the case for health reform in the u.s
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The Case for Health Reform in the U.S. Gerald F. Kominski, Ph.D. Professor, Department of Health Services UCLA School of Public Health Associate Director, UCLA Center for Health Policy Research October 7, 2009. The Growth of Private Insurance 1929-1960. - PowerPoint PPT PresentationTRANSCRIPT
The Case for Health Reform in the U.S.
Gerald F. Kominski, Ph.D.Professor, Department of Health Services
UCLA School of Public HealthAssociate Director,
UCLA Center for Health Policy ResearchOctober 7, 2009
The Growth of Private Insurance1929-1960
Source: Source Book of Health Insurance Data, 1965.
Where Do Most Americans Get Health Insurance Coverage?
From Their Employer Type of Coverage Number (millions) Percent
Private 202.0 67.5% Employment Based 177.4 59.3% Individual 26.7 8.9%Government 83.0 27.8% Medicare 41.4 13.8% Medicaid 39.6 13.2%Uninsured 45.7 15.3%
Note: Percentages exceed 100% because type of coverage is not mutually exclusive; individuals can have more than one category of coverage.Source: U.S. Census Bureau Analysis of March 2008 Current Population Survey
65% 68% 68% 66% 65% 63%59% 60% 59% 62%
99% 99% 99% 98% 98% 99% 98% 98% 99% 99%
56% 57% 58% 58% 55% 52%47% 48% 45% 49%
0%10%20%30%40%50%60%70%80%90%
100%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
All Small Firms (3-199 Workers)All Large Firms (200 or More Workers)3-9 Workers
Employers Who Offer Health InsuranceA Tale of Two Cities
*Tests found no statistical differences from estimate for the previous year shown (p<.05). Note: Estimates presented in this exhibit are based on the sample of both firms that completed the entire survey and those that answered just one question about whether they offer health benefits. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.
How Much Financial Protection Does Health Insurance Currently Provide?
Not Much, If You Buy Insurance on Your Own, and Have a Low Income
Source: Jacobs K, Capozza K, Roby DH, Kominski GF, Brown ER. Health Coverage Expansion in California: What Can Consumers Afford to Spend? UCLA Center for Health Policy Research, September 2007.
Among those who buy insurance on their own, those in the highest quartile of expenses spend 14% or more of their pre-tax income on health care expenses
Among those who buy insurance on their own and have incomes from 101-200% FPL, those in the highest quartile of expenses spend 30.5% or more of their pre-tax income on health care expenses
The Probability of Being Uninsured Is Substantial Below 300% FPL
44%
71%
27%
11%35% 29%
18% 10%
92%
20%
83%
4%
45%
7%5%
0%
25%
50%
75%
100%
<100% FPL 100-199%FPL
200-299%FPL
300-399%FPL
400%+ FPL
Uninsured
Medicaid/ Other PublicEmployer/ Other Private
NOTE: The federal poverty level (FPL) was $21,203 for a family of four in 2007. Data may not total 100% due to rounding. Nonelderly defined as age 0-64. SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute analysis of March 2008 CPS.
Decrease in Employer Sponsored Insurance
(million)4.6%
National Unemployment Rate Increase
since 2007(from 4.9% in Dec-07 to 9.5% in June-
09)
=4.6 5.0
Medicaid /CHIP
Enrollment Increase(million)
Uninsured Increase(million)
&
11.3
Note: Totals may not sum due to rounding and other coverage.Source: John Holahan and Bowen Garrett, Rising Unemployment, Medicaid, and the Uninsured, prepared for the Kaiser Commission on Medicaid and the Uninsured, January 2009.
Impact of the Rise in Unemployment on Health Coverage, 2007 to 2009
Sources of Financing, 2007Total Health Expenditures - $7,421 per Capita
16.2% of GDP
Out-of-Pocket
12%Private
Insurance35%
Other Private
7%
Medicare19%
Medicaid15%
Other Public12%
Private54%
Public46%
Source: Hartman M, et al., National Health Spending in 2007: Slower Drug Spending Contributes to Lowest Rate of Overall Growth Since 1998, Health Affairs 2009;28(1):246-261.
