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Health Reform in the US
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Current ProblemsUninsured1. Uninsured and Underinsured
45.7 million people uninsured in 2007 (15.3 percent of population) – source current population survey
An increase of 7.8 million from 2000 Decrease from 2006 where it was 47 million
Decrease came from an increase in government coverage The percent of people covered by private health insurance
decrease slightly from 67.9 to 67.5 between 2006 and 2007 Percent of people covered by employer insurance also decreased
slightly from 59.7 to 59.2 Majority are employed in small firms (<100).
So any reform needs to address this group. 16 million non-elderly adults (20% of non-elderly adults)
were underinsured High out-of-pocket health costs to income ratio.
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Figure 1. 47 Million Uninsured in 2006;Increase of 7.8 Million Since 2000Number of uninsured, in millions
38 40 42 43 43 45 47 46
0
20
40
60
2000 2001 2002 2003 2004 2005 2006 2007
Source: U.S. Census Bureau, March Current Population Survey, 2001–2007.
4
Figure 2. 16 Million Adults Under Age 65Were Underinsured in 2005
Uninsuredduring the year
47.8 million(28%)
Insured, notunderinsured108.6 million
(63%)
Underinsured16.1 million
(9%)
Adults Ages 19–64
Note: Underinsured defined as having any of three conditions: 1) annual out-of-pocket medical expenses are10% or more of income; 2) among low-income adults, out-of-pocket medical expenses are 5% or more of income; 3) health plan deductibles are 5% or more of income.Source: Analysis of the Commonwealth Fund Biennial Health Insurance Survey (2005).
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Figure 3. The Majority of Uninsured AdultsAre in Working Families
Family work statusAdult work status
At leastone
full-time worker67%
Onlypart-time worker(s)
11%
Full-time49%
Part-time15%
No worker in family
21%Not
currently employed
36%
Note: Percentages may not sum to 100% because of rounding.
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Adults ages 19–64 with any time uninsured
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Figure 4. More than Three of Five Working Adultswith Any Time Uninsured Are Employed inFirms with Less than 100 Employees
Self-employed/1 employee10%
2–19 employees31%
20–99 employees22%
100–499 employees11%
Note: Percentages may not sum to 100% because of rounding.
Source: The Commonwealth Fund Biennial Health Insurance Survey (2005).
Don’t know/refused4%
Percent of employed adults with any time uninsured, ages 19–64
500+ employees21%
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Figure 5. Prevalence of High Family Out-of-PocketCost Burdens by Poverty Status Among theNonelderly Population, 1996 and 2003
7.1
15.6
24.125.9
15.89.7
22.723.7
33.3
19.2
0
25
50
75
Total <100% FPL 100%–<200%
FPL
200%–<400%
FPL
400%+ FPL
1996 2003
Source: J. S. Banthin and D. M. Bernard, “Changes in Financial Burdens for Health Care: National Estimates for the Population Younger Than 65 Years, 1996 to 2003,” Journal of the American Medical Association, Dec. 13, 2006 296(22):2712–19.
Percent of nonelderly adults who spend >10% of disposable household income on out-of-pocket premiums and expenditures on health care services
8
Current ProblemsCost of the Uninsured Cost on the Individual
Receive less preventative care Uninsured adults 3-4 times more likely than insured to go
without preventative care services. (e.g screening for hypertension or breast cancer) Late detection leads to worse health outcomes and higher health
costs. Less likely to be able to manage chronic conditions which
leads to greater morbidity/mortality for this population Can’t afford care: Uninsured adults with chronic conditions are
4.5 times more likely than insured to report an unmet need for medical or prescription drugs
More likely to need ER or hospital care due to mismanagement
Pay high out-of-pocket expenditures Problems paying their medical care bills.
Source: Families USA Foundation.
