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- 1. A Primer on Our US Health System Sam Robinson National Director, US Health Plan Industry Microsoft Corporation
- 2. The Caveats • This is not a political discussion, debate or ARGUMENT… • You may get upset in the next hour… if you do not…you are not listening • I will not be taking questions on personal health benefits or coverage… • So why are we here… to increase our collective health IQ to inform this ongoing critical discussion
- 3. “Compulsory health insurance is . . . Un- American, unsafe, uneconomic, unscientific, unfair, unscrupulous legislation supported by paid professional philanthropists, busybody social workers, misguided clergymen, and hysterical women.” Brooklyn physician in 1919 symposium on compulsory health insurance SOURCE: Michael A. Morrisey, Health Insurance, Second Edition
- 4. A short history of health insurance in the US Civil War begins (1861) Sickness Funds Established (186?) First prepaid group practices (MN – 1905) Workers Compensation Insurance (1910-1915) Compulsory state sponsored plans proposed (1910-1916) 1860s – 1900s Great Depression Roos-Loos Prepaid Group practice (1929) Baylor Plan Established (1930) Sacramento Hospital Services Plan (1933) Kaiser Foundation Health (1933) Limited commercial entry (1934) California Physicians’ Service (1939) AHA Blue Cross Commission (1946) 1929-1939 Health insurance coverage at 9% of population US enters WWII (1941) WW II ends with health insurance coverage at 22.6% of population (1945) Taft-Hartley Act defined health insurance as condition of employment (1947) Employer-sponsored health insurance exempted from federal income tax (1954) Commercial insurance enroll more members than Blue Cross and Blue Shield Associations (1950s) 1940s & 50s Blue Cross and Blue Shield plans switch from Community to experience rating Blue Cross and Blues Shield split from AHA and form Association(1960) Medicare (Part A & B) & Medicaid Established (1964-1965) ERISA passes launches self-insured plans (1974) Increase in insurance mandates (1974+) Health insurance coverage at 82.9% of population (1975) 1960s & 70s Prospective Payment (1983) Rise in Managed Care enrollment (HMO/POO/POS) (1980s) SOBRA Medicaid Expansion (1988-1990) CHIP (1997) Balanced Budget Act establishes Medicare Part C Medicare Advantage (1997) 1980’s – 90’s Consumer Directed Health Plans HDHP with HSAs established (2003) Medicare Part D established (2006) Affordable Care Act (ACA) passed (2010) ACA Tax penalty eliminated (2017) 2000s SOURCE: Michael A. Morrisey, Health Insurance, Second Edition
- 5. US public healthcare expenditures exceed many OECD country's total healthcare expenditures 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Private and Government and compulsory health insurance schemes, per capita expenditure, US$ purchasing power parities (current prices, current PPPs) Government and compulsory health insurance expenditures Private Expeditures US Public Expenditures Source: Organisation for Economic Co-operation and Development (2015), "OECD Health Data", OECD Health Statistics (database). (Accessed on 9 May 2017).
- 6. 70% of lifetime healthcare spending is dictated by social determinants
- 7. Who Pays? • Government sources (44%) • Medicare - Federal • Medicaid – State and Federal • Private (41%) • Employer based • Private individual coverage • Out of Pocket (15%) • You (deductible, premium share, co-pays, over the counter, etc.) 25% 19%41% 15% 2012 Expenditures by Funding Source (2.2 trillion) Medicare Medicaid Private Health Insurance* Out of Pocket Source: CMS 2012 Summary Report on Healthcare Expenditures
- 8. Medicaid (& CHIP) AID to the Poor • Insures 1 in 5 Americans (70M+) • Mean and income tested • State and Federal Partnership • Covers infants and children, disabled, elderly and needy adults • Expanded as part of the ACA to 132% of FPL (12K per individual) in 32 states • 60% of insured are enrolled in private managed care organizations
- 9. Medicare CARE for the elderly • 59M+ Members • No means or income test • Covers over 65 and disabled incl. ESRD & ALS • Part A (facility), Part B (professional), Part C (Medicare Advantage) & Part D (prescriptions) • Accounts for over 20% of national expenditures • 33% insured are enrolled in private managed care organizations (2% in CO)
- 10. Medicare Changing Demographics • 24% of enrollees 80+ accounted for 33% of spending in 2011 • Peak per capita spending in 2011 occurred at: • 83 for physician and outpatient services • 89 for inpatient services • 96 for home health • 98 for skilled nursing facilities • 104 for hospice services • Spending is expected to grow from 2016’s 3.2% to 4.2% of GDP by 2027 (with ACA) • Spending growth of Part D is outpacing all other Medicare benefits • ACA helped keep spending growth to 1.4% from 2010-2015 and helped extend Medicare Hospital Insurance trust fund solvency to its current 2029 estimate SOURCE: Kaiser Family Foundation
