the affordable care act (obamacare) and the single payer alternative leonard rodberg professor and...
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The Affordable Care Act (Obamacare)
and the Single Payer Alternative
Leonard Rodberg
Professor and Chair, Urban Studies Department, Queens College
andResearch Director, NY Metro Chapter,
Physicians for a National Health Program
November 2015
The Affordable Care Act 2010“A f***** big deal” – Joe Biden
Yes, more people have insurance
…and Millions Are Still Uninsured Millions
Note: The uninsured include about 5 million undocumented immigrants. Source: Congressional Budget Office.
51 51 51 52 53 53 5451
2323232328
35
50 50
0
20
40
60
80
2012 2013 2014 2015 2016 2017 2018 2019
Pre-ACA ACA (Projected)
* Estimate is statistically different from estimate for the previous year shown (p<.05).
SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2014.
Why Health Care Was On the Agenda: Escalating Cost
…and costs are still out of control
While…• Millions still have no coverage.• High deductibles and co-pays keep those
with coverage from actually using it.• Billing-related administrative waste still
consumes 20-30% of our health care dollar.
What the Affordable Care Act (Obamacare) Did:
It established the principle that the federal government has the responsibility to see that everyone has access to health care.
What It Didn’t Do:It failed to achieve either cost control or universal access.
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USFRSWIZGERCANNETHNZDENSWEUKNORAUS
Total health expenditures as percent of GDP
Source: OECD Health Data 2010 (Oct. 2010).
It doesn’t have to be this way. Every other country covers all their citizens,
and spends half of what we do.
What Makes the Difference?Unlike in the US -- in these countries
government has a central role in• Funding the system• Overseeing and regulating it.
Our own Medicare program for seniors shows the benefits of a government-funded, regulated system • Reliable financing• Slower cost growth• Transparent coverage decisions.
Most Americans Get Their Coverage from the Private Sector…
Medicare
Medicaid
Military
Uninsured
Individual Private
Insurance
Employer-based Private
Insurance
Source: Health Insurance Coverage in the United States: 2013, Census Bureau, 2014
(169.0 million)
(49.0 million)
(54.1 million)
(42.0 million)
(34.5 million)
(14.1 million)
State and Local Govt (existing Medicaid, other)
13%Other private funds (charity, etc.)7%
Federal tax subsidy9%
Private Insurance25% Federal Government
(existing Medicare, Medicaid, other)
34%
Out-of-pocket12%
But Most of the Money Comes from the Public Sector
Out of pocket 12%
Other private funds (charity, etc.) 7%
State and Local Government(existing Medicaid, other) 13%
Federal Government(existing Medicare, Medicaid, other) 34%
Source: Health Affairs, Feb. 2010; data for 2009
Private Insurance 34%
(Federal tax subsidy)
In Deciding on a Plan,the President Made a Fateful Choice• He could have chosen to
(1) build on the public sector, which now
provides more than half the money, or
(2) expand the private sector.• He chose to build his program by
(1) enlarging Medicaid for the poor, and
(2) expanding private insurance for the rest of us
The New Reform Plan: Affordable Care Act (ACA)
• Continued reliance on private insurance• Employment-based insurance unchanged • Market competition determines
premiums, co-pays, and deductibles• Experimental pilot programs try to
reduce costsResult: About 10% of the population will
get covered, the rest will see little change.
• Starting in 2014, online insurance “marketplaces” offer private insurance to individuals and employers
• Citizens and legal immigrants required to purchase private insurance or sign up for Medicaid.
• Premium subsidies up to 400% poverty level • Medicaid for all below 138% poverty level• “Hardship waiver” if premium too expensive
can remain uninsured!
