health care reform 2010

8/6/2009 Prepared by Chuck Kiskaden from StoneTapert 626-233-9180

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Employer’s Forum Discussion on HealthCare Reform - 2009 Changing the Supply and Demand

Curve regarding Health Care The Players Why now instead of under Clinton? Which Model will prevail? What will be the impact on Employers

and Employees? What can you do now to control

costs?


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Supply and Demand Curve


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Supply and Demand Curve

What happens when you change the demand, hold the cost and no change in Supply?


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Employer’s Forum Discussion on HealthCare Reform - 2009

Question – How many children in California are un-insured for basic health care?


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Question – How many children in California are un-insured for basic health care?

683,000


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Paying for Health Care ReformSource Health Care Reserve

Fund ($ in billions) 10 years

FY 2010 Budget $635 - Medicare and Medicaid Savings $309 - Revenues$ $326

Additional Medicare and Medicaid Savings- $313 - Incorporate productivity adjustments into

Medicare payment updates $110- Reduce hospital subsidies for treating

the uninsured as coverage increases$106

- Pay better prices for Medicare Part D drugs $75- Other $22

Total $948


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The Players Employers Employees Unemployed Retired Organized Medicine (Docs, Hospitals,

HMOs, ancillary Providers, Pharma, etc.) For Profit Insurance Companies & HMO’s States Federal Government


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Why Now? Between 2002 and 2009, premiums more

than doubled, increasing 117.5%, while California's overall inflation rate increased 23.1%.

Cost shifting has reached tipping point to trigger federal & state intervention Tipping points are "the levels at which the

momentum for change becomes unstoppable."

$800,000,000,000 in potential savings???


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Plan Design Trends

2007 2009

PPO HMO PPO HMO KP

Co – Pays $10 $20 $ 20 $20/$30 EOA $15

Inpatient Hosp $250/$750 $250 per day $0

Deductible Avg. $364/842 $250 $500 - 1000 250 -1000 $?

Out of Pocket Max

In-Network $2178 $1973 $2000 $1500/$4500 1500/3000

Out of Network $5187 NA $6000 NA NA

Co-Insurance

In-Network 80% 100% 80% 100% 100%

Out of Network 60 -70% 0% 70% 0% 0%


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National Rx Benefit Trends

2005 20072009

Prescriptions (3 Tier)

Generic $ 10 $ 10 $ 10 to $20

Brand $ 23 $ 24 $ 30 (after ded)

Non-Formulary $ 40 $ 50 $ 50 (after ded)

Data Source – National Survey of Employer Sponsored Health Plans


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Macro Cost Shifting


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Pay Full Retail

Macro Cost Shifting


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Pay Full Retail

Best Risks and Underinsured

Macro Cost Shifting


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Pay Full Retail


Poor Risks, Can’t afford Insurance, etc.

Macro Cost Shifting


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Pay Full Retail

Medical paid at $.60 on the dollar


Poor Risks, Can’t afford Insurance, etc.

Macro Cost Shifting


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Why Now?

Health Care costs have doubled in last 8 years

Cost shifting has reached tipping point to trigger federal & state intervention Tipping points are "the levels at which the

momentum for change becomes unstoppable."

$800,000,000,000 in potential savings!


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What Cost Control Options do Employers currently have?

Unavoidable Costs

Cost Sharing (5% to 10%)

Coverage Elections (0% to 15%)

Plan Selection (5% to 10%)

Provider Selection (5% to 10%)

Prescription Therapies (5% to 7.5%)

Disease Management (5% to 10%)

While no silver bullets will solve the health care crisis, aggressive strategies in two to four areas will have a dramatic impact.

While no silver bullets will solve the health care crisis, aggressive strategies in two to four areas will have a dramatic impact.

7.5%5.0%

55.0%

10.0%

5.0%

7.5%

7.5%


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Which Model will Prevail?

Single Payor System Universal Health Care

With Health Care Exchange that includes a Public Plan or Health Care Co-operative

At State Level? (A program like the HIPC?)

At Federal Level?


