insurance, and they want to be in charge of choices. Freedom. Innovation. Access.www.galen.org
Why ObamaCare Is Wrong for America How does the health care law drive up costs? Is your doctor really in charge of your health care decisions? Are your Constitutional rights threatened? Discover the law’s impact on your life in a new book from four nationally recognized health policy experts Published by Broadside Books, an imprint of HarperCollins www.WrongForAmericaBook.comwww.galen.org
Grace-Marie Turner A not-for-profit health and tax policyresearch organization Galen Institute 703-299-8900 email@example.com twitter.com/GalenInstitute facebook.com/GalenInstitute Subscribe to our free email alerts at /GalenInstitute www.galen.org www.galen.org/subscribe