Major Health Issues

The Affordable Healthcare Act

Introduction

• Costs- US per capita is 2x costs in other industrialized nations

• Recent years increasing 6-9% per year• Approximately 20% of US economy

Can the average Mississippi family afford healthcare?

• Family of four in Mississippi estimated cost is $15,000

• What drives the cost?– Technology - excessive use– Aging population– Overutilization – duplication of services– Excess Administrative costs

Can the average Mississippi family afford healthcare?

• Driving Cost cont’d– Waste and Fraud – Overuse of Emergency Rooms– Defensive Medicine– Fee for Service System –Over utilization– Insurance Coverage

MillimanState & Federal Federal State

Moderate Participation $13,901 $12,635 $1,267

320,000 + Enrollees

Kaiser

320,000 + Enrollees $10,294 $9,865 $429

*Reflects State savings for

several groups under ACA

Urban Institute

$15,832 $14,805 $1,027

*State Spending increases 13%+

over a 9 year span versus

existing program.

(Most of the Increase is in years 2016-2020)

Access

• The UNinsured– 40-50 Million in the US– 500,000+ in Mississippi

• The UNDERinsured

Access

• Other Factors– Knowledge– Culture– Poverty– Disparity – Racial – Economic

Quality

• Significant variability• Process Issues• Many preventable and avoidable errors– 80-100,000 Excessive deaths per year

• Evidence Based Medicine• Centers of Excellence– Mayo’s– Cleveland Clinic

The Affordable Healthcare Act

• Battle over Single Payer vs. Multiple Payer System

• Builds on Existing System– Government Plans – Healthcare Insurance Plan

• Strengthens Health Insurance– Regulation – Consumer Protection- Placed on

States

The Affordable Healthcare Act

• Emphasis on Prevention – Wellness• Goal of Universal Coverage– Improve Access– Lower overall costs

• Reduce Misuse of Emergency Rooms• Promote the “Medical” Home

Major Provisions

• Phased in over Several Years

Access

• Medicaid Expansion– Covers all under 133% of the Federal Poverty Line– Estimates for Mississippi are an additional 200-

300,000– Who are largely adults without children– Why not covered now– State and Federal Funding

Access

• Medicaid Expansion cont’d– Funding• No Match for 3 years• 5% to 10% for years 2017-2020• 10% Capped after 2020• Very Attractive to Mississippi• Economically Important

Premium Support

• Tax Credits for individuals to purchase health insurance

• Above 133% of the poverty line for individual health insurance

• Estimates 200,000+ in Mississippi

Premium Support

• Will enable uninsured individuals 133% to 400% above the poverty income level to afford insurance – no premium > 10% annual income

• Economic Impact – No state match the average subsidy will be < $5,000

Regulatory Reform

• Accept all applications• No rejections for preexisting conditions• Increase payment for primary care• Under the age of 26 may continue on parents

plan if no other access to a group plan• Remove Annual Caps -Rescissions

Mandates Coverage For All

• Individual or group plans• Penalty if not offered or purchased• Mandates all large employer groups must

provide coverage or pay penalty• Small employers are provided tax credits for

employee coverage• Employers of early retirees age 55-64 may

reduce premium costs through reinsurance

Costs• Medical Effectiveness Studies• Support for Health Information Systems– Computerized health records– Standardized health insurance claim forms– Standardized definitions for procedures– Systems for providers to exchange information

• Health Insurance Exchanges– A marketplace in each state for the uninsured and small

employers to compare health insurance plans and prices as well as purchase coverage

– Also determines eligibility for Medicaid and Premium Support programs

Costs• Sets minimum medical loss ratios for health insurance plans• Expansion of Community Health Centers• Expansion of preventative services

– Includes governmental plans and private health insurance• Sets limits on amount insurance companies can deduct as expense

items for executive salaries• Independent Payment and Advisory Board (IPAB)

– Sets limits on fees and payments to keep Medicare growth in control– Congress cannot change, if it rejects must substitute to equal cost

reductions of (IPAB)• Accountable Care Organizations• Supports projects to change Medicare payments for primary care

services somewhat like DRG’s for hospitals

Funding HCR• Individuals with earned income greater than $200,000

per year ($250,000 joint filers) will have a .9% increase in Medicare tax

• Same individuals or joint filers as above an additional 3.8% Medicare tax on investment income, dividends, capital gains, rents, and passive income

• Excise tax on high cost employer sponsored plans– Premiums > $10,200 for individuals and $27,500 for

families• Increased taxes on drug companies, health insurance

companies and other health related companies• Estimated cost through 2020 $800 Billion

Questions?