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Current Bills

HR 3962 Americas Affordable Health For America Act

Proposed Senate Bill “America’s Health Future Act” - HR 3590


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HR 3962 Americas Affordable Health Choices

Act Public Option Pay or Play for employers Guaranteed Coverage (no cherry

picking) Minimum benefit level established Federal and State subsidies

Probably at 400% of Federal Poverty Level Minimum ER contribution levels set (like

SF city regs)


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HR 3962 Americas Affordable Health Choices Act

Immediate Reforms High Risk Pool Ins. Carriers subject to 85% loss ratio

max Dependent coverage up to age 27 Limits on Pre-existing conditions

exclusions Protection for retiree health

Health Insurance Exchange in 2013


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Health Insurance Exchange in 2013 Small employers Groups with 100 employees after three

years Individuals Contracts negotiated with Providers Includes Ins. Plans and Public Option


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Health Insurance Exchange in 2013 No Lifetime or annual limits on coverage No exclusions for pre-existing conditions Age rated products allowed, however with

Ins. Premium ratio limit of 1 to 2 from youngest to oldest.


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Affordable Health Care for America (House bill from Pelosi)

Health Insurance Exchange in 2013 Minimum standard benefit package for

all Preventive care with no cost sharing by

member Mental Health benefits Oral health and Vision for children Caps on annual Out of Pocket costs

($5K/$10K) Creates CLASS – Voluntary LTC plan


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Affordable Health Care for America (House bill from Pelosi)

Sliding Scale Affordability Credits Up to 400% of FPL ($43k and $88K)

Expands M’Caid (Cal) to 150% FPL Improves M’Care

Removes donut hole No cost sharing for preventive services Low income subsidies Improved access to providers


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Individuals not buying med. Insurance will pay penalty of up to 2.5% of annual taxable income

Play or Pay for employers based on taxable payroll

Incentives for more medical students and ancillary medical personnel


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Business Case for Investing in HC Reform

Expanding AccessLowering Health Care Administrative Costs Through a Public-Private Approach to Health Reform

The United States leads all industrialized countries in the

share of national health care expenditures devoted to insurance administration.

Estimated administrative costs would fall from 12.7 percent of claims to an average of 9.4 percent. Savings—as much as $265 billion over 2010–2020—would be realized through less marketing and underwriting, reduced costs of claims administration, less time spent negotiating provider payment rates, and fewer or standardized commissions to insurance brokers.


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Payment ReformHealth Care Payment Reform That Rewards Value, Not Volume

Bundling payments to cover care over a specified period, revising fees to increase compensation for primary care, and offering providers financial incentives to serve as patient-centered medical homes

Quality ImprovementHealth Information Technology Policy Evidence Based Medicine and a Business Case for Health

Information Technology

Business Case for Investing in HC Reform


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NOW – Silos of Payment

Doctors HMO’s

Hospitals

Nursing Homes and ECF’s

$$$

$$$$$$

$$$$$$

$$$$$$


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NOW – Silos of Payment

Doctors HMO’s

Hospitals


$$$

$$$$$$

$$$$$$

$$$$$$


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FUTURE? Bundled payment

Doctors HMO’s

Hospitals


$$$


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Proposed Senate Bill America’s Health Future Act –

HR 3590

$849 billion in cost (over 10 years) $127 Billion decrease in National

Debt over next 10 years and $600 billion in following decade


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Proposed Senate Bill America’s Health Future Act –

HR 3590 Mandates that everyone buy HC Insurance

(like auto in CA) with financial penalty for failure to do so

Insurance Exchanges established to provide selected individuals and families with subsidies (100 to 400% of FPL)

Start up funds to create CO-Ops Significantly expand M’Caid eligibility (up to

133% of FPL) Expands state liabilities by $33B

Reduce growth of M’Care reimbursement to providers and eliminate subsidies for Medicare Advantage HMO plans


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Proposed Senate Bill “America’s Health Future Act”

– HR 3590

Impose exise tax on Ins “Cadillac” Plans with high premiums

40% on excess of $8000 (single) and $21000 (family) per year

Tax credits for small employers to cover employees

Other changes to M’Care, M’Caid and the tax code Affects employers with 50+ employees.

Penalty for not providing insurance coverage ($750) Penalty if employees have to pay more than 10% of their

salary for insurance Increase in M’Care payroll tax (=.5%) to 1.95%


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What can you do today to manage health care costs?

Ideas on how to lower HC Costs


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Improving employees Lives

• Improving Work/Life Cycle

• Being a catalyst for Wellness

• Employee/dependents Health Care education

Seeking Synergy in Managing Employee Benefits!!!


