PowerPoint Presentation

At present the United States has the unenviable distinction of being the only great industrial nation without compulsory health insurancethe Yale economist Irving Fisher said in a speech in December. December of 1916, that is. More than nine decades ago, Fisher thought that universal health coverage was just around the corner. Within another six months, it will be a burning question, he predicte

Read more: http://www.newyorker.com/talk/comment/2009/12/07/091207taco_talk_lepore?printable=true&currentPage=all#ixzz2t1TkufNq

1The U.S. Healthcare SystemRichard L. Elliott, MD, PhDProfessor and Director, Medical EthicsMercer University School of MedicineAdjunct ProfessorMercer University School of LawMost of the time you study what you think of as medicine, e.g., anatomy, biochemistry, molecular biology and so forth. But, if you do not know this already, you will come to find out that much of what you need to know in practice has to do with the environment in medicine especially what resources are available to treat your patients. This can mean clinical resources such as clinics and Ecs, wellness center, public health clinics, and also the means to pay for what they need. How will they pay for your visits? Medications? Rehab? So we spend a bit of time helping you understand the environment in which you practice.

Dr. Greenberg has begun this by giving you and idea of how we got where we are, and I am going to continue this.

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Most of the time you study what you think of as medicine, e.g., anatomy, biochemistry, molecular biology and so forth. But, if you do not know this already, you will come to find out that much of what you need to know in practice has to do with the environment in medicine especially what resources are available to treat your patients. This can mean clinical resources such as clinics and ECs, wellness center, public health clinics, and also the means to pay for what they need. How will they pay for your visits? Medications? Rehab? So we spend a bit of time helping you understand the environment in which you practice.

Dr. Greenberg has begun this by giving you and idea of how we got where we are, and I am going to continue this.

3Outline of PresentationWhat we have nowSummary of the U.S. healthcare systemHow we got hereBrief history of healthcare in the U.S.Where we are goingBrief look at the Affordable Care ActGoalsDescribe key events in the evolution of U.S. Health careState why reforming U.S. Health care has been so hard?Distinguish universal health care from socialized medicine Describe the breakdown of expenditures in each of the major components in the U.S. healthcare systemDescribe the major goals of the Affordable Care ActThe role of the individual mandate in the ACADescribe Medicare, Medicaid, and SCHIPWhere are we now?How are health care dollars spent?How is care paid for?What do Americans get for their money?

http://www.zerohedge.com/article/charting-americas-brief-trip-and-out-austerity-and-onward-complete-disasterNow lets look at individual groups of payors8

Is US Healthcare socialized?Health care costs as % of GDPNote roughly equal public-private financing in U.S.10

Per capita health care costs. We spend the most on health care and its again about evenly split between public and private financing11

http://www.google.com/imgres?hl=en&tbo=d&biw=1079&bih=687&tbm=isch&tbnid=KnIDdAA5VyN_HM:&imgrefurl=http://www.fark.com/comments/6238201/Vermont-becomes-latest-state-to-pass-a-law-making-it-clear-they-wont-be-implementing-Obamacare-Because-theyre-going-full-on-single-payer-universal-healthcare-instead&docid=QEy1KusWoAS_dM&imgurl=http://img20.imageshack.us/img20/4312/costlonglife75.gif&w=594&h=459&ei=C7HPUK_lLeTI2AXAlIG4Bg&zoom=1&iact=hc&vpx=632&vpy=153&dur=146&hovh=197&hovw=255&tx=122&ty=83&sig=108235086052880953491&page=1&tbnh=149&tbnw=199&start=0&ndsp=20&ved=1t:429,r:18,s:0,i:14212

Slovenia smack-down!!http://www.google.com/imgres?hl=en&client=safari&sa=X&tbo=d&rls=en&biw=1079&bih=682&tbm=isch&tbnid=TF5O_VFz4k2wnM:&imgrefurl=http://www.thearchnemesis.com/growsomeballsdems.html&docid=4ofosMyGrOtrWM&imgurl=http://www.thearchnemesis.com/images/Health%252520Rankings%252520US37.jpg&w=300&h=424&ei=zzPsULS-MpOE0QG_0IDgCQ&zoom=1&iact=hc&vpx=699&vpy=243&dur=4841&hovh=267&hovw=189&tx=113&ty=139&sig=108235086052880953491&page=1&tbnh=143&tbnw=101&start=0&ndsp=24&ved=1t:429,r:10,s:0,i:12114How we pay for health careEmployer-based insuranceIndividual insurance policiesMedicareMedicaidUninsuredOther (VA, military, HIS, etc.)Employer-sponsored insuranceOffered by employers as part of benefits package

Administered by private insurance companies (for-profit and non-profit)

Employer pays bulk of premium; employee pays remainder

Significant erosion of employer-sponsored insurance in recent years16Most Americans with insurance receive it as part of their benefits package through their employer (or their spouses/parents employer). This type of coverage is voluntary: employers can choose not to offer it, and employees can choose not to take it. The employers that are most likely to offer this type of coverage are mid-sized or large companies; many small businesses do not offer it because of its cost.