- 11. Consumer healthcare costs is unsustainable reaching 33.9% of income in 2015 and rising 33.9% in 2015
- 12. Market success drivers Consumers • Minimize spend • Access quality and convenient care & wellness Providers • Maximize profit • Maintain service viability • Comply with regulations Insurance • Maximize Profit • Comply with regulations Pharma • Maximize Profit • Comply with regulations
- 13. Achieving market success Consumers • Buy insurance • Stay healthy Providers • Maximize payor mix • Add high dollar services • Minimize low dollar services • Maximize throughput • Grow or acquire volume • Add vertical business • Raise prices Insurance • Reduce ALR & MLR • Recruit, retain or create healthy members • Reduce risk • Add vertical business • Raise prices Pharma • Maintain and create new drug patents • Increase demand • Grow or acquire portfolio • Raise prices
- 14. Where do we go from here Payment reform • ACA • Risk Shift • ACOs • Payment Bundles • Demonstrations • Fraud, Waste and Abuse (21% to 47%) • Price Controls • Drug Pricing and Transparancy( MD, NY, NV, OH, MN,CA, VT) • Other mechanisms Universal coverage
- 15. Affordable Care Act Expanded coverage Established regulated and accessible individual insurance market (HIX) Reduced/Re-aligned Medicare payments Established guaranteed issue Established individual mandate Established structure quality of care and health delivery changes Provided minimum benefit standards
- 16. Selected preventive services covered without cost sharing Cancer Chronic Conditions Immunizations Health Promotion Pregnancy- Related Reproductive Health • Breast cancer - Mammography (women 40+*) - Genetic (BRCA) screening and counseling (women at high risk) - Preventive medication counseling (women at high risk) • Cervical cancer - Pap testing (risk assessment for adolescents; women 18+, sexually active with cervix) - High‐risk HPV DNA testing♀ (women 30+ with normal pap results) • Colorectal cancer - One of following: fecal occult blood testing, colonoscopy, sigmoidoscopy (adults 50‐75) Cardiovascular health - Hypertension screening (risk assessment in infants, measurement children 3+; adults 18+) - Lipid disorders screenings (children risk assessment 2+: men 35+; women 45+; younger adults at high risk) - Aspirin (men 45‐79; women 55‐ 79) • Obesity - Screening (children 6+, all adults) - Counseling and behavioral interventions (obese children, adults) - Body mass index (BMI) (children 2+) • Type 2 Diabetes screening (adults w/ elevated blood pressure) • Depression screening (adults and adolescents, when follow up supports available) • Osteoporosis screening (all women 65+, women 60+ at high risk) • DTaP (children 15‐18 months, 4‐6 years) • Haemophilus influenzae type b (children 12‐18 months) • Hepatitis A ( children 12‐23 months, 2‐18 years w/risk factors; adults 19+ w/ risk factors) • Hepatitis B (children newborn‐18 months, 7‐18 years; adults 19+ w/ risk factors) • HPV (women 11‐26) • Inactivated Poliovirus (children 6‐18 months, 4 years+) • Influenza (yearly) (children 6+ months and adults) • Meningococcal (children 11‐12 , 2‐18 w/risk factors; adults 19+ w/ risk factors) • MMR (children 1‐18 years; adults 19‐49; 50+ w/risk factors) • Pneumococcal (children 12‐18 months, 2 years+ w/risk factors; adults 19‐64 w/risk factors) • Td booster, Tdap (children 11‐18 years; adults 19‐64) • Varicella (children 12‐18 months, 2 years+ w/risk factors; adults 19+) • Rotavirus (children 2‐8 months) • Zoster (adults 60+) • History and physical exams (children newborn‐adolescents 21 years) • Measurements: Length/height, weight, head circumference, weight for length (children newborn+) • Vision and hearing screenings/assessment (children newborn+) • Metabolic/hemoglobin, phenylketonuria, sickle cell, congenital hypothyroidism screenings (newborn) • Gonorrhea prophylaxis (newborn) • Anemia screening, supplements (children 6 months+) • Lead screening (children risk assessment and/or test 6 mo.‐ 6 years) • Tuberculin screening (children risk assessment 1 month+) • Oral health – risk assessment, referral to dental home, (children 6 months ‐ 6 years) • Developmental screenings and surveillance (children newborn‐adolescence) • Alcohol misuse screening and counseling (risk assessment adolescents 11+; all adults) • Tobacco counseling and cessation interventions (all adults) • Intensive healthy diet counseling (adults w/high cholesterol, CVD risk factors, diet‐related chronic disease) • Interpersonal and domestic violence screening, counseling♀ (women) • Well‐woman visits♀ (women 18‐64) • Prenatal visit • Alcohol misuse screening and counseling • Tobacco counseling and cessation interventions • Rh incompatibility screening • Gestational