The Implications of Health Care Reform

1. The Implications of Health Care Reform James P Brown, MD

2. Basics • By 2014, no pre-existing conditions are allowed • Insurance premium rates may only vary by: Individual vs family, age of insured(not >3:1), tobacco use(not>1.5:1) and rating area(established by state or HHS, reflecting relative risk in an area).

3. Basics • Wellness: premium discount for enrollment in and achieving goals of HHS programs that monitor your progress towards a healthier lifestyle. No specification on penalty for noncompliance • You can keep your plan, but only if it conforms to these standards by 2014

4. Qualified Health Plan • Essential services are: Ambulatory care, ER, Inpatient Care, Maternity/Well Baby Care, Pediatrics(includes oral and vision), Mental Health/Substance Abuse, Rehabilitation Services and Devices, Laboratory Services and Prevention/Wellness/Chronic Disease Management • Deductible is <$2000/individual and <$4000 for any other plan

5. Qualified Health Plan • Coverage Levels-determined by HHS • Uses Actuarial Value-cost of essential health benefits provided to a sample population. This value(x) becomes your annual limitation • Bronze Level-60% of x • Silver Level-70% of x • Gold Level-80% of x • Platinum Level 90% of x

6. Abortion Coverage • Plans allow for public, but not Federal, funding of abortion. A plan covering abortion and a plan that does not cover abortion is required at each coverage level • HHS determines the amount of money needed to potentially provide every enrollee in a given plan with abortion services. The insurer must set aside that money in a separate, abortion services account. This money is supposed to come from premiums, not Federal funds. Of course, Federal funds are used for everything else, so it becomes a semantic shell game.

7. American Health Benefit Exchange • Will offer “acceptable” Health Plans by 2014 • Plans will be rated at each coverage level • Rating is on basis of “quality” and price • Quality is determined by HHS. It requires use of Evidence-Based Medicine(algorithms), use of Medical Home Model, decreased Hospital readmissions and promotion of Wellness Programs • Ratings and prices will be posted online, as will the names of the Hospitals and Providers, who will also have a rating

8. Consumer Operated and Oriented Plans(CO-OPS) • Groups of small businesses and/or individuals that combine their premiums to form a larger risk pool for insurance • Prevents very small businesses and individuals from being wiped out by catastrophic events, and allows greater bargaining power with insurers

9. Community HealthCare Option • Offers Essential Benefits only • If this becomes insolvent, refunding issues are not addressed until the next year’s budget. • Yay! A whole new version of Medicaid that is even more financially unstable

10. Basics • States may arrange Health Care Compacts between states, or nationwide, that allows for an insurance plan across state lines. The rules of the plan are subject to the laws of the state where it is originally written. HHS must ok all compacts • Individual Mandate-arrives in 2014, everyone must be insured, it will appear on your tax form. The penalty is $695 or 2.5% of your income, whichever is greater. It says the mandate is justified on the basis of being vital to commerce and the economy. What will SCOTUS say?

11. The Medical Home Model • All non-acute medical care will occur at home. Hospitals and others will set up “acceptable” organizations to deliver care at home, teach caregivers how to care for patients, and be available at night for help. This may or may not be run by MD’s, and the type and amount of treatment provided will be determined by HHS

12. Medical Schools • More training in diversity, cultural competence and “heritage literacy” • More spots allowed for underserved minorities • Emphasis on primary care, rural care • Public Health track in medical school where, in exchange for subsidies, the Surgeon General determines your residency. • Unused residency spots will be redistributed as primary care spots. There is a clear bias against specialists(unless, of course, you need one)

13. Overview • Everyone needs insurance, and each plan is designed around stealth rationing • Wellness will be used to penalize all who don’t conform • Evidence-Based Medicine uses computer-based algorithms to attempt to reduce complex problems into simple if-then statements. These are the guidelines. If they are not followed, then the doctor will be paid less and his/her rating will suffer because of a lack of “Quality.” This is where your health care will be rationed, at a level where only your doctor would know that, before the guidelines, you were eligible for A,B and C. But now, only A and B are available for you. Incidentally, if there is a lawsuit, the Feds will say that these are only guidelines. Who wants to practice this kind of medicine?