9
Figure 6. Receipt of Recommended Screening and Preventive Care for Adults, by Family Income and Insurance Status, 2002
31
46
52
39
48
56
49
0 50 100
Uninsured all year
Uninsured part year
Insured all year
<200% of poverty
200%–399% of poverty
400%+ of poverty
National
Percent of adults (ages 18+) who received all recommended screening andpreventive care within a specific time frame given their age and sex*
* Recommended care includes seven key screening and preventive services: blood pressure,cholesterol, Pap, mammogram, fecal occult blood test or sigmoidoscopy/colonoscopy, and flu shot.Data: B. Mahato, Columbia University analysis of 2002 Medical Expenditure Panel Survey.Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.
10
Figure 7. Adults Without Insurance Are Less Likelyto Be Able to Manage Chronic Conditions
161827
58
35
59
0
25
50
75
Skipped doses or did not fill
prescription for chronic condition
because of cost
Visited ER, hospital, or both for chronic
condition
Insured all year Insured now, time uninsured in past year Uninsured now
Percent of adults ages 19–64 with at least one chronic condition*
* Hypertension, high blood pressure, or stroke; heart attack or heart disease; diabetes; asthma, emphysema, or lung disease. Source: S. R. Collins, K. Davis, M. M. Doty, J. L. Kriss, and A. L. Holmgren, Gaps in Health Insurance: An All-American Problem, Findings from the Commonwealth Fund Biennial Health Insurance Survey (New York: The Commonwealth Fund, Apr. 2006).
11
Figure 8. Many Americans Have ProblemsPaying Medical Bills or Are Paying Off Medical Debt
34
211413
23 2618
9816
53
292626
42
0
25
50
75
Not able to pay
medical bills
Contacted by
collection
agency*
Had to change
way of life to pay
medical bills
Medical
bills/debt being
paid off over
time
Any medical bill
problem or
outstanding debt
Total Insured all year Uninsured during the year
Percent of adults ages 19–64 who had the following problems in past year:
* Includes only those who had a bill sent to a collection agency when they were unable to pay it.Source: S. R. Collins, K. Davis, M. M. Doty, J. L. Kriss, and A. L. Holmgren, Gaps in Health Insurance: An All-American Problem, Findings from the Commonwealth Fund Biennial Health Insurance Survey (New York: The Commonwealth Fund, Apr. 2006).
12
Current ProblemsCost of the Uninsured Cost on the System and Insured
Cost of health care provided to uninsured but not paid for by uninsured in 2005 is over $43 billion. 2 percent of total health care expenditures
Premium are higher for the insured Health insurance premiums for families with insurance
were through private employers was $922 higher in 2005
Was $341 for individuals.
13
Current ProblemsHigh cost of health system2. High cost of health system
Approximately double the per capita expenditures of rich countries
Increased cost in health premiums compared to wages since 1980s
14
Figure 9. International Comparison of Spending on Health, 1980–2005
0
1000
2000
3000
4000
5000
6000
7000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
United StatesGermanyCanadaFranceAustraliaUnited Kingdom
0
2
4
6
8
10
12
14
16
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
United StatesGermanyCanadaFranceAustraliaUnited Kingdom
Average spending on healthper capita ($US PPP)
Total expenditures on healthas percent of GDP
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.Updated data from OECD Health Data 2007.
15
* Estimate is statistically different from the previous year shown at p<0.05.^ Estimate is statistically different from the previous year shown at p<0.1.Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. Historical estimates of workers’ earnings have been updated to reflect new industry classifications (NAICS).Source: G. Claxton, J. Gabel et al., "Health Benefits in 2007: Premium Increases Fall to an Eight-Year Low, While Offer Rates and Enrollment Remain Stable," Health Affairs, Sept./Oct. 2007 26(5):1407–16. Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2007, and Commonwealth Fund analysis of National Health Expenditures data.