Employer-sponsored health insurance is administered through private insurance companies, which may be for-profit or non-profit.

The employer purchases health plans, paying the bulk of the premium (the monthly cost of insurance). Employees are responsible for the difference. In addition to paying for part of the premium, employees usually have to cover some of the costs of services received, and the entire cost of services not covered under the plan.

Since 2000, there has been a large decrease in the percentage of Americans with employer-sponsored insurance. This is due to the rising costs of insurance premiums.Employer-Based and IndividualTax policy favors employee-based benefitCompanies that spend money in employee health benefits have incentive.They do not pay tax on the profit of the money spent on health care benefits. Employees are not taxed on benefitsAdverse selection and individual InsurancePeople who know they are sick are more likely to buy health insurance. Leads individually-purchased health care to be MUCH more expensive than what an individual would pay for a group rating employer based health care.Update on Individual Health Coverage - Updated (#7133-02), The Henry J. Kaiser Family Foundation, Aug 2004

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President hands pen to Harry Truman, July 30, 196518Medicare - OldA federally-funded programBeneficiariesAges 65 and olderESRD, ALS, other disabilitiesEligibility:http://www.socialsecurity.gov/pubs/10043.html#a0=2Part A Hospital, Skilled Nursing Facility costsPart B Physician, RN, equipment, tests, otherPart C Medicare Advantage PlansPart D Prescription Drug PlanPotential beneficiaries a bit more complicated than this. See

19Beneficiaries can enroll in regular fee-for-service program OR in a Medicare Advantage (MA) planMA include HMOs, PPOs and other private health plansSome plans offer extra benefits and have lower cost-sharing requirements than traditional MedicareAccess to doctors and other health care providers is typically limited to those in the plans networkPlans are paid a fixed amount per enrollee On average, 14 percent more than it would pay under traditional MedicareThis extra payment will increase overall costs to Medicare by about~$150 b over 10 yearsMedicare Advantage (Part C)

Medicare Advantage Enrollment (in millions)25% of beneficiaries are enrolled in Medicare Advantage plans in 20092020Part C refers to the part of the Medicare program that allows Medicare beneficiaries to receive their Medicare-covered benefits through private plans, rather than through the traditional fee-for-service program. Today, Medicare beneficiaries have the option to enroll in a number of different types of plans for their Medicare covered benefits, including HMOs, PPOs, and private fee-for service plans. Nearly a quarter of all Medicare beneficiaries are enrolled in a Medicare Advantage plan, mainly HMOs. These plans contract with Medicare and receive payments from the government to provide benefits to enrollees. Over time, the methodology for determining how much the federal government will pay has evolved to encourage plan participation and provide extra benefits, particularly in rural areas. As a result, however, the federal government is now paying more for people who enroll in Medicare Advantage plans 14 percent more on average than it would pay for the same individuals if they were covered under Original Medicare. These so-called overpayments allow plans to provide extra benefits to the minority of beneficiaries who are enrolled in private plans, but increases costs to the federal government, at a time when the program is facing fiscal challenges. Medicare offers important coverage, but with high cost-sharing and benefit gapsDoes not cover all medical benefitsVery limited long-term care coverageNo dental, hearing aids or eyeglasses

Has relatively high cost-sharing requirementsDeductibles for Part A, Part B, and Part DCoinsurance/copayments Part D coverage gap (doughnut hole)

No limit on out-of-pocket spendingUnlike typical plans offered by large employer

Pays about half of beneficiaries total health and long-term care spending2121Thus far, weve focused on coverage under Medicare and how the benefits are financed. It is also important to note that Medicare still has significant gaps in coverage and relatively high cost-sharing requirements, which requires beneficiaries to absorb relatively high oop costs.

While Medicare provides basic benefits, and now helps pay for prescription drugs, it does not pay for long-term care. Medicare has a limited skilled nursing facility benefit of up to 100 days and home health benefits, but does not pay for ongoing care for people with LTC needs, either in nursing homes, assisted living facilities or at home.