Low-Income Subsidy Payments
Payments to Union/ Employer-Sponsored Plans
1%
Other Part B Benefits
Payments to Drug Plans
Hospital Outpatient
Hospital Inpatient
Skilled Nursing Facilities
Hospice3%
Medicare Advantage (Part C)
Physicians and Other Suppliers
Home Health
Total = $484 billionNOTE: Does not include administrative expenses such as spending for implementation of the Medicare drug benefit and the Medicare Advantage program. Total is net of $9.4 billion in recoveries for 2009 .SOURCE: Congressional Budget Office, Medicare Baseline, March 2009.
Medicare Benefit Payments, by Type of Service, 2009 Part A Part B Part D Part A and B
19%
4%23%
5%
28%
4%6%4%
5%
Average Payments to Medicare Advantage Plans Relative to Traditional Fee-for-Service Medicare, 2009
114%113%
118%
112%
118%
116%
All MedicareAdvantage
Plans
Local HMOs Local PPOs RegionalPPOs
Private Fee-For-Service
Plans
SpecialNeeds Plans
SOURCE: Medicare Payment Advisory Commission, March 2009.
Medicare Advantage Plan Types
Traditional Fee-for-Service Medicare = 100%
Medicaid Expenditures by Service, 2007
Total = $319.7 billionNOTE: Total may not add to 100% due to rounding. Excludes administrative spending, adjustments and payments to the territories.SOURCE: Urban Institute estimates based on data from CMS (Form 64), prepared for the Kaiser Commission on Medicaid and the Uninsured.
Inpatient 15.0%
Physician/ Lab/ X-ray 3.7%
Outpatient/Clinic 7.4%
Drugs4.7%
Other Acute6.7%
Payments to MCOs 19.0%
Nursing Facilities
14.8%
ICF/MR3.9%
Mental Health1.5%
Home Health and Personal Care
15.0%
Payments to Medicare 3.5%
DSH Payments
5.0%
AcuteCare
59.9%
Long-TermCare
35.1%
23.4%
49.7%
64.6%73.7%
80.3%
96.8%
3.2%0%
20%
40%
60%
80%
100%
Top 1%>$43,289
Top 5%>$14,098
Top 10%>$7,628
Top 15%>$5,274
Top 20%>$3,886
Top 50%>$775
Bottom50%
<$776Percent of Population, Ranked by Health Care Spending
Note: Population is the civilian noninstitutionalized population, including those with no spending. Health care spending is total payments from all sources, excluding health insurance premiums . Source: Kaiser Family Foundation calculations using data from Medical Expenditure Panel Survey (MEPS), 2005.
5% of the Population Accounts for 50% of Spending20% Account for 80%
Perc
ent
of T
otal
Hea
lth
Care
Spe
ndin
g
The U.S. Spends More Than Any Other Nation, Largely Because of Private Insurance
aa
Source: The Commonwealth Fund, calculated from OECD Health Data 2006.
Adjusted for Differences in Cost of Living
International Comparison of Spending on Health, 1980–2006
0
1000
2000
3000
4000
5000
6000
7000
1980 1984 1988 1992 1996 2000 2004
AustraliaCanadaDenmarkFranceGermanyNetherlandsNew ZealandSwedenSwitzerlandUnited KingdomUnited States
Average spending on healthper capita ($US PPP)
4
6
8
10
12
14
16
1980 1984 1988 1992 1996 2000 2004
AustraliaCanadaDenmarkFranceGermanyNetherlandsNew ZealandSwedenSwitzerlandUnited KingdomUnited States
Total expenditures on healthas percent of GDP
Data: OECD Health Data 2008, June 2008.