12.0
18.0
0.8
6.1*7.7*
13.9^
12.9*10.9*
8.2*
5.3*
11.2*
8.5 9.2*
0
5
10
15
20
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Health insurance premiums
Workers’ earnings
Overall inflation
National health expendituresper capita
Figure 10. Increases in Health Insurance PremiumsCompared with Other Indicators, 1988–2007
Percent
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Current ProblemsHigh cost of health system
Expenditures by category: 4 highest Hospital care (30.4%) Physician and clinical services (21.3%) Drugs and prescriptions (10%) Administrative Costs and Net Cost of Private Health
Insurance (7.3) – higher than in other OECD countries Cost per enrollee of private health insurance expenses not
related to direct care costs (e.g admin costs and profit) Expenditure Growth by Category (3 highest)
Administrative costs (12 %) Drugs (10.7%) Hospital care (8%)
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Figure 11. Percentage of National Health ExpendituresSpent on Health Administration and Insurance, 2003
Net costs of health administration and health insuranceas percent of national health expenditures
1.9 2.1 2.12.6
3.34.0 4.1 4.2
4.8
5.6
7.3
0
2
4
6
8
France
Finlan
d
Japan
Canada
United K
ingdom
Netherla
nds
Austria
Australi
a
Switzerla
nd
German
y
United S
tate
sa b c *
a2002 b1999 c2001*Includes claims administration, underwriting, marketing, profits, and other administrative costs;based on premiums minus claims expenses for private insurance.Data: OECD Health Data 2005.Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006.
18
Figure 12. Health Expenditure Growth 2000–2005for Selected Categories of Expenditures
12.0
8.6 8.0 7.96.1
10.7
0
5
10
15
20
Total Hospital care Physician &clinical services
Nursing home &home health
Prescriptiondrugs
Prog. admin. &net cost of
private healthinsurance
Average annual percent growth in health expenditures, 2000–2005
Source: A. Catlin, C. Cowan, S. Heffler et al., “National Health Spending in 2005: The Slowdown Continues,”Health Affairs, Jan./Feb. 2007 26(1):142–53.
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Current ProblemsHigh Cost of Health System: Chronic Diseases Need to deal with chronic disease to reduce costs.
More than 90 million Americans have a chronic disease.
Medical care costs of people with chronic disease account for more than 75% of total expenditures.
Unhealthy diet and physical inactivity can cause or aggravate chronic conditions including diabetes, hypertension, heart disease, stroke, and some cancers
Source: CDC
20
21
0%
10%
20%30%
40%
50%60%
70%80%90%
100%
U.S. Population Health Expenditures
Figure 13. Health Care Costs Concentrated in Sick Few—Sickest 10 Percent Account for 64 Percent of Expenses
1%5%
10%
49%
64%
24%
Source: S. H. Zuvekas and J. W. Cohen, “Prescription Drugs and the Changing Concentration of Health Care Expenditures,” Health Affairs, Jan./Feb. 2007 26(1):249–57.
50%
97%
$36,280
$12,046
$6,992
$715
Distribution of health expenditures for the U.S. population,by magnitude of expenditure, 2003 Expenditure
threshold (2003 dollars)
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Current ProblemsHigh Cost of Health System: Chronic Diseases
23
Current ProblemsGrowing levels of obesity in US An adult who has a BMI between 25 and 29.9
is considered overweight. An adult who has a BMI of 30 or higher is
considered obese. Height Weight Range BMI Considered
124 lbs or less Below 18.5 Underweight125 lbs to 168 lbs 18.5 to 24.9 Healthy weight169 lbs to 202 lbs 25.0 to 29.9 Overweight203 lbs or more 30 or higher Obese
5’ 9”
24
Current ProblemsGrowing levels of obesity in US Health consequences: Overweight and obese individuals are at
increased risk for many diseases and health conditions, including the following: Hypertension (high blood pressure)
Associated with strokes, heart attack, heart failure, damage to the retina swelling of the brain.