Medicare does not pay for dental care, which can be quite expensive, and does not cover hearing aids or eyeglasses

Further, Medicare has relatively high cost-sharing requirements WHEN THE DEDUCTIBLES AND OTHER COSTSHARING ARE CONSIDERED. And unlike typical large employer plans, Medicares drug benefit has a coverage gap (TN: I THINK YOU NEED TO EXPLAIN THE DONUT HOLE IN A BIT MORE DETAIL), and Medicare does not have a cap on catastrophic out-of-pocket expenses for covered benefits.

Thus most beneficiaries NEED AND have some sort of supplemental coverage to help fill in the gaps and cover cost-sharing requirements.

Median out-of-pocket health spending as a percent of income for Medicare beneficiaries is on the rise especially for those with modest incomesNOTES: In 2005, federal poverty level: $9,570/individual and $12,830/couple. SOURCE: Kaiser Family Foundation. Skin-in-the-Game, November 2008.

2222As you can see here, Medicare beneficiaries are spending a larger and larger share of their income for health care. This is because health costs are rising faster than income.

Median out-of-pocket spending as a share of income increased from 11.9 percent in 1997 to 16.1 percent in 2005, including a statistically significant increase between 2004 and 2005. The increasing financial burden of health care is steepest for those with modest incomes.

In some respects, the median does not tell a story, because it minimizes the impact on those with the greatest burden. In 2005, the 25 percent of beneficiaries with the largest burden spent nearly one-third or more (30.7 percent) of their income on health care, suggesting that sustained increases in out-of-pocket spending could make health care less affordable for all but the highest-income beneficiaries.

Medicare Financial ChallengesPart A Trust Fund - The hospital insurance trust fund is projected to be insolvent by 2026 with insufficient funds to pay for all promised benefitsWorker to retiree ratio The number of workers per beneficiary is projected to decline as the Medicare population grows in the futureGDP Medicare spending is projected to double from 3.5% of GDP in 2010 to 5.6% of GDP by 2035. The Congressional Budget Office indicates most of the growth is due to rising health costs, rather than the aging of the Baby Boom generation.2323http://www.commonwealthfund.org/Newsletters/Washington-Health-Policy-in-Review/2013/Jun/Jun-3-2013/Medicare-Solvency-Extended.aspxGiven projected increases in health costs, and an aging population, it is not a surprise that the Medicare Trustees suggest that Medicare faces serious financial challenges. According to a report in 2009 from the Medicare actuaries WHO TRACK MEDICARE SPENDING, spending on Part A benefits exceeds the revenues coming in FROM PAYROLL TAXES, so Medicare will now need to rely on reserves that have been built up over the years in the Part A trust fund, which is the account used to pay for hospital benefits, in order to fully pay for these benefits. The actuaries also projected that these reserve funds will be fully depleted in 2017, meaning there will be insufficient funds to pay for all benefits that year - unless Congress takes action as it has in the past to slow spending or increase revenues. (NEED TO MENTION THE WORKER TO RETIREE RATIO, I MOVED UP TO INCLUDE UNDER PART A BUT IT IS A BROADER ISSUE, RIGHT?

The actuaries also point out that Medicare is projected to consume a growing share of the gross domestic product as well as consume a larger share of national health expenditures. Significantly, the Congressional Budget Office indicates most of the growth is due to rising health costs, rather than the aging of the babyboom generation. This analysis has helped to reframe the debate about Medicare spending, shifting the emphasis away from viewing Medicare as a program that is broken and in need of fundamental reform to a program that is being hammered by rising health care costs much the same as other payers. (TN: ARENT THE LAST 2 BULLETS THE SAME POINT?)

Medicare at a Glance, (#1066-08), The Henry J. Kaiser Family Foundation, Sept 2005

Increasing elderly population, decreasing numbers of workers to support them.Looking to the FutureMedicare remains critical source of health coverage and economic security for many

Addressing fiscal pressures without shifting more costs to beneficiaries

Setting fair payment rates to providers and plansMedicare Sustainable growth rate (SGR) needs a permanent fix

Monitoring and improving Part D drug benefit

Assessing role of Medicare Advantage plans

Improving care to meet needs of those with coverage and chronic illnesses and disabilities

Ensuring affordability for lower-income beneficiaries

Strengthening coverage for long-term care services2525.. Thank you.