diabetes screenings♀ - 24‐28 weeks gestation - First prenatal visit (women at high risk for diabetes) • Screenings for pregnant women - Hepatitis B - Chlamydia (<24, high risk) - Gonorrhea - Syphilis - Bacteriurea • Folic acid supplements (women w/ reproductive capacity) • Iron deficiency anemia screening • Breastfeeding supports - Counseling - Consultations with trained provider♀ - Equipment rental♀ • STI and HIV counseling (sexually‐active adolescents, adults at high risk; all sexuallyactive women♀) • Screenings - Chlamydia (sexually active women <24 years old, older women at high risk) - Gonorrhea (sexually active women at high risk) - Syphilis (adults at high risk) - HIV (adolescents and adults at high risk; all sexually active women♀) - STIs (risk assessment for adolescents) • Contraception (all women w/ reproductive capacity) ♀ *** - All FDA‐approved contraceptive methods as prescribed - Sterilization procedures - Patient education and counseling Notes: Age ranges are meant to encompass the broadest range possible. Each service may only be covered for certain age groups or based on risk factors. For specific details on recommendations, please consult the websites listed below. *The ACA defines the recommendations of the USPSTF regarding breast cancer services to “the most current other than those issued in or around November 2009.” Thus, coverage for mammography is guided by the 2002 USPSTF guideline. ** Services in this column apply to all pregnant or lactating women, unless otherwise specified. ***Certain religious employers exempt from this requirement. ♀ Recommendation from HRSA Women’s Preventive Services. Coverage without cost sharing in “non‐grandfathered” plans begins August 1, 2012. Coverage without cost sharing for all other services went into effect Sep. 23, 2010. Sources: U.S. DHHS, “Recommended Preventive Services.” Available at http://www.healthcare.gov/center/regulations/prevention/recommendations.html . More information about each of the items in this table, including details on periodicity, age, risk factors, and specific tests and procedures are availableat the following websites: USPSTF: http://www.uspreventiveservicestaskforce.org/recommendations.htm; Bright Futures: http://brightfutures.aap.org/pdfs/AAP%20Bright%20Futures%20Periodicity%20Sched%20101107.pdf: ACIP: http://www.cdc.gov/vaccines/pubs/ACIP‐list.htm#comp; http://www.cdc.gov/vaccines/recs/schedules/downloads/child/0‐18yrs‐11x17‐fold‐pr.pdf; HRSA Women’s Preventive Services: http://www.hrsa.gov/womensguidelines/ SOURCE: Kaiser Family Foundation, Preventative Services Covered by Private Health Plans under the Affordable Care Act
- 17. Trump Administration ACA Reforms • Multiple repeal efforts failed (AHCA, budget, etc.) • Reduced HiX enrollment period • Cut promotion funding for HiX • Took away mandatory enrollment penalty (Jan 1, 2019) • Removed cost sharing subsidies • Expanded short-term plan access • RESULT: • 54% favorable view • Increased enrollment • Increased premiums • Decreased carrier choice (Ten states will have only one carrier in each county in 2018) • Concerns about affordability and uninsured raised by CBO and others
- 18. 53% favor national health plan to increase access and fair financing but most fear increased taxes and decreased choice
- 19. Medicare Extra For All • All Americans would be eligible • Would encompass Medicare, Medicaid and other federal programs over time • Voluntary enrollment for other groups • Benefits would include free preventive care, free treatment for chronic disease, free generic drugs and access to long-term care services • Income based premiums and cost sharing • Maintains MediGap and Medicare Advantage structures in new forms • Establish national drug and services price list 19Source: https://www.americanprogress.org/issues/healthcare/reports/2018/02/22/447095/medicare-extra-for-all/
- 20. Be Informed • Talk about our health system • FOLLOW THE MONEY • Know the source • Vote health as an issue • Use independent resources • Kaiser Family Foundation • http://www.kff.org • Medicare Extra for All • https://www.americanprogress.org/issues/healthcare/report s/2018/02/22/447095/medicare-extra-for-all/ • Commonwealth Fund • http://www.commonwealthfund.org • Commercial Healthcare News • https://www.fiercehealthcare.com/
Editor's Notes
- US Swiss Norway Luxembourg Public 4672 4711 5598 6520 Private 4779 2223 969 1245 Total 9451 6934 6567 7765