Osteoarthritis (a degeneration of cartilage and its underlying bone within a joint)
Dyslipidemia (for example, high total cholesterol or high levels of triglycerides)
Type 2 diabetes Coronary heart disease Stroke Gallbladder disease Sleep apnea and respiratory problems Some cancers (endometrial, breast, and colon)
25
Current ProblemsGrowing levels of obesity in US Economic consequences (Finkelstein,
Fiebelkorn, and Wang, 2003) In 1998, approximately 9.1 % of total US medical
expenditures were attributed to both overweight and obesity (approximately 92.6 billion 1992 dollars)
Approximately half these costs were paid by Medicare and Medicaid.
Costs likely to be much higher now as obesity rates have risen since 1998
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1998
Obesity Trends* Among U.S. Adults1990, 1998, 2007(*BMI 30, or about 30 lbs. overweight for 5’4” person)
2007
1990
No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%
Source: CDC presentation on US Obesity Trends 1985-2007
27
Criteria Used to Evaluate ReformThe Common Wealth Fund
1. Universal Coverage: Should participation be voluntary?
2. Provision of benefits that cover essential services
3. Affordable premiums, deductibles, and out-of-pocket costs relative to family income.
4. Ease of enrollment
5. Choice in plans
6. Health risks broadly pooled
7. Simple to administer with coverage that is automatic and continuous
8. Portability (minimize dislocations)
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Criteria Used to Evaluate ReformOther criteria to think about:
8. Cost Containment: How does the plan contain the growth of medical care expenditures over time?
9. Employment: To what extent does the plan influence overall employment opportunities?
10. Others? Does it reduce long-term costs of the system, will the system have ramifications for other sectors than health? (e.g. if get rid of employer-based care may be better for business)
29
Health Care Proposals 2008
Difference between democratic and republican proposals. Not much within party difference
Republicans: Tax incentives to have individual purchase insurance on the individual market. Less regulation of insurance companies.
Democrats: Mixed private-public insurance with shared responsibility for financing.
Review of Plans
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Health Care Proposals 2008Insurance market -- McCainMain Problems: uninsured and costKey Features: Rely on individual insurance market
Has not said will protect individuals from adverse selection (i.e no coverage for pre-existing conditions etc). Sick, aged, women of child bearing age will pay substantially
more May not be able to get coverage for pre-existing conditions or
deliveries. Little or no risk pooling – increases the cost of care
once sick If don’t have the foresight to buy good insurance when
healthy will not be insurance and may not be able to get sufficient insurance when sick.
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Health Care Proposals 2008Insurance market -- McCain Can buy insurance in any state.
Different states have different regulations for rating by age, health status sex, mandates on what insurance companies have to offer etc.
Argued that this is a move to deregulate. States won’t have the power to regulate and this power will be held at the federal level. McCain want to get rid of many of the regulations there are. Argues it is to make policies cheaper – what do you think?
32
Health Care Proposals 2008Insurance market -- McCain Employer health benefits to be taxable income.
Could lead employers to stop providing health benefits. Takes away monetary incentive for employers to provide
health insurance Could lead to low skilled workers or healthy not buying
health insurance through employer Health insurance coverage is usually more comprehensive
through employers so may be more expensive than catastrophic care coverage on individual market
Adverse selection may mean low skilled or healthy will underinsure on the private market or not insure. This can lead to an unraveling of the more comprehensive health insurance market
33
Health Care Proposals 2008Insurance market -- McCain
Problematic because the alterative is to buy on the individual market Little or no risk pooling Administrative costs are much higher For same benefits policies are much more expensive
Careful of the quotes you hear – these are for policies to healthy people and doesn’t disclose all the out-of-pocket expenditures
Unhealthy people on this market often can’t get coverage Net effect is that people will have much less
generous policies than they have today More out of pocket costs, high costs if actually get sick.
34
Health Care Proposals 2008Insurance market -- McCain Tax credit: 2,500 individual or 5,000 family
When the average premium is 12,000 for full coverage, this will not make comprehensive insurance unaffordable for the poor. Poor or middle class will be forced into the individual
market and will likely be underinsured. (same problems as before)
If premiums continue to rise, people will be paying more since the tax credit is not tied to the raising with cost of health care
If spend less on health insurance, credit goes into a health savings account Incentive to buy cheap health insurance which increases
financial risk
35
Health Care Proposals 2008Insurance market -- McCainBring down the cost of health care by: Drugs: allowing re-importation
Not allowing negotiation – but buying drugs from countries that do negotiate (i.e. letting Canadians do it for the US).