(WE TYPICALLY HAVE A FINAL SLIDE WITH RESOURCES FOR MORE INFO. ILL PUT Medicaid Poor52 million recipients - $266 Billion in 2003Federal-State PartnershipEligibility varies by State. Generally poor + children, parents of dependent children, pregnant women, disabledDual eligible with Medicare chronically ill, long-term careCovers most clinical services + RxThe Medicaid Program at a Glance, (#7235), The Henry J. Kaiser Family Foundation, Jan 2005 26Medicaid PoorMay contract as Medicaid HMO with non-government entityFuture more cost limiting. Possibilities:Prescription drug limits Utilization review: evaluate services for medical necessityPrior review and authorization for referralsThe Medicaid Program at a Glance, (#7235), The Henry J. Kaiser Family Foundation, Jan 2005 27State Childrens Health Insurance Program (S-CHIP)Supplements Medicaid by covering low-income children who are ineligible for MedicaidPeachCare for Kids in GeorgiaAdministered and financed similarly to MedicaidSimilar problems to Medicaid: Low reimbursement rates some providers refuse to accept S-CHIPUnder-enrollmentEligibility varies by specific populations and states28The State Childrens Health Insurance Program was designed in 1997 to supplement Medicaid by covering low-income children who are ineligible for Medicaid. For instance, it might cover a child whose family has an income 200% of the FPL, which is too much for Medicaid.

S-CHIP is administered and financed similarly to Medicaid. Like Medicaid, reimbursement rates are low, so some providers do not see S-CHIP patients. There is also a lot of under-enrollment in S-CHIP; it is estimated that more than 7 out of 10 children in America are actually eligible for public insurance but they are not enrolled. Finally, like Medicaid, there are strict and arbitrary eligibility requirements for different groups of people.Other public insurance programs TricareUniformed service members, families, retireesVeterans Health AdministrationHealth benefits plan available to all veterans Services delivered through VA health care facilities (socialized medicine)Financed by the federal governmentIndian Health Service29Other public insurance programs include the VA, which is delivered to all veterans of the military. The VA is a truly socialized medicine system in the sense that all health care delivery comes through government-owned facilities and through government-employed doctors.

The Indian Health Service is another health insurance program for Native Americans who live on reservations.Profile of the uninsured47.0 million Americans81% from working families jobs without benefits52-59% from low-income families (200% FPL)80% are adults50% are ethnic minorities79% are American citizens

Source: Kaiser Commission on Medicaid and the UninsuredSource: US Census Bureau30According to the U.S. Census Bureau, 47.0 million Americans were uninsured in 2006, representing 1 out of 7 Americans.

Contrary to popular belief, the vast majority of the uninsured are from working families. Many work jobs where health insurance is not offered: small businesses, service industries, and blue-collar low-wage jobs. Others work at businesses that offer health insurance only for full-time employees or employees who have worked longer than a certain amount of time. Still others are offered health insurance through their job but do not take advantage of it because the insurance is low-quality or too expensive.

Just over half of the uninsured population are from low-income families, defined as being within 200% of the federal poverty level.

Most of the uninsured are adults, in part due to the larger number of adults but also due to programs like S-CHIP, which is a public insurance program for children.

Ethnic minorities comprise about one-third of the US population, but they make up half of the uninsured population.

Again, contrary to popular belief, the vast majority of the uninsured are American citizens. Immigrants have a higher likelihood of being uninsured, in part because theyre not eligible for Medicaid for five years until after they immigrate.

Most uninsured are in working families, but in jobs without benefits.The Uninsured and Their Access to Health Care, (#1420-05), The Henry J. Kaiser Family Foundation, Dec 2003

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How did we get here?How did we get here? Hospital from the turn of the 20th century.

http://teachhealthk-12.uthscsa.edu/curriculum/healthcare/pdf/healthcare01A-hist.pdf

Until around 1910 hospitals were places for the poor to die. Then as surgery adopted antiseptic and aseptic procedures, as anesthesia became more widely practiced, as childbirth benefited from hand washing and better techniques, as medical training became more hospital-based, hospitals became centers where middle class patients would go for care. But many could not afford care. Then Baylor Hospital i9ntroduced the first pre-paid hospital insurance plan for 50 cents a month to Dallas schoolteachers.

Dr. Justin Kimball, a former school superintendent, became an administratorat Baylor Hospital in Dallas. While reviewing unpaid accounts at BaylorHospital, Dr. Kimball recognized many of the names of Dallas schoolteachers. Aware that low-paid teachers would never be able to pay their maternity bills, he created the not-for-profit Baylor Plan which allowed teachers to pay 50 cents a month into a fund that would provide them with hospital care at Baylor Hospital. This concept is believed to be the origin of modern health insurance. Soon hospitals across the coun- try began to set up similar plans. In 1944, the Baylor Plan became a part of Blue Cross and Blue Shield. The contributions of this health insurance company to the health care industry are remarkable. They were the first in the state to offer coverage for cancer treatment, catastrophic illnesses, coverage for the poor and elderly before government programs were available, and the first to administer the Medicare and Medicaid programs. "The war economy is an entirely different ballgame," Thomasson says. The government rationed goods even as factories ramped up production and needed to attract workers. Factory owners needed a way to lure employees. She explains that the owners turned to fringe benefits, offering more and more generous health plans.The next big step in the evolution of health care was also an accident. In 1943, the Internal Revenue Service ruled that employer-based health care should be tax free. A second law, in 1954, made the tax advantages even more attractive.1929: Baylor Hospital in Texas originates group health insurance. Dallas teachers pay 50 cents a month to cover up to 21 days of hospital care per year.

