The document discusses major problems facing the US health care system and reforms under the Patient Protection and Affordable Care Act (ACA). It notes that prior to the ACA, nearly 50 million Americans were uninsured, costs were rising faster than other countries, and government programs like Medicare and Medicaid accounted for over half of all health care spending. The ACA aims to expand coverage, eliminate limits on plans, cover pre-existing conditions, and create health insurance marketplaces or exchanges. However, shortfalls remain like individuals and businesses still preferring lower costs. Recommendations include raising penalties in the individual mandate and making the exchanges function more like a real market.

1. US Health Care
What are the major problems facing the market
and how is Patient Protection and Affordable Care
Act trying to reform it?
Actuarial Practice Presentation: Team 9
(Aayush Rai, Tien Hoong Soh, Yiqing Chen, Lingzhi Zhan, Lim Wise, Yijing Feng)
1

2. Overview
2

3. Stakeholders
What is Health Insurance?
Provider
EmployerLife Sciences Organisation
Payer
Consumer
3

4. Not for Profit
Hospitals
58%
Government
Hospitals
21%
For Profit
Hospitals
21%
Who provides the Health Care?
Providers take care of individuals. They are reimbursed for their
services by private insurers and the government.
4
Source: Kaiser Report, 2011

5. Employer-
sponsored
55%
Private
10%
Medicare
15%
Medicaid
16%
Military Health
Insurance
4%
Where does the Insurance come from?
As per the US Census Bureau, 49.9 million residents, 16.3% of the
population, were uninsured in 2010.
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Source: US Census Bureau, 2011

6. Challenges
Pre Obamacare
6

7. Driver of inequality in the United States
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Source: OECD, Brookings Institute 2013
3.2
7.2
4.1
13.6
4.5
8.3
5.4
16.7
Aggregate health care spending (%GDP)
2000 2008
Finland South Korea USASingapore

8. Uninsured Americans (millions)
34.7 38.4
50.7
0
10
20
30
40
50
1990 2000 2009
Households are priced out of the market
8
Source: US Census Bureau, 2011

9. Defence
21%
Discretionary
17%
Other
Mandatory
13%
Net Interest
6%
Medicare &
Medicaid
23%
Social Security
22%
U.S budget 2012 (% Total budget)
Others
39%
Medicare &
Medicaid
31%
Social
Security
29%
Projected U.S budget 2024 (% Total budget)
Diminishing revenue raising capabilities
9
Source: Congressional Budget Office Projection, 2013

10. Reforms
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11. • What are Medicare and Medicaid?
• Law ties reimbursement and
readmission rates
• Tax reforms
Medicare
58%
Medicaid
31%
Others*
11%
2013 Federal costs on Health Care
Others*- Military Health Sys.; Children’s Health Ins.;
Veterans Health Admin.
Cost
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Source: Congressional Budget Office Projections, 2013

12. • End to limits on plans
• Coverage for pre-existing conditions
• Young Adult Coverage
• Free Preventive Services
• Create a new marketplace - Exchange
• Encourage employers to provide coverage
Access
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13. Shortfalls
13

14. Individuals and companies prefer to pay less
• Individual Mandate
• Employer Mandate
Competitive disadvantage for businesses
Penalties might be insufficient
2014 1.0% of income or $95 per person
2015 2.0% of income or $325 per person
2016 onwards 2.5% of income or $695 per person
and adjusted for inflation
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Source: US Internal Revenue Service (IRS), 2013

15. Recommendations
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16. Raise individual penalties
Make it a real market
• Health care supermarkets
• Federalisation of state-built exchanges
Voucher system
• Increase disposable income
• Instil discipline
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17. Conclusion
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18. • Enacted in 2010
• Achievements
• Shortfalls
• Improvements
570 580
635
696
725
787
819
854
943
570
571
617
652
675
732
748
771
845
500
550
600
650
700
750
800
850
900
950
1000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
MedicareSpending(in$Billions)
PPACA effect on Medicare Spending, 2010-2019
Projections without reform Projections with reform
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Source: L. Nemani, Medicare: An Insight, 2012

19. References
• Stakeholders: https://www.nfib.com/cribsheets/individual-mandate/
• Hospitals by ownership type: http://kff.org/other/state-indicator/hospitals-by-ownership/#table
• Insurance sponsorship: http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2012/Table8.pdf
• OECD Nations Healthcare Spending: http://www.oecd.org/statistics/datalab/health.htm
• Singapore Healthcare Spending: http://www.brookings.edu/blogs/up-front/posts/2013/05/06-singapore-health-care-system-haseltine
• Congressional Budget Office Data and Projections: http://www.cbo.gov/publication/42905
• Federal cost on health care: http://www.usfederalbudget.us/federal_budget_estimate_vs_actual_2013_XXbs1n_10#usgs302
• Penalties on individual mandate: https://www.nfib.com/cribsheets/individual-mandate/
• Income, Poverty, and Health Insurance Coverage 2012: http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2012/index.html
• Medicare: An Insight, Patient Protection Affordable Care Act (PPACA) Provisions, Inherent Challenges and Critical Success Factors:
http://www.corporatewellnessmagazine.com/article/medicare-an-insight-patient-protection-affordable-care-act-ppaca-provisions-inherent-
challenges-and-critical-success-factors.html
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20. Thank you! Q&A?
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