Funding avenues to bring in cheaper generics. They are already cheap and available so needs to find ways to bring
the into mainstream use in the medical system. Pay-for-Performance:
Pay for a bundle of care (not each service) or coordinated care. This will avoid payments for services that were a result of preventable
medical errors or mismanagement This is like a capitation system in some ways.
Greater use of technology for administrative purposes and to keep medical records.
People will purchase cheaper policies which give less coverage so it hoped they will use less care What about the long-run?
36
Health Care Proposals 2008Prevention -- McCain Put more responsibilities in the hands of
individual Hmm has this worked so far?
Public health initiatives to encourage individuals to prevent chronic diseases, receive appropriate tests for early detection.
Parents responsible for teaching children about health nutrition and exercise.
Promote care alternatives such as walk-in clinics in retail outlets.
37
Health Care Proposals 2008Insurance Market -- Obama Main problems
Too many uninsured or under insured Cost of health care is too high, which is leading to
people being uninsured Growth of health care costs is too high Lack of preventive care and management of chronic
illnesses Providers not adequately reimbursed
38
Health Care Proposals 2008Insurance Market -- Obama Main difference between Clinton and Obama is that Clinton
will mandate that everyone have health care and Obama is not.
Obama may do that if not enough people sign up for health insurance.
Not having a mandate is tricky if you are not going if pre-existing conditions aren’t included. Will just wait until you are sick – but this type of system which is based on risk pooling needs both the sick and non-sick to enroll. You will get free-riders.
Obama doesn’t want to mandate insurance for everyone until he is sure it is affordable What does affordable mean?
You can read his health advisor’s response to criticism http://sentineleffect.wordpress.com/2007/12/01/health-mandates-a
-talk-with-obama-health-advisor-david-cutler/
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Health Care Proposals 2008Insurance Market -- Obama
Key features: Keep insurance you have or buy insurance through a National
Health Insurance Exchange Includes a public plan that will provide the same benefits that
members of congress have. Private plans would also be available. They have to provide the
same benefits as the public plan. These plans are portable because not based on a job. Everyone guaranteed access to health care, no rating based on
pre-existing conditions The Exchange would evaluate the services and cost of the
various plans and make these differences transparent. To provide insurance in The Menu, plans will have to adopt
quality and efficiency practices. These include: preventive care practices and using computerized
administrative and record keeping systems.
40
Health Care Proposals 2008Insurance Market -- Obama Will expand Medicaid and SCHIP to serve low-
income population. SCHIP: state children’s health insurance program. Did not define what low-income population will be so not
clear how much this will cost. Sliding-scale premium subsidies
Not clear how this will work No change in the income tax exclusion benefit
employer base health care Could put a cap on tax benefit
Those who buy very expensive care receive a greater subsidy
41
Health Care Proposals 2008Prevention -- Obama Require insurers to
cover preventative services which are known to be effective.
Promote chronic care management programs Promote chronic care coordination (important for
those with multiple conditions). Coordinate public spending on prevention.
42
Health Care Proposals 2008Financing--Obama Repeal tax cuts if income >$250,000 Employer contributions Savings:
Health IT investment Reduce unnecessary spending from preventable errors and paper
billing system. Improve prevention and management of chronic illnesses
Reduce hospital costs Increase insurance industry competition, reduce underwriting
costs, and profits Provide reinsurance for catastrophic coverage Have universal insurance to reduce spending on uncompensated
care of the uninsured Buy drugs from other countries and negotiate drug prices for
Medicare
43
Health Care Proposals 2008Republican Critiques--Obama General republican critiques:
Too much regulation of the insurance industry No economic basis to the argument
Might cost too much – some admit there is not enough knowledge to base this statement on. Argue that it will be too expensive because the benefits are
too generous. See article on Health Affairs Journal website
Article is more an opinion piece. Lack or articulation of the economic arguments and lack of
use of other articles to back arguments. Says Obama plan is not addressing the core reasons why
health care is increasing – but fails to say what those are!