Read more: http://www.foxnews.com/us/2012/06/27/us-health-care-reform-efforts-through-history/#ixzz2Fax0k1zm32How did we here?1800s 1910 Scientific medicineAnesthesia, antisepsis, asepsis, microbiologyX-rays, magic bullets1910-1920 Hospitals and education1910Flexner report1919 ACS Minimum Standard1929-2010Healthcare financing1929 Baylor plan and Blue Cross1912 -2009Reforming healthcareAmerican College of Surgeons and the Minimum Standard http://www.facs.org/archives/minimumhighlight.html33

1912Former President Theodore Roosevelt champions national health insurance as he unsuccessfully tries to ride his progressive Bull Moose Party back to the White House. (Photo by Topical Press Agency/Getty Images) http://www.huffingtonpost.com/2012/06/23/health-care-reform-2012-history_n_1621236.html34

Where are we going?2009President Barack Obama and the Democratic-controlled Congress spend an intense year ironing out legislation to require most companies to cover their workers; mandate that everyone have coverage or pay a fine; require insurance companies to accept all comers, regardless of any pre-existing conditions; and assist people who can't afford insurance. (Alex Wong/Getty Images)

35Why is reforming U.S. healthcare hard?Piecemeal approach to healthcare reformMedicare, Medicaid, children, medicationsToo many stakeholders in current systemMedical industry is so large 17% of GDPToo many have too much to loseThe more out of control medical expenses become, the harder it is to control themPolitical campaigns are expensiveToo few underinsuredPiecemeal approach to reform Underinsured do not impact campaign finances

Goals for health care reformReduce number of underinsuredImprove coverage for insuredReduce or eliminate exclusions/recissionsImprove access to and quality of carePreventative careComparative efficacyControl rising costs

Tolbert Kaiser.edu37Promoting Health CoverageMedicaid Coverage(up to 133% FPL)Employer-Sponsored CoverageExchanges(subsidies 133-400% FPL)IndividualMandateHealth Insurance Market ReformsUniversal CoverageReturn to KaiserEDU TutorialsThe health reform law seeks to expand health coverage by building on the existing public-private system for providing health insurance and filling in the gaps in the current system. It expands eligibility for the Medicaid program, the current safety net health insurance program for the poor. It creates new exchanges, or marketplaces, where people can purchase coverage and, depending on their income, receive premium subsidies to help them afford the coverage. It includes new penalties for employers that dont offer coverage to their employees and provides tax credits to small employers that do to bolster the availability of employer-sponsored coverage.

Supporting these enhanced coverage mechanisms are a new requirement that individuals, with some exceptions, have health insurance (referred to as the individual mandate) and new rules for insurers requiring them to provide coverage to everyone regardless of health status and limiting the variations in premiums they charge people.

Together, these strategies are designed to increase significantly the number of people with health insurance. 38Expanding Health Insurance CoverageEarly ActionsCreate temporary Pre-existing Condition Insurance Plan for people with medical conditions who are uninsuredTo qualify, individuals must be uninsured for six monthsFederally fundedAvailable in each state until 2014Allow adult children to remain on their parents health insurance policy until age 26Children do not have to live with parents, nor be studentsMay be married, but spouses and children not eligible

Return to KaiserEDU TutorialsTo begin to fill the gaps in coverage, the health reform law makes some small changes to our system this year. To provide immediate coverage to individuals with medical conditions, the law creates the Pre-existing Condition Insurance Plan. Essentially a high risk pool available in each state, individuals are eligible if they have a pre-existing medical condition and have been uninsured for at least six months. To make the coverage in this plan more affordable, the premiums will be set as if the enrolled population was not sick. In some cases, however, the premiums will still be unaffordable for people who need the coverage. This program is federally funded and will be available until the new health insurance exchanges are up and running in 2014.

Targeting the young adult population, which has the highest risk of any age group of being uninsured, the law allows adult children to remain on their parents insurance policy until age 26. Adult children do not have to live with their parents or be claimed as a dependent on their parents taxes to be eligible. Nor do they have to be students. They may also be married, though their spouses and children are not eligible.

