Health Care Reform

Health Care Reform Sherry Glied sag1@columbia.edu

Health Reform was Not Inevitable • Some people have said that it would be a miracle if we passed health care reform. But I believe we live in a time of great change when miracles do happen. • The cost of our health care has weighed down our economy and the conscience of our nation long enough. So let there be no doubt: health care reform cannot wait, it must not wait, and it will not wait another year • I believe that comprehensive health insurance is an idea whose time has come. I believe that some kind of program will be enacted this year. • Millions do not now have protection or security against the economic effects of sickness. And the time has now arrived for action to help them attain that opportunity and to help them get that protection.

Public Opinion 1993 • 20% of voters ranked health care as the most important issue in the 1992 presidential election1 2008 • 9% indicated health care was the most important issue in the 2008 campaign 1 Kaiser Family Foundation Election Spotlight. Data collected from 1992 Presidential Election Exit Polls 2 CNN Exit Polls, November 4, 2008

Economic Landscape 1993 • GDP • 2.9% Change from 1992 • Budget Deficit as % of GDP • 3.9% (1993) • Public Debt as a percentage of GDP • 66.2% (1993) • Unemployment rate • 6.9% (1993) 2009 • GDP : • -3.5% Change from 2008 • Budget Deficit as % of GDP: • 10.1% (2009) • Public Debt as a percentage of GDP • 85.2% (2009) • Unemployment • 9.3% (2009)

Political Landscape 1992 Obama 349, McCain 173 House: 256 (D), 178 (R) Senate: 55(D), 42(R), 2(I) April 27: Arlen Specter (R)→(D) June 20: Al Franken (D) 2008 • Clinton 370, Bush 168 • House: 258 (D), 176 (R) • Senate: 57 (D), 43 (R)

1. Reform of Insurer Practice • Rate Review – review of increases>10% • Transparency/appeals • Lifetime limits • Medical Loss Ratio • Annual limits • Pre-existing conditions • Underwriting and rating limits • Risk adjustment

Annual Limits • Minimum limits • 2010 – $750,000 • 2011 – $1.25 million • 2012 – $2 million • 2014 – not permitted

Limited Benefit Plan • McDonald’s • $56 per month – up to $2,000 benefits/year • Ruby Tuesday • $18.43 per week - $1,250 outpatient; $3000 inpatient • Denny’s • No inpatient, up to $300 doctor visits • Waivers • 3 million people in 1,372 mini-med plans

2. Improvements in Coverage • Preventive services in Medicare • Part D donut hole in Medicare • Preventive services with no copay • Essential Health Benefits • Standardized cost-sharing • Actuarial value

Preventive Services with No Copay • USPSTF A and B • November 2009 – Mammography • Mikulski amendment • IOM Committee • Contraceptive coverage

3. Expansions of Coverage • Young adults • Tax credits to 400% FPL • Health Insurance Exchanges • 20-22 million (including much current non-group) • Medicaid expansion to 133% FPL • 16-17 million • Requirements to offer and obtain coverage • Individual mandate • Employer requirements

2014 Expansions

4. Prevention and Public Health Fund • Community transformation grants • Tobacco prevention • Clinical prevention • Workforce training • Data systems

5. Delivery System Reforms • Accountable Care Organizations • Innovation Center • Bundled Payments • Duals • Challenges • Pioneers

CMS Innovation Center “The purpose of the Center is to test innovative payment and service delivery models to reduce program expenditures under Medicare, Medicaid and CHIP…while preserving or enhancing the quality of care furnished…” • “Preference to models that improve coordination, quality and efficiency of health care services.” • Resources - $10 Billion in funding for FY2011 through 2019. • Opportunity to “scale up”: HHS Secretary has authority to expand successful models to the national level.

6. Cost Containment • Reductions in payments to Medicare Advantage plans - $156 billion • Change in Medicare non-MD payment update formula - $415 billion • IPAB - $3 billion • Excise tax on high cost plans – beginning 2018 - $111 billion

Cost Containment in the ACA

Health Care Reform