44
Features of Leading Candidates’ Approachesto Health Care ReformObama McCain
Individual Mandate Children only No
EmployerShared Responsibility
Offer or contribute X%of payroll
No
Medicaid/ SCHIP Expansion Yes No
Private Insurance MarketsNew group National Health Insurance Exchange with private & public plan
options
Purchase private individual insurance in any state
Subsidies for Low to Moderate Income Sliding scale premium subsidies
Tax credit $2,500 for individuals, $5,000 for
families
Quality and Efficiency Measures
HIT, Transparency, P4P, Prevention, Comparative effectiveness, Chronic disease management, Disparities,
Malpractice reform
HIT, Transparency, P4P, Prevention, Chronic disease
management, Malpractice reform
Insurance Premium rating based health status No Yes
Drug Reform Gov’ negotiate drug prices; reimportation; more use generic drug.
Reimportation; more use generic drugs
Source: Authors’ analysis of presidential candidates’ health reform proposals. Common Wealth Fund
45
Where Leading Candidates Standon Health Care Reform Features
Obama McCain
Most Candidates from Both Parties Agree
Expand coverage Yes Yes
Health IT Yes Yes
Transparency Yes Yes
Malpractice reform Yes Yes
Prevention Yes Yes
Pay for performance Yes Yes
Candidates Differ
Universal coverage Yes No
Individual mandate Children only No
Employer pay or play Yes No
Changes to employer benefit tax exemption
No Unclear
Regulation of insurance markets Yes No
Financing source Yes No
Source: Authors’ analysis of presidential candidates’ health reform proposals. Common Wealth Fund
46
Principles for Reform
Tax Incentives and Individual Insurance
Markets
Mixed Private–Public Group Insurance with Shared Responsibility
for Financing Public Insurance
Covers Everyone 0 (-) + +
Minimum Standard Benefit Floor – + +Premium/Deductible/Out-of-Pocket CostsAffordable Relative to Income
– + +
Easy, Seamless Enrollment 0 + (0) ++
Choice + + +
Pool Health Care Risks Broadly – + ++Minimize Dislocation, Ability to Keep Current Coverage + ++ –
Administratively Simple – + ++Work to Improve Health Care Quality and Efficiency 0 + +
0 = Minimal or no change from current system; – = Worse than current system;+ = Better than current system; ++ = Much better than current system
How Well Do Different StrategiesMeet Principles for Health Insurance Reform?
47
Candidates position pieces
Website with general information Obama: http://www.barackobama.com/issues/healthcare/ Plan: Written document on plan http://www.barackobama.com/pdf/issues/HealthC
areFullPlan.pdf Website with general information McCain
http://www.johnmccain.com/Informing/Issues/19ba2f1c-c03f-4ac2-8cd5-5cf2edb527cf.htm
There is no written document on the plan, just bullet points
48
Health affair article
“Cost and coverage implications of the McCain plan to restructure health insurance”
3 key features1. Withdrawing the tax exclusions health premiums
paid by employers
2. Individual tax credit
3. Deregulating non-group insurance by allowing people to purchase across state lines
49
Health affair article
Implications of the key features Make calculation based on economic studies to show:
Not allow many more Americans to obtain health insurance Certainly not reach universal coverage Over time if the tax credit is not changed, un-insurance rates will
increase More people will be underinsured due to reliance on the
individual insurance market which is more expensive way to provide health insurance.