39Expand Medicaid to all individuals under age 65 with incomes up to 133% of the poverty level ($14,400/individual or $29,300/family of 4)Create new Health Insurance Exchanges where individuals and small employers can purchase coverageProvide premium subsidies to eligible individuals and families with incomes up to 400% of the poverty level ($43,300/individual or $88,200/family of 4) through the ExchangesExpanding Health Insurance Coveragein 2014Return to KaiserEDU TutorialsMuch more significant coverage expansions occur in 2014. In 2014, the law expands the Medicaid program to cover nearly all individuals with income up to 133% of the federal poverty level, which is $14,400 for an individual or $29,300 for a family in 2010. This expansion will create a uniform eligibility threshold for Medicaid across the states. Currently, states set eligibility levels for Medicaid and in most states, adults without dependent children regardless of their income are not eligible.

Also in 2014, the law creates new state-based health insurance exchanges or marketplaces, where individuals and small employers can purchase coverage. These exchanges will allow individuals to compare plans and select the one that best meets their needs.

To ensure that coverage in the exchanges is affordable to most consumers, beginning in 2014, premium subsidies will be available to those with incomes up to 400% of the federal poverty level or $43,300 for an individual and $88,200 for a family of four in 2010. 40Estimated Health Insurance Coverage in 2019

SOURCE: Congressional Budget Office, March 20, 2010

Total Nonelderly Population = 282 MillionReturn to KaiserEDU TutorialsThe Congressional Budget Office, which provides estimates of the cost and impact of all major legislation, has estimated that the coverage provisions in the health reform law will expand coverage to 32 million people by 2019. Sixteen million more people will be enrolled in Medicaid and the Childrens Health Insurance Program and 16 million people will be newly covered through the Exchanges. As a result, the uninsured rate in 2019 is estimated to be 8% as compared to 19% if health reform had not been implemented.Improving Health InsuranceReform the health insurance marketProhibit insurers from denying coverage or charging people more because they are sickProhibit insurers from rescinding coverage or placing annual or lifetime limits on coverageImprove benefits for those with insuranceEnsure coverage of preventive services with no cost-sharingEstablish minimum benefit standardsLimit out-of-pocket spending for consumersReturn to KaiserEDU TutorialsIn addition to expanding coverage, the law seeks to improve the adequacy and the affordability of the coverage that people have. New insurance market rules will prohibit insurers from denying coverage or charging people more because they are sick. In addition, insurers will not be permitted to rescind coverage, except in cases of fraud, nor will they be able to place lifetime or annual limits on the coverage.

Other changes will require plans to provide coverage for certain preventive services, such as mammograms, colonoscopies, and diabetes screenings, with no cost-sharing for the individual. Many plans will be required to offer a minimum set of benefits and to limit what people have to pay out-of-pocket for their care. 42Employer Requirements and IncentivesLarger employers that dont offer affordable coverage will face penalties of up to $2,000 per full-time worker per year beginning in 2014Small employers with up to 50 employees will be exempt from penaltiesTax credits available for some small businesses that offer health benefitsReturn to KaiserEDU TutorialsThe law includes new requirements and incentives for employers to offer health coverage to their workers. Beginning in 2014, employers with 50 or more employees that dont offer affordable coverage will be subject to penalties of $2,000 per full-time worker per year, excluding the first 30 workers.

Recognizing the particular difficulty small employers face in providing health insurance, the law exempts employers with fewer than 50 employees from the penalties, and provides the smallest employers that offer coverage tax credits to offset some of the costs of that coverage. 43Individual MandateIndividuals will be required to have health coverage that meets minimum standards in 2014Individual mandate spreads costs among whole populationMandate enforced through the tax systemPenalty for not having insurance: greater of $695 (up to $2085 for family) or 2.5% of family incomeExemptions for certain groups and if people cannot find affordable health insuranceReturn to KaiserEDU TutorialsOne of the more controversial aspects of health reform is the requirement that individuals have health insurance. Beginning in 2014, most people will be required to have health insurance that meets minimum coverage standards. This mandates was included in the law to ensure that the requirement that insurers provide coverage to everyone could work. Without a mandate for coverage, some people might choose not to purchase insurance until they got sick. Doing that would drive up premiums for everyone else, making coverage unaffordable for many.

