Health care reform could this get any more interesting
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Health Care Reform: Could This Get Any More Interesting?. The Paul Merage School of Business, UC Irvine Irvine, California February 25, 2010. Dean A. Rosen, Partner. Democrats Caught Off Guard in Mass: Lose 60 Seat Senate Supermajority. Four Federal Health Care Reform Goals.

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Health Care Reform: Could This Get Any More Interesting?

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Health care reform could this get any more interesting

Health Care Reform:Could This Get Any More Interesting?

The Paul Merage School of Business, UC IrvineIrvine, CaliforniaFebruary 25, 2010

Dean A. Rosen, Partner


Democrats caught off guard in mass lose 60 seat senate supermajority

Democrats Caught Off Guard in Mass: Lose 60 Seat Senate Supermajority


Four federal health care reform goals

Four Federal Health Care Reform Goals


Building blocks of democrats 1993 1994 health reform strategy

Building Blocks of Democrats’ 1993-1994 Health Reform Strategy

Delay Reform Until Second Session of Congress

Congressional Committees Vying For Pole Position

Congress Reacts to Administration Legislative Proposal

Prioritize Economy

Engage Natural Allies, Fight Business, Insurance, Pharma

Reach out to GOP Moderates, But Be Prepared To Go It Alone

White House Is Lead Legislative Drafter As Well As Sales And Marketing Dept.


New improved democrats 2009 10 health reform strategy

New & Improved? Democrats’ 2009-10 Health Reform Strategy

Most Importantly:Stick to Speedy Timetable

Congressional Committees Cooperate Closely

Congress Takes Lead In Crafting Legislation

Link Health Care Reform to Economic Recovery

Engage Stakeholders, But Demonize Insurance Industry

Reach out to GOP Moderates, But Be Prepared To Go It Alone

Provide White House Political Air Cover


Gop positions on health reform

GOP Positions On Health Reform

  • House GOP Proposal Key Elements

  • Medmal reform

  • Insurance reform

  • Small business purchasing

  • Cross-state insurance sales

  • High-risk pools

  • State innovation funding

  • HSA expansion/tax credits

  • Anti-fraud and abuse

Major Fault Lines

  • Individual & Employer mandate

  • Medicaid expansion

  • Public plan

  • Medicare cuts

  • Overall cost

  • Tax increases

Step-by-Step Incrementalists

Budget Hawks/Fiscal Conservatives

Expansive Reformers, relying on market forces, individual choices

Moderates, willing to compromise


Health spending will nearly double over the next decade rising to over 20 percent of gdp by 2016

Health Spending Will Nearly Double Over the Next Decade, Rising to Over 20 Percent of GDP by 2016

5.0

National Health Expenditures

4.5

Actual

Projected

4.0

3.5

3.0

Dollars in trillions

2.5

2.0

1.5

1.0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2104

2015

2016

2017

2018

2019

Source: Centers for Medicare & Medicaid Services, Office of the Actuary, February 2010


Will president obama s plan bend the health care cost curve

Will President Obama’s Plan Bend the Health Care Cost Curve?

$13.2B net savings from Title III of Senate health reform bill, “Improving Quality and Efficiency of Health Care”

-- Congressional Budget Office Letter from Douglas W. Elemendorf to the Honorable Harry Reid, December 19, 2009

“CBO and JCT estimate that the average premium per person covered for new nongroup policies would be about 10 percent to 13 percent higher in 2016… The legislation would have much smaller effects on premiums for employment-based coverage.”

-- Congressional Budget Office Letter from Douglas W. Elmendorf to the Honorable Evan Bayh, November 30, 2009


Health care reform could this get any more interesting

Vast Majority of Savings in Senate/President Obama’s Health Plan Result from Tax Hikes and Health Care Program Cuts

$460B New Tax Revenue

  • $149B from 40% excise tax on cadillac plans

  • $87B from .9% Medicare payroll tax increase

  • $100B from new fees on pharma, medical devices, health health insurance

  • $2.6B for CER (includes insured and self-insured)

  • $15B from raising AGI floor on medical expenses to 10%

  • $18B from limiting FSAs to $2,500 (indexed to CPI) and limiting over-the-counter reimbursements from HSAs, FSAs and MSAs

