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Update on Health Reform

Grace-Marie TurnerMay 8, 2013PNC HealthCare 2013 Spring Healthcare Advisory BoardPhiladelphia

Americans agreed on goals for health reform…

• The U.S. needs health reform to:– make coverage more affordable– assure quality, and– expand access to insurance

• Most people rate their own coverage as good or excellent

• They want stability. Change was for others.

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but many say the ACA changes too much

• 36% of Americans now view the Affordable Care Act favorably

• 42% view the law unfavorably

• Cost continues to be the biggest concern

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Kaiser Health Tracking Poll, February 2013. http://www.kff.org/kaiserpolls/upload/8251-F.pdf

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Americans’ views of health law after Supreme Court decision

• Americans say it will make things worse rather than better for – taxpayers

– businesses

– doctors

– and those who currently have health insurance.

Sources: “Americans: Healthcare Law Helps Some, Hurts Others ,” Gallup, July 16, 2012, http://www.gallup.com/poll/155726/Americans-Healthcare-Law-Helps-Hurts-Others.aspx?utm_source=add%2Bthis&utm_medium=addthis.com&utm_campaign=sharing#.UARkmBS6osE.twitter. The New York Times/CBS News Poll, July 11-16, 2012, http://s3.documentcloud.org/documents/402362/jul12a-ocr.pdf. “Kaiser Health Tracking Poll,” The Kaiser Family Foundation, July 2012, http://www.kff.org/kaiserpolls/upload/8339-C.pdf

Why the ACA isn’t settled

38% of Americans supported the law in the last major poll before the November elections

Of the 50.6% who voted for President Obama…

12% said they wanted the law repealed

The election was not about health reform

Source: “Kaiser Health Tracking Poll: October 2012,” The Henry J. Kaiser Family Foundation, October 31, 2012, http://www.kff.org/kaiserpolls/8381.cfm.

NOTE: Don’t know/Refused answers not shown.SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted March 5-10, 2013)

Majority Say They Don’t Understand How ACA Will Impact Them, Including

Two-Thirds of Uninsured and Low-Income

Do you feel you have enough information about the health reform law to understand how it will impact you personally, or not?

30%

33%

41%

68%

67%

57%

Household income lessthan $40,000

Uninsured (under age 65)

Total

Yes, have enough information No, do not have enough information

Source: Avik Roy, “Fact-Checking the Obama Campaign's Defense of its $716 Billion Cut to Medicare,” Forbes: The Apothecary, August 16, 2012, http://www.forbes.com/sites/aroy/2012/08/16/fact-checking-the-obama-campaigns-defense-of-its-716-billion-cut-to-medicare/.

The health law in one graph

The paperwork maze

Courtesy of The Wall Street Journal at www.opinionjournal.com

Source: Sarah Kliff, “Is ObamaCare too much work for the Obama administration?” The Washington Post, November 12, 2012, http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/12/is-obamacare-too-much-work-for-the-obama-administration/.

An ACA State Exchange

Do you qualify for subsidies?

Source: Sen. John Cornyn, Facebook, March 22, 2013, http://www.facebook.com/photo.php?fbid=10151499130834424&set=a.112318184423.92543.75755694423&type=3&l=83fcd3ca01&permPage=1

The Red Tape Tower

Source: “Health Reform Poses Biggest Challenges to Companies with the Most Part-Time and Low-Paid Employees,” Mercer LLC, August 8, 2012, http://www.mercer.com/press-releases/1472805.

Mercer: Employers planning workforce changesw Mercer study on what employers expect

SCOTUS Success Boot Camp

Employers and health coverage

1. Employers with <50 FTE EE’s have no 3k/2k penalty

2. But employers offering qualified and affordable coverage may actually be hurting their employees

Example

Generous Subsidies in ExchangesExamples:

• A person earning $42,000 a year with a family of 4 qualifies for $14,759 in new health insurance subsidies

• A single person earning $20,600 qualifies for $5,156 in new health insurance subsidies

But only if employer doesn’t offer coverage or if it’s not “affordable” (ie costs >9.5% of income)

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Cost of Insurance, Family of 4

Impact of new rating rules

James T. O’Connor, Milliman, for America’s Health Insurance Plans. Comprehensive Assessment of ACA Factors That Will Affect Individual Market Premiums in 2014. http://www.ahip.org/MillimanReportACA2013/ Accessed 4-26-13

New and higher Taxes

Source: Philip Dittmer and William McBride, “Obamacare's New Taxes, And How You May Be Affected,” Tax Foundation, July 5, 2012, http://taxfoundation.org/blog/obamacares-new-taxes-and-how-you-may-be-affected.

More new and higher Taxes

Source: Philip Dittmer and William McBride, “Obamacare's New Taxes, And How You May Be Affected,” Tax Foundation, July 5, 2012, http://taxfoundation.org/blog/obamacares-new-taxes-and-how-you-may-be-affected.

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Some realities:

What we know for sure

• CHOICE: Americans value innovation, diversity and choice to accommodate 300 million people

• VALUE IN HEALTH SPENDING: To realize the promise of personalized medicine and achieve overall cost saving, break down payment silos

• FOCUS ON THE PATIENT: They want doctors and patients, not government, to make health care decisions

A market-based solution“Defined contributions” for health coverage

A system that puts doctors and patients in charge of medical decisions

Restructuring financing for a 21st century health sector

• Medicare

• Medicaid

• Private Insurance

States have a big role

Seek ways improve their markets

• Enhance competition for more choices of affordable coverage

• Better safety net with functional high-risk pools

• Private exchanges?

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Health insurance market

2013 questions

• Will Exchanges be ready by Oct 1?

• Will there be bi-partisan support for delay?

• Will people enroll after they see cost?

• Will the number of uninsured be higher as people understand guaranteed issue?

• Will private exchanges fill a market need?

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Europeans moving toward patient-centered care/decentralization

• Consumerism

• Value of private enterprise and competition

• Doctor-patient relationship

• Decentralized decision-making

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The future?• The global move toward

consumerism is real, driven by greater patient demand for more control over decisions.

• People will seek more affordable options outside the ACA’s centralized control.

A not-for-profit health and tax policy research organization

/GalenInstitutewww.galen.org

Grace-Marie Turner

Galen Institute

703-299-8900

gracemarie@galen.org

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