California Teachers Association UCLA Health Benefits August 2008
Massachusetts is failing AB X 11 went down in flames last year 1. No cost containment Required Californian’s to purchase health insurance with no cost controls Affordability ? Health care debate will move nationally State Efforts
Utilization is up Unhealthy lifestyles Malpractice Aging population Or, put another way: “You’re old, fat and expensive! “If you didn’t over utilize the health care system, it wouldn’t cost so much! Their Frame
Utilization is Up • People don’t choose to go into the hospital: • Doctors determine medical need • Insurance Companies approve it • It’s simple – • Price x’s utilization= • The cost of health care
Malpractice • Quote from Congressional Budget Office: • "But even large savings in premiums can have only a small direct impact on health care spending - private or governmental - because malpractice costs account for less than 2 percent of that spending”
Aging of US Population Explains Only Minor Part of Cost Growth Source: Congressional Budget Office, “The Long-Term Outlook for Health Care Spending”, November 2007
Projections of National Health Expenditures and Their Share of Gross Domestic Product, 2006-2017 Dollars in Billions NHE as a % of GDP: *2006 are actual data from the 2006 National Health Expenditure Accounts; 2007-2017 are projected data from the 2006 National Health Expenditure Accounts. Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, at http://www.cms.hhs.gov/NationalHealthExpendData/03_NationalHealthAccountsProjected.asp#TopOfPage (see Projected; NHE Historical and projections, 1965-2017, file nhe65-17.zip) and http://www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; NHE summary including share of GDP, CY 1960-2006; file nhegdp06.zip).
Per Capita Spending on Health Care – 2006(How Does GM Compete In A Global Market?) $7,000 $6,102 $6,000 $5,000 $4,077 $3,966 $4,000 $3,159 $3,165 $3,041 2,825 $3,000 2,546 2,249 $2,000 $1,000 $0 U.S. U.K. Germany Sweden Switz Japan Norway Nether Canada S Source: Organization for Economic Co-Operation and Development (OECD) Health Data 2006 (in U.S. dollars adjusted for purchasing power parity)
Average Annual Firm and Worker Premium Contributions and Total Premiums for Covered Workers for Single and Family Coverage, by Plan Type, 2007 HMO $4,299 $11,879 PPO $4,638 $12,443 POS $4,337 $11,588 HDHP/SO $3,869* $10,693* ALL PLANS $4,479 $12,106 * Estimate of Total Premium is statistically different from All Plans estimate by coverage type (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2007.
Among Firms Offering Health Benefits to Active Workers, Percentage of All Large Firms (200 or More Workers) Offering Retiree Health Benefits, 1988-2007* *Tests found no statistical difference from estimate for the previous year shown (p<.05). No statistical tests are conducted for years prior to 1999. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2007; KPMG Survey of Employer-Sponsored Health Benefits, 1991, 1993, 1995, 1998; The Health Insurance Association of America (HIAA), 1988.
What we have to look forward to • International Foundation of Employee Benefits Plans 07-16-08 • “Shifting Costs to Dependents: As employers struggle with making their health care budget dollars stretch further in an environment of continued high costs, some are beginning to cost-shift a portion of their dependent subsidy dollars to employees. This is taking many forms, whether through increased payroll contributions for dependent health care coverage or by applying surcharges to encourage dependent spouses to take coverage under their own employer's plans.”
What we have to look forward to • The Wall Street Journal • July 16, 2008 • Retiree Benefits Take Another Hit • By Vanessa Fuhrmans and Theo Francis • “General Motors Corp.'s move to eliminate retiree health benefits for salaried workers is a sobering signal to the rest of the U.S. work force: Even those who are in or near retirement shouldn't count on keeping the company coverage they have built up”.
Health Care For America Now(The Committee for What’s Politically Possible) • Unions, faith based organizations, community organizations • There will be tremendous pressure to: • Agree to an individual mandate (it will be called shared responsibility) • A small employer contribution (it’s $295 per person per year for employers in Mass) • Marginalize supporters of real reforms
Health Care Executives H. Edward Hanway Cigna $15,036,700 Michael McCallister Humana $29, 298,568 Larry Glasscock Wellpoint $21,677,134 Jay Gellert HealthNet $3,875,444 Stephen Hemsley UnitedHealth $4,258,717 Source: Modern Health Care- December 2007
Should we have a solution that includes insurance companies? The states five largest HMOs stockpiled reserves totaling $3.15 billion ($2.2 billion more than needed to meet DMHC requirements) • Wellpoint (Blue Cross) 2007 Profits -$3,094.9 million • Kaiser (not for profit) $12 billion in excess reserves • United Health (PacifiCare) – 2007 Profits - $4,159 million • HealthNet 2007 Profits - $329.3 • Blue Shield (not for profit) –Reserve is 5 times higher than required by the DMHC
“You Can’t Cross a Chasm in Small Steps” – David Lloyd George
1848 – First Women’s Rights Convention held in Seneca Falls, New York – Nineteenth Amendment Passed by Congress June 4, 1919. Ratified August 18, 1920. 1831 Nat Turner leads a slave revolt in Virginia – 1964 Civil Rights Act is enacted Late 1940s – 50s Congress debates Medicare – Signed into law July 30, 1965 20?? – The great nation of America provides health insurance to all Cornerstones Of Our Democracy
Something to Ponder… • We have publicly funded military to protect us • We have publicly funded police and fire to keep us safe • We have publicly funded education to provide education to all children • Why don’t we have publicly funded health care to provide health care to all?
What should we do? • Get our chapters educated and involved • Fully participate in the Single Payer Strategy Group • Fully join the Labor Task Force for Universal Health Care • Conduct Speaker Trainings so we get bigger and better • Have vision and strength