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Employee Benefits Cost Control

• Plan Design

• Utilization Management

• Risk Management Data Reports



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Employers “In Control”• Improving Work/Life Cycle

• Plan Design

• Being a catalyst for Wellness

• Utilization Management

• Employee/dependents Health Care education

• Risk Management Data Reports



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Information and Data Sources


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Health Care Reform Web Sites commonwealthfund.org/ healthreform.gov/ mailmanschool.org/facultypubs/

womenshealthcarereform.pdf whitehouse.gov/assets/documents/

CEA_Health_Care_Report.pdf reuters.com/article/healthNews/

idUSTRE56K01720090721 hudson.org/files/documents/

20090612_JB_Kuttner_longterm_fiscal_impact_health_reform.pdf


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http://randcompare.org/http://randcompare.org/current/http://randcompare.org/options/http://randcompare.org/options/mechanism/refundable_tax_credit http://randcompare.org/options/mechanism/purchasing_pools

Massachusetts “Health Care Connector”http://randcompare.org/options/mechanism/employer_mandate

Pay or Play explainedMandates (Cal, Or, WA passed and subs

repealed)Hawaii 1974Mass 2006

Health Care Reform Web Sites


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Health Care Web Sites


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Medical Info/Research www.medem.com - modern medical library www.ncqa.com - Nat'l Committee on Qual.

Assurance www.doctorsolve.com/ - Info on drugs in Canada www.coverfingtheuninsured.org www.insureusa.org http://www.prevent.org/ - information on disease

prevention and health promotion policies and practices

www.cmwf.org/index.htm - Commonwealth Fund


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Employee Empowerment & Health Wellness

www.4women.gov - Nat'l Women’s Health site www.ivanhoe.com - Medical Breakthroughs http://vm.cfsan.fda.gov - US FDA Food Safety Ctr. www.healthyroads.com – ASHP wellness product www.new.chcf.org - Cal Health Care Fndn www.mrmib.ca.gov – MRMIB http://www.opa.ca.gov/report_card/. - Cal Office of

Patient Advocate www.healthcarecoach.com/ www.mayoclinic.com http://www.doclopedia.com- Use doclopedia to

put your medical history, prescriptions, and bills in one convenient space for FREE


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Employee Empowerment & Health Wellness

http://www.hhs.gov/transparency/ - The “Four” Value Driven Health Care Principles. Health care transparency provides consumers with the information necessary, and the incentive, to choose health care providers based on value.

www.netwellness.org – 100 health topics to find in-depth information on hundreds of diseases and wellness issues

http://www.insureuonline.org/ - The National Association of Insurance Commissioners (NAIC) has created the Insure U — Get Smart About Insurance program to help consumers make educated decisions.

www.organizedwisdom.com - OrganizedWisdom is a collaborative health information community, combining professional and user-generated health content with social networking technologies to help people make the most informed health decisions possible.


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Provider/Health Plan Report Cards www.healthscope.org www.lumetra.org - dedicated to measurably

improving the quality, safety, and integrity of healthcare.

www.aahp.org - Amer Assn of Health Plans www.chcf.org – California Health Care

Foundation www.healthcarecoverageguide.org – Cal

Health Care Foundation web site www.guiadecoberturadesalud.org – CHCF

hispanic site for small employers www. benefitscheckup.org/


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Government Web Sites www.cdc.gov - Center for Disease Control www.medlineplus.gov www.medicare.gov/ - info on Part D drug plans www.leginfo.ca.go - Cal ins code www.dmhc.ca.gov - Dept Managed Health

Care www.mrmib.org – High Risk Ins pools


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Insurance / Employer Purchasing www.pbgh.org - Pacific Business Group on Health www.calchoice.com – Small employer purchasing pool

www.ibenefits.com www.bizjournals.com www.definedcare.com - Defined Care Website www.egroupbenefits.com http://www.healthsmart.org/ - Practical health care

information brought to you as a service from the National Business Coalition on Health.

http://www.nbch.org/members/members.cfm - List of Business Coalitions by state


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Info for HR Specialists www.smartbrief.com - AAHP Smartbrief www.benefitsalert.com - ER benefits legal news www.mcol.com [email protected] - Email newsletter http://www.lifemasters.com/ - An internet site to

help employers access disease management information

www.ncqucalculator.com www.healthleaders.com - stock site www.allbusiness.com - small bus resources


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health care reform 2010

Documents

affordable health care

health care exchange

health care costs

basic health care

health care cooperative

health care crisis

macro cost

employers forum discussion