This new requirement will be enforced through the tax system and individuals will face monetary penalties if they dont have coverage. Certain individuals will be exempt, including those who dont have access to affordable coverage, those with incomes below a certain threshold, American Indians, immigrants who are not legal residents, and people in jail.44Some Uninsured Will RemainCongressional Budget Office (CBO) estimates 23 million uninsured in 2019Who are they?Immigrants who are not legal residentsEligible for Medicaid but unenrolledExempt from the mandate (most because cant find affordable coverage)Choose to pay penalty in lieu of getting coverageMany remaining uninsured will be low-income Return to KaiserEDU TutorialsDespite efforts to expand coverage, some uninsured will remain. The Congressional Budget Office estimates that 23 million people will be uninsured in 2019. The remaining uninsured include immigrants who are not legal residents and therefore not eligible for Medicaid or for federal premium subsidies in the exchanges, people who are eligible for Medicaid but are unenrolled, those who are exempt from the individual mandates in most cases because they do not have access to affordable insurance and those who choose to pay the penalty instead of purchasing health coverage. It is expected that many of the remaining uninsured will be low-income so that the need for a strong network of safety net providers to care for these uninsured will continue.45Health Reform and Delivery System ChangesPromoting primary care and preventionImproving provider supplyDeveloping new models for coordinating and delivering careMaking use of information technologyReforming provider payments to promote qualityReturn to KaiserEDU TutorialsIn addition to the provisions focusing on health coverage, the law makes important changes to the health care delivery system. These delivery system changes are aimed at improving access to care and overall quality and to reign in rising health care costs. They cover a number of areas including promoting primary care and prevention, improving the supply of providers, particularly primary care providers, creating new models for delivering health care that promote quality and efficiency, using health information technology to streamline the delivery of care, and creating incentives for quality care through provider payments.46Promoting Primary and Preventive CareIncreased Medicare and Medicaid payments for primary care providersIncentives for new doctors and other health professionals to practice primary careNo cost-sharing in Medicare and new private plans for certain preventive services and incentives for states to do same in MedicaidFunding for population-based prevention activities

Return to KaiserEDU TutorialsThe health reform law places a strong emphasis on primary and preventive care. To improve access to primary care, the law increases Medicare and Medicaid payments for primary care providers. Through loan repayment programs, scholarships and other mechanisms, the law also creates incentives for new doctors and nurses to practice in primary care.

The law also seeks to increase access to preventive services by requiring Medicare and new private health plans to provide coverage for certain preventive services, including mammograms, colonoscopies, and diabetes screenings, at no cost to the consumer. It provides incentives in the form of enhanced federal payments for states to offer the same coverage through their Medicaid programs. To improve the health of the population, the law creates the Prevention and Public Health Fund to support initiatives to prevent obesity and diseases such as HIV, promote tobacco cessation, and strengthen the public heath infrastructure. 47Containing Health Care CostsGreater oversight of health insurance premiums and insurer practicesIncreased competition and price transparency through ExchangesProvider payment reforms in MedicareTesting of new, more efficient delivery system models in Medicare and MedicaidReturn to KaiserEDU TutorialsAnother key area addressed by the Health Reform Law is containment of health reform costs. Some of the provisions in the health reform law targeting health care costs focus on health care prices, primarily the premiums insurers charge, while other provisions address provider payment methodologies and the ways in which the health care system is organized that may be contributing to overutilization and inefficient delivery of care.

With respect to prices, the law requires states to review premium rate requests by insurers to identify excessive or unreasonable premium increases. Insurers will also be required starting in 2011 to spend a certain portion of premium dollars on patient care, as opposed to administrative costs or profits. The offering of standardized plans through the Exchange will make it easier for people to comparison shop, which should spur competition and possibly lower premiums.

In other areas, the law calls for reforming payment policies in Medicare, including reducing payments to Medicare managed care plans, known as Medicare Advantage plans, and slowing annual payment increases for other providers, as well as reducing payments to providers for avoidable complications, such as hospital-acquired infections and readmissions. It will test new delivery system models that will be designed to provide higher quality care more efficiently. 48Financing Health Reform, 2010-2019

Total Cost = $938 BillionSavings to Federal Deficit = $124 BillionSource: Congressional Budget Office, 2010Federal savingsNew revenuesReturn to KaiserEDU TutorialsAccording to the CBO, the health reform law will cost 938 billion dollars over 10 years from 2010 to 2019. The cost stem largely from expanding Medicaid and providing premium subsidies for individuals in the exchanges. It is paid for in a combination of savings to existing federal programs, mainly the Medicare program and new revenues. Some of the more significant savings provisions include reductions to payments to Medicare management care plans and smaller annual increases in payments to other providers. The law also creates a new independent payment advisory board that is charged with limiting overall growth in Medicare spending. As more people gain insurance coverage, Medicare and Medicaid will reduce payments to hospitals for the uncompensated care they provide. The new revenues are generated primarily through taxes. The law imposes new fees on health insurers, drug makers, and a lot of medical devices and indoor tanning services. Higher income earners, individuals with income greater than $200,000, and couples making more than $250,000 will face an increase in the Medicare tax on earnings and a new Medicare tax on unearned income. Beginning in 2018, high cost health plans will become subject to a new tax. 49Health Reform Implementation Timeline

Return to KaiserEDU TutorialsAs difficult as the debate over the health reform legislation was, many people agree that passing a bill was easy compared to the very challenging task of implementing the law.