Cost implication Difficult to sort out because not enough details Great burden on the individual in terms of out-of-poket
costs Those with acute illnesses or chronic illness will almost
certain pay much more than they do now
50
Clinton Health Reform
1993 Clinton proposed “National Health Security Act of 1993”
Public concern about rising health care costs, uninsured population contributed to Clinton’s election in 1992 Perceived job lock (don’t change jobs because don’t want to
lose health insurance). Similar to the present Obama plan. Sometimes called
managed competition Plan failed
51
Clinton Health Reform
Rationale (as described in the act): Rapidly rising health care costs Health care/insurance bureaucracy Uneven equality Inadequate long-term care Uneven access Fraud/abuse contributing to access/cost/quality
problems
52
Clinton Health Reform
Proposed universal coverage by 1998
Key features: Combination of Employer and individual mandates
Employer Each employer was required to provide health insurance
to its full-time employees and finance at least 80% of the premium of an average plan. Employee pays the rest.
Total employer contributions capped at 3.5-7.9 of total payroll
Large firms with more than 5,000 employees could self insure through “corporate alliance
53
Clinton Health Reform
Region health alliance Not-for-profit agency that would negotiate health
insurance premiums with private insurance companies Use the purchasing power to negotiate competitive prices
Standardized benefits provided by plans Employers or Individuals who do not have employer-
based insurance, can purchase competitively price insurance from these agencies.
May also collect premiums, manage enrollment into plans and other admin duties.
Medicaid and Medicare continue: Savings from Medicare would be made from using more
managed care schemes (though research Didn’t show this will happen for sure).
54
Health Reform in US: Clinton Plan
Premiums/Insurers: Four rating groups for premiums
Single Couples no children Single headed families Two-adult families
Premiums based on community rating Open enrollment Guaranteed renewability No pre-existing condition exclusions Real premium growth capped at 1.5 % initall, zero by 1999 Reductions in premiums would be given for unemployed, part-
time workers and self-employed. Subsidies?
55
Health Reform in US: Clinton Plan
Relatively comprehensive benefits Hospital services Emergency services Physician/other professional services Clinical preventive services (extensive list) Mental health/substance abuse treatment services Family planning services Pregnancy-related services Hospice, home health, and extended care services Ambulance services Outpatient laboratory, diagnostic, prescription drug services Outpatient rehabilitative services Durable medical equipment Vision and hearing services Preventive dental services (initially children only) Health education classes
56
Health Reform in US: Clinton Plan
States could opt for “single-payer” system, add benefits, supplement insurance allowed etc.
Financing: Assumed would be saving on exiting public health
insurance programs Increase cigarette excise tax Limited other tax increases National Health Board to regulate growth in premiums
and costs Plans to streamline private insurance market
bureaucracy, reduce paperwork, combat fraud/abuse
57
Collapse of Clinton Plan
Plan presented to public Sept. 22, 1993 Initially strong public support (>70%) By summer 1994, support only 40% November 1994, republican party took control of
House of Representatives. Plan lacked necessary political support in Congress.
Started out with it, but moved too slowly on the plan, and support waned.
Plan was liberal, but congress was more than half Republican, so needed to convince Republicans.
58
Collapse of Clinton Plan What went wrong:
Political factors Design group not responsive enough to critics
Lack of bipartisan effort Opposed by health care trade groups
Health Insurance Association of America Prices for health care may have been more regulated. Poured money into negative campaigns
Providers American Medical Association, Pharmaceuticals and others Managed care being expanded (provider didn’t like that) More of a monopsony buyer for drugs with health alliance
Some argue that big business didn’t go for it because it weakened there position. Universal coverage weakens the bargaining position of the
firm. Small business association opposed mandate due to potential
cost increase
59
Collapse of Clinton Plan
Republican Party Ideology is to have less regulation not more
Plan was highly debated: Uncertain over cost savings/financing Lack of support from middle class
Not solving their problems Fears of rationing Unknown how the new government bureaucracy will compare
with private sector. Fear fueled by opposition and ads Clinton took too long to try to push it through.
