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Healthcare Reform. MDI Rotary September, 2010. Agenda. The Problem Health Reform Bill Outstanding Issues / Challenges Questions. Health Reform. Overall problems – broadly recognized Highest spending per person among industrialized nations, without comparable measurable higher outcomes

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healthcare reform

Healthcare Reform

MDI Rotary

September, 2010

agenda
Agenda
  • The Problem
  • Health Reform Bill
  • Outstanding Issues / Challenges
  • Questions
health reform
Health Reform

Overall problems – broadly recognized

  • Highest spending per person among industrialized nations, without comparable measurable higher outcomes
  • Unequal access creates gaps
  • High employer costs weaken America in today’s global economy
  • Americans are increasingly angry about high costs, and how they are distributed
mckinsey international report
McKinsey International Report

Potential Savings (2003)

  • Drugs - $66 billion
  • Physician remuneration - $58 billion
  • Nursing staffing and complexity - $50 billion
  • Provider profits and taxes - $75 billion
  • Administration costs (insurance only) - $98 billion
  • “Other” - $147 billion (includes inefficient incentives)
mckinsey international report1
McKinsey International Report

Conclusion:

“ Most components of the US healthcare system are economically distorted . . . . No single factor is either the cause or the silver bullet for reform actions.”

the overall challenges
The Overall Challenges
  • Expand Access & Coverage
  • Reduce Costs/Spending
  • Improve Quality
expand access coverage
Expand Access & Coverage
  • Major focus of current reform
  • Restructure the insurance market
  • Expand government support for lower income individuals and families beginning in 2014
  • Mandated coverage beginning in 2014
insurance reforms
Insurance Reforms
  • Individuals/employers have opportunity to purchase coverage through State Exchange starting in 2012
    • Require all insures to offer coverage that meets essential benefits package including preventative coverage
    • Subsidies for low-income individuals (2014) on a sliding scale up to 400% FPL
    • Limits on out of pocket expenses
    • State specific, includes national plan overseen by Federal Office of Personnel Management
  • Projected to cover 95% of legal residents
medicaid expansions
Medicaid Expansions
  • Expand coverage to everyone at or below 133% of the Federal Poverty Level in 2014
  • Increased Federal funding

Current Maine Medicaid

    • 100% FPL Childless Adults
    • 200% FPL Children
    • 200% FPL Parents of Children
how reform is paid for
How Reform is Paid For
  • Elimination of subsidy to insurance companies for Medicare Advantage
  • Reduced Medicare reimbursement to hospitals (CAH’s excluded)
    • Across the board cuts to payments
    • Reduced payment and penalties for complications
    • Reduce payment for readmissions
how reform is paid for1
How Reform is Paid For
  • Increased taxes
    • Medicare tax on high incomes (2013)
    • “Cadillac Plan” tax (2018)
    • Assessments on other providers/insurers
  • Closing of the “Doughnut Hole”
  • Geographic variation
    • $200 million per year lowest quartile states (2011 & 2012)
    • IOM study
insurance reforms 2010
Insurance Reforms - 2010
  • Community rating (standard) pricing
  • Continued coverage up to age 26
  • Prohibit insurers from denying coverage for children based on pre-existing conditions
  • Ban on lifetime coverage maximums
  • Minimum medical loss ratio required
insurance reforms ultimately
Insurance Reforms - Ultimately
  • Ban on denying coverage to adults for pre-existing conditions
  • No cost sharing – preventative services
  • Elimination of annual limits
  • Limits on FSA’s and HSA’s
  • Individual mandate to buy coverage (2014) penalties phased in
    • Individual penalty – $95 (2014) - $695 (2016)
    • Family maximum $2,085 (2016) or 2.5% household income
employer provisions current
Employer Provisions - Current
  • Current tax credit for small business
    • Up to 50 FTE’s/avg. wages $50,000
    • Employer cont. at least 50% of cost
    • Not available to sole prop./self-emp.
  • Maximum credit 35% for 10 or fewer FTE’s and avg. wages less than $25,000
  • Credit to withheld taxes for nonprofits
  • Starting 2014 – 2 year transition 50% credit
employer provisions future
Employer Provisions - Future
  • Current health plans grandfathered
  • Employers of 50 FTE’s or more may be required to pay an assessment for coverage
    • Full time = 30 hours per week
    • Seasonal employees with fewer than 120 days excluded
  • Assessment different if you offer insurance or not – and if employees are subsidized by the exchange
employer provisions future1
Employer Provisions - Future
  • All employers who offer insurance to provide vouchers for employees not taking insurance
  • Employers of 200 FTE’s or more must automatically enroll employees
  • Employers must provide coverage information on W-2 forms
  • Exclusions available for hardship ?
other provisions
Other Provisions
  • Various Quality Intiatives
  • Medicaid demonstration projects
  • Expansion of various “rural” provisions
  • Improved Medicaid reimbursement for Primary Care Physicians (2013)
  • $50 million for liability reform demonstration projects
outstanding issues challenges
Outstanding Issues / Challenges
  • Cost drivers not directly addressed
  • Complexity of implementation
  • Physician payment “fix”
  • Adequacy of fines for not buying coverage
  • Political will to implement payment cuts and taxes
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