Health reform will be implemented over the next several years. A number of health insurance improvements, including allowing young adults to remain on their parents health insurance policies, eliminating lifetime limits and restricting annual limits on coverage, and prohibiting denials of coverage to children with pre-existing medical conditions go into effect this year. Still, the major coverage expansions and significant reforms to the health insurance markets that will guaranteed access to coverage for everyone wont be implemented until 2014. The many delivery system changes will occur between now and 2014.

50Future of Health Reform: Legislation Is Just the BeginningImplementation will be challengingGuidance and federal oversight neededResources for infrastructure and capacity buildingPolicy and political challengesHealth reform provides opportunities to improve our health care systemReduce the number of people who are uninsuredMake the health insurance system work better for all consumersTransform delivery and payment systems to get better valueReorient health care to focus on prevention and primary care

Return to KaiserEDU TutorialsThe challenge of transforming our health care system, which represents 1/6 of our economy is daunting. It will require guidance from the federal government to explain how the law will be implemented as well as to provide oversight to ensure that implementation is proceeding as expected. Key stakeholders, including states, health plans, employers, and providers must commit to making the necessary changes. Resources to build infrastructure and to expand provider capacity will be needed. And, all of this will be done in the face of stiff political opposition.

Despite the challenges, if we can get it right, health reform provides an opportunity to really transform our health care system so that it works better for all of us.

51Is the ACA constitutional?US Supreme Court June 2012Individual mandate constitutionalCannot require states to expand MedicaidPending ACA and abortionMarch 25 Hobby Lobby Should owners of private for-profit companies be exempt from requirement to cover contraception if owners object?

http://mediamatters.org/research/2014/01/03/right-wing-media-revive-myth-that-aca-birth-con/197422http://www.guttmacher.org/media/inthenews/2014/01/31/index.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Guttmacher+(New+from+the+Guttmacher+Institute)http://www.usnews.com/opinion/blogs/laura-chapin/2013/12/06/why-the-hobby-lobby-supreme-court-case-is-so-dangerous

52Myths about the ACADeath panelsForces individuals to pay for abortionWill cost 2.5 million jobsUnpopularA rose by any other name?Obamacare is unpopular, not ACA or its provisionsResourcesKaiser Family Foundation: http://healthreform.kff.org/New DHHS consumer website: http://healthcare.gov/ Alliance for Health Reform: http://www.allhealth.org/ National Association of Insurance Commissioners: http://www.naic.org National Governors Association: http://www.nga.orgAdditional KaiserEDU tutorials:Health Care Reform: A Retrospective:http://www.kaiseredu.org/tutorials/retrospective-health-reform/player.html Health Reform: How Will Medicaid Change?:http://www.kaiseredu.org/tutorials/medicaid-and-health-reform/player.htmlHealth Reform and Medicare:http://www.kaiseredu.org/tutorials/Medicare-and-health-reform/player.html

Return to KaiserEDU TutorialsIm glad youve taken the time to learn more about the new health reform law and I hope youve found this tutorial useful. If you would like more information on provisions of the law and its implementation, I would suggest these additional resources. Thank you.54Chart10.570.110.120.190.560.180.180.08

UninsuredUninsuredEmployer-SponsoredInsuranceMedicaid/CHIPMedicaid/CHIPPrivate Non-group/OtherEmployer-SponsoredInsuranceExchanges/Private Non-group/OtherUninsuredMedicaid/CHIPPrivate Non-group/OtherEmployer-Sponsored Insurance

Sheet1Without Health ReformWith Health ReformEmployer-Sponsored Insurance57%56%Private Non-group/Other11%18%Medicaid/CHIP12%18%Uninsured19%8%

Chart13322836966921010732152

SalesMedicare Advantage reductions, $332 BIndependent Payment Advisory Board, $28 BUncompensated care reductions, $36 BOther savings, $96 BIndividual and employer penalty payments, $69 BMedicare tax, $210 BHealth industry fees, $107 BHigh-cost insurance tax, $32 BOther revenues, $152 B

Sheet1SalesMedicare Advantage reductions$332Independent Payment Advisory Board$28Uncompensated care reductions$36Other savings$96Individual and Employer Penalty Payments$69Medicare tax$210Health industry fees$107High-cost insurance tax$32Other revenues$152