14. 2010-It Begins • HHS provides a $5billion high-risk pool for uninsured patients with pre-existing conditions • 10% tax on indoor tanning salons-7/1 • Dependents to stay on parent’s ins. to 26 • Small Business Tax Credit-Gov’t will pay up to 35% of employer’s contribution to purchasing health insurance for new employees

15. 2010 • Medicare cuts to inpatient Psychiatric Hospitals • Elimination of Specialist Reimbursement for Consultation • HHS begins cuts on overvalued medical services • HHS publicly reports hospital-acquired conditions and establishes Medical Reimbursement Data Centers

16. 2011-It Worsens • $250 reimbursement to Medicare Part D beneficiaries whose benefits run out-this is a one-time payment • Employers must disclose the value of the benefit provided by the employer for the employees health coverage on the W-2 form • Medicare Advantage cuts begin • Can’t use HSA, FSA, HRA or MSA for OTC prescriptions • Wealthier seniors(85K/170K) pay higher premiums, not indexed to inflation • Medicare cuts for reimbursement for seniors using Advanced Imaging(CT/MRI) • Seniors can’t purchase power wheelchairs unless they rent first for 13 months

17. 2011 • 11 Billion over 5 years for Community Health Centers • Medicare cuts to Nursing Homes, Long-term Hospitals and Inpatient Rehabilitation • 10% Medicare bonus for Primary Care Physicians and General Surgeons

18. 2012-An Election Year • Medicare cuts to Hospice, Dialysis and Inpatient Psychiatric Care • Medicare will decrease spending by switching to an HMO called an Accountable Care Organization(groups of hospital, doctors, nurses and ancillary care personnel that will bid competitively to provide care. This essentially requires physicians to be employed by hospitals) • MD Compare website set up to compare physicians by readmission rates, quality standards, average reimbursement and cost-effectiveness • HHS sets up hospital pay-for-quality program and begins a value-based MD modifier for reimbursement

19. 2013-The Death of Private Practice of Medicine in America • Payments to Hospitals, physicians, nurses and ancillary personnel bundled as one payment to Hospital(requires universal physician employment and likely unionization) • Medicare Wage Tax increases 0.9% if earn 200K/250K • 3.8% Medicare Tax on unearned, non-active business income if earn 200/250K • Threshold for deduction of Medical Expenses as % of income is raised from 7.5 to 10% • Co-ops begin • Tax on Medical Device Manufacturers begins • Makers of drugs, devices and biologicals must report on transfer of value to MD’s, groups and teaching hospitals

20. 2014 • Noninsurance Penalty begins • Exchanges in place • Insurers must cover everyone with no pre-existing conditions • Independent Medicare Advisory Board forms and makes recommendations to decrease Medicare costs • More Medicare cuts to Home Health • All private insurance plans are taxed(if they go bankrupt, here comes the Public Option)

21. 2015-Had Enough Yet • More Medicare cuts to Home Health • IPAB starts to decrease Medicare costs(by rationing) • Disproportionate Share Medicare payments(to hospitals that accept a lot of public aid and charity cases) are decreased

22. 2016 • States can set up Interstate Insurance Plans if HHS approves

23. 2017 • Pay-for-quality program for all physicans

24. 2018 • Cadillac Tax on high-cost plans-40% tax on benefits above:10,200 for individuals, and 27,500 for families or individuals who are in a union

25. Summary • Insurance companies likely forced out of the Health Insurance Business within 5-8 years • Medicare will be an HMO • Physicians will be unionized employees • Non-acute care will occur at home, and will be provided by nurses and Physician Assistants

26. Melissa Bean’s Take • In an email from 4/14 • “I supported it because it will provide the health care security, affordability and choice families and businesses seek while utilizing the private market-not a government takeover-and yielding a significant federal reduction of 1.3 trillion.” • Already, the CBO has said that premiums will likely increase, and that the law does not reduce the deficit unless massive spending cuts in Medicare and in Medicare reimbursement to physicians is maintained, which no one thinks is likely.

27. More from Melissa Bean • “The bill does not reduce Medicare benefits. In fact, senior’s benefits will increase with savings on prevention and wellness services, which will be provided without a copay by September.” • “Providing patient and practice-specific data to doctors drives better health care outcomes.”

28. Melissa Bean • Exactly which bill did she read?

29. Now What? • Nothing is inevitable • The Founders gave us ballot boxes to conquer tyranny • Defund • Repeal • Real Reform