- Medicaid is the nation’s public health insurance program for people with low income. The Medicaid program covers more than 70 million Americans, or 1 in 5, including many with complex and costly needs for care. The vast majority of Medicaid enrollees lack access to other affordable health insurance. Medicaid covers a broad array of health services and limits enrollee out-of-pocket costs. The program is also the principal source of long-term care coverage for Americans. As the nation’s single largest insurer, Medicaid provides significant financing for hospitals, community health centers, physicians, and nursing homes, and jobs in the health care sector. The Medicaid program finances over 16% of all personal health care spending in the U.S. Medicaid and the Children’s Health Insurance Program (CHIP) currently cover over 74 million low-income Americans, who fall into four main groups: infants and children; pregnant women, parents, and other nonelderly adults; individuals of all ages with disabilities; and very low-income seniors, most of whom are also covered by Medicare. Three-quarters of nonelderly Medicaid enrollees are in working families. Children make up about half of all Medicaid enrollees, nonelderly adults make up one-quarter, and seniors and people with disabilities make up one-quarter. Medicaid covers many but not all poor Americans (Figure 1). It covers nearly half of all births in the median state, 40% of all children, and 75% of poor children. Reflecting more restrictive state eligibility rules for adults, Medicaid covers 40% of poor nonelderly adults. Medicaid covers 60% of children with disabilities and 30% of nonelderly adults with disabilities, including individuals with severe physical disabilities, developmental disabilities such as autism and traumatic brain injury, serious mental illness, Alzheimer’s disease, and other chronic conditions. States can opt to provide Medicaid for children with significant disabilities in higher-income families to fill gaps in private health insurance and limit out-of-pocket burden. Medicaid also assists 1 in 5 Medicare beneficiaries with their Medicare premiums and cost-sharing and provides many of them with benefits not covered by Medicare, especially long-term care, dental care, and vision care. FPL = 12, 060 individual to 41, 320 for family of 8
- Medicare is the federal health insurance program created in 1965 for people ages 65 and over, regardless of income, medical history, or health status. The program was expanded in 1972 to cover people under age 65 with permanent disabilities. Today, Medicare plays a key role in providing health and financial security to 59 million older people and younger people with disabilities. The program helps to pay for many medical care services, including hospitalizations, physician visits, and prescription drugs, along with post-acute care, skilled nursing facility care, home health care, hospice care, and preventive services. Medicare spending accounted for 15 percent of total federal spending in 2016 and 20 percent of total national health spending in 2015. Most people ages 65 and over are entitled to Medicare Part A if they or their spouse are eligible for Social Security payments and have paid payroll taxes for 10 or more years. People under age 65 who receive Social Security Disability Insurance (SSDI) payments generally become eligible for Medicare after a two-year waiting period, while those diagnosed with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS) become eligible for Medicare with no waiting period.
- Possible solutions are managed care, defined benefit to premium subsidy; increase eligibility age; increase premiums based on income Trump March 2018 memo lists priorities of 5:1 for age
- Expand insurance coverage through public expansion (Medicaid) and subsidization combined with individual mandates Create health insurance exchanges for purchase of individual policies with essential benefits Reduce Medicare payments and form ACOs, close donut hole 100% to 25% Improve quality through pilot programs on malpractice, P4P, payment reform, wellness, Primary Care training Act was signed on March 23, 2010 By the numbers: 90 provisions with 83 in effect today 32 million more Americans covered * 938 billion offset by 32 billion in savings** 124 billion in deficit reduction** *CBO Estimates through 2019 **CBO estimates over 10 years
- Silver increase 7-38% csr – KFF CO 2.6 – 14% Trump memo leaked in March 2018 list three priorities 1) allow 5:1 age in premium setting 2) extend short term plan eligibility and duration 3) raise HSA limit
- Feb 2016 tracking poll 54% of republicans; non white and younger greatly favor
- The proposal, called "Medicare Extra for All," would create a new public program similar to Medicare that would be open to all U.S. citizens. But Medicare Extra would offer more robust coverage that would include dental, hearing, and vision care, which currently are not covered under traditional Medicare. The proposal also would cover doctor and hospital visits, maternity care, prescription drugs, as well as no-cost preventive care, chronic disease care, and generic prescription drugs, and would give the government the authority to negotiate and set prices for each of those services.