  • $2.7B for excise tax on indoor tanning

  • $5.4B from eliminating Part D corporate deductibility

  • $17B in non-health tax compliance provisions

$483B Medicare/Medicaid Payment Reductions

  • $147B hospital market basket reductions and productivity adjustments

  • $43B MC and MA DSH cuts

  • $39B home health

  • $120B Medicare Advantage reductions

  • $25B Medicare Part B premium

  • $11B Medicare Part D premium

  • $38B Medicaid Rx rebate

  • $28B Independent Medicare Commission

  • $72B CLASS Act

  • $7.1B Follow-on Biologics

  • $6.4B Medicare and Medicaid fraud and program integrity

CBO Letter from Douglas W. Elemendorf to the Honorable Harry Reid, December 19, 2009


The way forward five options for health care reform

The Way Forward: Five Options for Health Care Reform

House Passes Senate Bill with Reconciliation “Sidecar”

House Passes Senate Bill without Reconciliation

Conference Committee Negotiates Compromise Bill

Incremental

Bill or Multiple Bills

Health Reform Dies

  • Pros:

  • Comprehensive bill passes with core Dem/Obama principles

  • Congress can address jobs and other higher political priority issues

  • Cons:

  • Dems vote on unpopular bill, with no bipartisan cover

  • House must swallow entire Senate bill with no imprint

  • Pros:

  • Opportunity to pass comprehensive bill with core principles in tact

  • Cons:

  • Whether or not GOP involved, still working off bills with perceived flaws, instead of “starting over”

  • Negotiation could take months, re-open scores of issues and not result in ultimate compromise

  • Pros:

  • Highlights popular reforms

  • Dems could demonstrate they’ve heard voters’ and may garner some bipartisan cover

  • Cons:

  • No guarantee bill passes

  • May not have desired policy impact

  • Continues unpopular reform discussion

  • Does not fire up base Dem voters

  • Pros:

  • Opportunity to start over and turn to more pressing issues

  • Perhaps blame GOP for failure

  • Cons:

  • Demonstrates lack of effectiveness, despite large Democratic majorities

  • Demoralizes Democratic base

  • Pros:

  • Comprehensive bill passes with core Dem/Obama principles

  • Congress can address jobs and other higher political priority isues

  • Cons:

  • Dems vote on unpopular bill, with no bipartisan cover

  • Fast-track procedures reinforce concern about backroom deals and lack of transparency


President obama receives his lowest approval on health care and the deficit

Threat of Terrorism

Situation in Afghanistan

The Economy

Health Care

Federal Budget Deficit

+13%

+5%

-5%

-8%

-18%

56%

55%

52%

52%

50%

47%

45%

44%

42%

38%

Approve

Disapprove

President Obama Receives His Lowest Approval On Health Care and the Deficit

Do you approve or disapprove of the way Barack Obama is handling...

Data from a Washington Post/ABC poll of 1,083 adults, conducted January 12-15, 2010.


Health care reform could this get any more interesting

51%

49%

44%

42%

38%

37%

29%

29%

27%

17%

16%

5%

The Economy

Health Care

Afghanistan

Climate Change &

Global Warming

Majority of Voters Now Believe The President is Paying Too Little Attention to the Economy, butToo Much Attention to Health Care Reform

Perceived Attention To Issues From President Obama

Too Much Attention

Too Little Attention

Right Amount of Attention

^NBC/WSJ January 2010

For each of the following issues, please tell me if you think Barack Obama is giving too much attention to this issue, too little attention to this issue, or the right amount of attention to this issue


Health care reform could this get any more interesting

In Summary……


Despite the outcome of the massachusetts senate race and other political setbacks

Despite the Outcome of the Massachusetts Senate Race and Other Political Setbacks . . .


President obama and democratic leaders intend to press ahead with major reform

President Obama and Democratic Leaders Intend to Press Ahead with Major Reform


But the political climate is toxic in this 2010 mid term election year

But the Political Climate is Toxic in This 2010 Mid-Term Election Year


Leaving the outcome of the health reform debate and its ultimate impact

Leaving the Outcome of the Health Reform Debate and its Ultimate Impact . . .


Health care reform could this get any more interesting1

Health Care Reform:Could This Get Any More Interesting?

The Paul Merage School of Business, UC IrvineIrvine, CaliforniaFebruary 25, 2010

Dean A. Rosen, Partner


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