Gave interest groups enough time to organize, fight against it. Clinton administration withdrew proposal without a vote
60
Collapse of Clinton Plan
Economic factors Involved income redistribution, mainly to the near poor
or poor Lack of plan to finance the reform which those groups
who opposed played on and created fear of finances
What did happen Expanded health coverage for children Improved long-term care and care for the disabled Changed public’s view on cigarette smoking
61
Massachusetts Reform
Enacted on April 12, 2006 Implementation began end 2006 Highest priority was to reduce the number of uninsuredKey features: Individual mandate
All adults required to buy health insurance Financial penalty of up to 50% of cost of health care imposed on
income taxes if no health insurance Become effective July 1, 2007
Employer requirements Employers with >=11 employees had to provide health insurance
coverage or contribute up to $295 annually per employee Permit workers to purchase health care with pre-tax dollars or
face a fine.
62
Massachusetts Reform
Commonwealth Care Health Insurance Insurance plans offered by program have no deductibles
and use managed care organization to provide care. Provides sliding-scale subsides to individual with incomes
up to 300% of the federal poverty level ($30,630) Provide free health care for individual with less than 150%
of the FPL ($15,315) Choice of 4 plans
Commonwealth Choice Provides private, unsubsidized coverage to individuals and
small businesses 3 levels of coverage available
63
Massachusetts Reform
Commonwealth Health Insurance Connector Oversees the two above organization Independent state agency responsible for working
with health plans to ensure affordable quality care Grants “seals of approval” of private plans (i.e.
gives a quality/cost approval) Sets affordability and minimum coverage
standards
64
Massachusetts Reform
Health Care Quality and Cost Council Establishes statewide goals for improving health care
quality, containing health care costs, and reducing racial and ethnic disparities in health care
Demonstrates progress toward achieving those goals Disseminates, through a consumer-friendly Web site and
other media, comparative quality and cost information by facility, clinician, or physician group practice for obstetrical services, physician office visits, high-volume elective surgical procedures, high-volume diagnostic tests, and high-volume therapeutic services.
Expanded Medicaid to children up to 300 % of FPL
65
Massachusetts Reform
Minimum coverage standards Not put into the legislation Commonwealth connector set the min. coverage and
affordability standards Standard included:
Preventive and primary care, emergency services, hospitalization, ambulatory patient services, mental health services, and prescription drug coverage
Capped deductibles at $2,000 for individual and $5,000 for family
Capped out-of-pocket expenditures to $5,000 for an individual and $10,000 for a family.
Not being implemented until 2009
66
Massachusetts ReformEvidenceFrom article: Long, Sharon. June 3 2008 “On
the Road to Universal Coverage: Impact of Reform in Massachusetts At One Year” Health Affairs, web exclusive
Conducted interview of roughly 3,000 people before the reform and after the reform
67
Massachusetts ReformEvidence
Percent of Uninsured Adults (Ages 18 - 64)
13
23.8
5.27.1
12.9
2.9
0
5
10
15
20
25
All Adults Adults <300% FPL Adults >= 300% FPL
Fall 2006
Fall 2007
Percent of uninsured dropped dramatically and quickly. 93% of nonelderly adults covered
68
Massachusetts ReformEvidence Remaining uninsured
Tended to be young, male, low-income, and in good health.
No evidence of crowd-out Worry fewer employers would offer coverage
because individuals able to buy it through the connector Public coverage replace private coverage
Employer coverage increased by 5 % for low-income adults. Other income brackets had no change.
69
Massachusetts ReformEvidence Access to care
Interviews conducted Preventive care visits increased by 6% for low
income Level of unmet need for care attributable to cost
dropped by 5% for all income brackets, by 10 percent for low income adults
Unmet need for care associated with trouble finding a provider or making an appointment increased for low-income adults Difficulty in navigating health care system for newly
insured? Stress on providers as more people enter the system
70
Massachusetts ReformEvidence No change in non-emergency use of emergency
departments Out-of-pocket spending dropped for all adults
Mainly from prescription drugs Few adults reported medical bill problems Cost of program higher than expected due to more
people signing up for insurance than expected Support for health reform remained widespread at
71 % despite higher costs