7681
88 84 89 8999 97
8897
109 106116 115 113
130 134128
115
65 71 71 74 74 77 80 82 82 84 84 90 93 96 101 103 103 104 110
0
50
100
150
Fran
ceJa
pan
Austra
liaSpa
in
Italy
Canad
aNor
wayNeth
erlan
dsSwed
enGre
ece
Austri
aGer
many
Finlan
dNew
Zeala
ndDen
mark
United
King
dom
Irelan
dPor
tuga
lUnit
ed S
tates
1997/98 2002/03
Deaths per 100,000 population*
* Countries’ age-standardized death rates before age 75; including ischemic heart disease, diabetes, stroke, and bacterial infections.See report Appendix B for list of all conditions considered amenable to health care in the analysis.Data: E. Nolte and C. M. McKee, London School of Hygiene and Tropical Medicine analysis of World Health Organization mortality files (Nolte and McKee 2008).
Mortality Amenable to Health Care
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
Patients Reporting Access Problems Because of Costs
4037
58
12
2125 26
0
25
50
NETH UK CAN GER NZ AUS
* Did not get medical care because of cost of doctor’s visit, skipped medical test, treatment, or follow-up because of cost, or did not fill Rx or skipped doses because of cost.AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom.Data: 2005 and 2007 Commonwealth Fund International Health Policy Survey.
2005 2007
United States
Percent of adults who had any of three access problems* in past year because of costs
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
Physicians’ Use of Electronic Medical Records
17
28
9892 89
79
42
23
0
25
50
75
100
NETH NZ UK AUS GER CAN
AUS=Australia; CAN=Canada; GER=Germany; NETH=Netherlands; NZ=New Zealand; UK=United Kingdom.Data: 2001 and 2006 Commonwealth Fund International Health Policy Survey of Physicians.
Percent of primary care physicians using electronic medical records
2001 2006
United States
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2008
Proposed Health ReformKey Elements of H.R. 3200: America’s Affordable Health
Choices Act of 2009
Require all individuals to have health insurance- Those without coverage pay a penalty of 2.5% of modified adjusted
gross income- Exceptions granted for dependents, religious objections, and
financial hardship Require employers to provide coverage to employees or pay
into a Health Insurance Exchange Trust Fund - Employers who do not offer insurance pay up to 8% of payroll- Exceptions for certain small employers, and credits for others to
offset the costs of coverage Expand Medicaid to 133% of the Federal poverty level
- Federal government pays full cost of expanded eligibility for first 5 years
Proposed Health ReformKey Elements of H.R. 3200: America’s Affordable Health
Choices Act of 2009
Create a Health Insurance Exchange for individuals and smaller employers to purchase health coverage- Premium and cost-sharing credits available to individuals/families with
incomes up to 400% of the federal poverty level - Out-of-pocket premium expenses limited based on the following
schedule:• 133-150% FPL: 1.5 - 3% of income• 150-200% FPL: 3 - 5.5% of income• 200-250% FPL: 5.5 - 8% of income• 250-300% FPL: 8 - 10% of income• 300-350% FPL: 10 - 11% of income• 350-400% FPL: 11 - 12% of income
Proposed Health ReformKey Elements of H.R. 3200: America’s Affordable Health
Choices Act of 2009
Impose new regulations on plans participating in the Exchange and in the small group insurance market- Guaranteed issue and renewal (no pre-existing condition
exclusions)- Limit premium variation to age, family status, and market area- Limit non-medical care expenses (medical loss ratios) - Prohibit rescissions, except in cases of clear fraud- Limit annual OOP liability to $5,000 per individual, $10,000 per
family- No lifetime limits on benefits- Create public option with payments based on Medicare
payment rates to foster competition
“Public” Concerns About Health Reform
1. I’m satisfied with my health coverage, so why is major reform necessary?
2. Will it control costs?3. Is it socialized medicine?4. Does it create unfair competition with private insurers?5. Will it produce lower quality care and poorer general
health? Will it ration care?