Affordable Care Act or ACA:The Health Reform Law of the Land
Underinsurance is Now the Norm
What’s Covered
… and Costs Keep On Rising
$0.0
$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
ACA (CMS Actuary)
Current projection
ACA (Commonwealth Fund)
National Health Expenditures (trillions)
Notes: * Modified current projection estimates national health spending when corrected to reflect underutilization of services by previously uninsured. Source: D. M. Cutler, K. Davis, and K. Stremikis, Why Health Reform Will Bend the Cost Curve, Center for American Progress and The Commonwealth Fund, December 2009. Estimated Financial Effects of PPACA as Amended, Richard Foster, CMS Actuary, April 2010
$4.67$4.5
6.4% annual growth
6.6% annual growth
6.0% annual growth
$4.7
National Health Expenditures as Percent of GDP 17.8 17.9 18.0 18.2 18.8 19.3 19.8 20.2 20.5 21.0
Principal Consequences
• Little change for most people
• Those using the marketplaces face costly premiums, deductibles and copays and limited choice of doctors and hospitals
• Millions remain uninsured and underinsured
• Costs continue to rise
How Canadians Get Health Care• Provinces pay for all health care, with
federal government contributing a “single payer” system• No co-pays or deductibles• Doctors bill the province once a month• Hospitals receive an annual budget• Funded through federal and provincial
taxesResult: 100% of the population covered,
spend 10% of GDP on health care
The Public Route to Health Care Reform: Conyers’ Expanded and Improved Medicare for All Single Payer HR 676
• Extend Medicare to cover everyone• Comprehensive benefits, free choice of provider• No cost-sharing (no deductibles, no co-pays)• Public agency pays the bills• Funded through progressive taxes• Costs no more than we are now spending
Single PayerReform in New York State: Gottfried-Perkins
New York Health BillUniversal coverage: everybody in, nobody out!
• Comprehensive benefits• No co-pays or deductibles • Free choice of doctor and hospital• All payments from a single state fund• Covering everyone while spending less
Who Would Be Eligible?• Every resident of New York State• No barriers due to age, sex, income,
employment, or health status• No premiums• No co-pays• No deductibles
New York Health #1
Comprehensive Benefits• Primary and preventive care• Inpatient and outpatient hospital care• Care coordinator assists in navigating the
system, receiving necessary care• Prescription drugs• Dental, vision, & hearing care• Free choice of doctor, including primary
care physician & specialists, and hospital
New York Health #2
New York Health #3
Who Will Run It?• Administered by NYS Dept of Health• Overseen by broadly-representative Board of Trustees including consumers and providers
How Will It Be Paid For?• Insurance premiums eliminated• Graduated payroll assessment, 80%/20% paid
by employer/employee• Graduated assessment on upper-bracket non-
wage income (dividends, rents, capital gains)• Federal funds from Medicare, Medicaid, ACA
(needs Federal waiver in 2017) • All funds placed in NY Health Trust Fund
New York Health #4
Medical Care Administration
9%
Insurer Billing8%
Other Insurer Costs and Profit
11%
Hospital Billing4%
Medical Care64%
Physician Billing 5%
Source: James G. Kahn et al, The Cost of Health Insurance Administration in California: Estimates for Insurers, Physicians, and Hospitals, Health Affairs, 2005
Allocation of Spending for Hospital and Physician Care Paid through Private Insurers
Big Savings from Unified System:Billing and insurance overhead now
consume nearly 30 cents of every dollar
28%
Spending throughprivate insurers
Covering Everyone while Saving Money!
Additional costs
Covering the uninsured and poorly-insured +1.4%
Elimination of cost-sharing and co-pays +3.9%
Enhanced Medicare & Medicaid fees +3.8%
Savings
Reduced insurance administrative costs -9.9%
Reduced physician & hospital admin costs -7.2%
Bulk purchasing of drugs & devices -5.7%
Reduced fraud -1.9%
Source: Economic Analysis of the NY Health Act, Gerald Friedman, April 2015
4.011.210.826.0 -28.6
-20.7
-16.3
- 5.4 -71.0
2019 $B
Total Costs +9.1%
Total Savings -24.7% Net Savings -15.6% - 45
How to Pay for It
Nearly Everyone Would Save Money
Mexican Universal Health Care
https://www.youtube.com/v/N938k6lIugY