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TAG Health January Presentation
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Transcript of TAG Health January Presentation
Health Care ReformOverviewProviders’ ViewEmployers’ ViewWhat we all need to watch
William Custer, PhDPatricia Ketsche, PhDInstitute of Health Administration, GSU
Agenda
• Overview of reform
• What does it mean for providers?
• What does it mean for employers?
• What we need to watch
Total National Health Expenditures:$’s and as Share of GDP
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Perc
en
t
$
National Health Expenditures Percent of GDP
The Employment-Based Coverage System is Eroding
60%
65%
70%
75%
80%
5%
10%
15%
20%
25%
30%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Uninsured Total Public Total Private
ESI Benefits Limited for Small Firms
Source: Tabulations of the March supplement to the Census Bureau’s Current Population Survey for 2002 and 2010
Percentage of Uninsured by Firm Size of Family Head
Nonworker Under 10 10 to 24 25 to 99 100 to 999 1000+ 0%
5%
10%
15%
20%
25%
30%
35%
40%
2009
2002
Overview of Reform: Major Change Components• Medicaid Expansion
• Changes in Private Coverage
• Improving Health Care Quality
• Focus on Health
Major Change Component: Medicaid Expands Eligibility (2014)• From “Poor AND….” to “Poor”
– Everyone under 133% poverty eligible• In 2010 ~$20,000 for family of 2
– Federal Gov’t pays for the expansion through 2016• Phase in state payments of 10% for newly eligible
Major Change Component Private Coverage Changes 2010-2013• Insurance regulation
– Expansions for children (no pre-existing conditions) & young adults
– Rate reviews– Preventive Care– No lifetime/limited
annual benefit caps– Medical Loss Ratio
• Small Employer Tax Credits– Targeted to low wage,
smaller firms– Offset portion of
premiums paid– Even available to NP
Major Change Component: Private Coverage Changes 2014• Community Rating• Health Insurance Exchanges
– Individuals– Small employers
• Individual Mandate– Subsidies for those without employer coverage
• “Pay or Play” for employers with 50+ workers
Overview of Reform: More Americans with health insurance coverage
Remaining UninsuredOver • Non-citizens (25-35%)• Low income populations (100-250% FPL)
– High income volatility– Frequent moves between Medicaid and
insurance subsidy categories• Remaining uninsured are likely to be younger
and healthier than those currently uninsured
Overview of Reform: Financing
Fees, Taxes and Penalties
Medicaid
Insurance Premium SubsidiesMedicare Savings
+/- 1 trillion +/- 1 trillion
Major Change Component:Improving Health Care Quality• Information
– Focus on collecting, sharing and using• Coordinated Care
– Focus on integration• Pay for provider quality
– Bonuses– Penalties
Major Change Component:Focus on Heath• National health strategy council
– Research & public health innovation– Mandatory preventive care benefits
• Funding for state/community based wellness initiatives
Provider View
• Payer mix changes
• Payment changes
• Regulatory changes
Providers: Payer mix changes More Georgians with health insurance coverage
Source of coverageNow
Fully Implemented Change
Employer 57% 54% -3%
Individual Private 4% 2% -2%
Other 8% 8% None
Medicaid/CHIP 12% 17% +5%
Uninsured 19% 5% -14%
Exchange 0% 14% +14%
Providers: Payment Changes
• Incentives for integration– Accountable Care Organizations– Bundled payments– Incentives for Medical Homes
• Value based purchasing– Reimbursement tied to quality– Expanded beyond inpatient hospitalizations
Providers: Payment Changes
• Rate cuts – Reduced Medicare Advantage payments– Reduction in update formula – Cuts to DSH funding
• Infrastructure for future payment innovation– Center for Medicare and Medicaid Innovation– Independent Medicare Payment Advisory Board
Providers: Regulatory Changes to promote transparency & oversight
Transparency Oversight
Financial Relationships Limits on Physician Ownership of hospitals
Publication of Charges Strong Fraud and Abuse Provisions
Community Needs Assessments
Expansion of RAC audits
Enhanced Data Collection & Reporting Requirements
Employer View
• Why an employer focus
• What does it mean for employers right now?
• Employer implications depend on size
Why an Employer Sponsored System?• Risk pools → stabilize premiums• ↓administrative costs• Purchasing expertise in HR• Tax exclusion of premiums • Over $250 billion in subsidy of private
coverageBUT…….
Affordability
• Declining participation rates• Employers shifting more cost to workers:• Increases since 2005:
– Inflation 12%– Wages 18 % – Overall premiums 27 % – Employee contributions 47%
Source: Kaiser HRET Survey
What Does Reform Mean for Employers Now?• 2010 Changes
– Add in dependents < 27– Eliminate lifetime and
annual benefit limits – Eliminate pre-ex
restrictions for children– Cover preventive case
without cost sharing• Exemption:
Grandfathered plans
• 2011 changes– Limits on use of FSA/HSA
for OTC medications– Report value of health
care benefits on W-2
• 2012 changes– Additional 1099
reporting
<25 Employees
<25 Employees
<50Employees
<50Employees
>50 Employees
>50 Employees
>200 Employees
>200 Employees
Employer Implications Depend upon Number of Workers (FTEs)
<25 Employees
<25 Employees
Tax Credits
• Full Credits– <10 FTEs– Wages < $25,000
• Phased out credits– 10 to 24 FTEs– Wages to $50,000
• Credit as share of premium:– 2010-2014: 35% – 2014-2015: 50%
<25 Employees
<25 Employees
Number of FTEs
Average Annual Wages
($’s)
Employer payments for Health Insurance
Tax Credit % Tax Credit
10 $20,000 $40,000 $14,000 35%
15 $20,000 $60,000 $14,000 23%
24 $20,000 $96,000 $2,240 2%
10 $40,000 $40,000 $5,600 14%
15 $40,000 $60,000 $1,400 2%
24 $40,000 $96,000 0 0
Tax Credits – 2010: Examples
State Decisions on ExchangesChoice Issues
Number of Exchanges American Health Benefit Exchange - IndividualsSmall Business Health Options Program (SHOP) - Small EmployersCombination
Governance State AgencyPrivate Non-profit
Regulatory Authority Insurance plan characteristics in/outside ExchangeRisk AdjustmentRate Review“Aggregator”
American Health Benefit Exchange
• Individual Coverage• Administration of Subsidy• Medicaid Enrollment• Choice of Plans
–Quality Information
American Health Benefit Exchange
• Certify, price and rate plans
• Standardized benefit information
• Administration of Individual Subsidy
IndividualsIndividuals
SHOP Exchange Purchasing• Certify, price and rate
plans • Standardized benefit
information• Administer small business
tax credits
<50Employees
<50Employees
>50Employees
>50Employees
Pay or Play
• Penalties if full time workers obtain coverage in the Exchange– $2,000 per full time worker (exclude first
30) if no coverage offered– $3,000 per worker obtaining the subsidy
if coverage offered that is not sufficiently generous
– High cost sharing– High employee premiums
Employer Must:• Auto enroll new workers
– Employee only – Lowest cost plan
• Employee can still opt out or change selection
>200 Employees
>200 Employees
What we all need to watch
• Federal Regulations– Benefit Package– Exchange regulations– Definitions/regulations
for• ACOs• Bundled payments• Pay for performance
• State Decisions– Exchange structure and
functions– Insurance market
regulation– Medicaid
• Eligibility and Enrollment Processes
• Provider incentives and payments
– Workforce strategy
What we all need to watch…..Political developments
Health Care ReformOverviewProviders’ ViewEmployers’ ViewWhat we all need to watch
William Custer, PhDPatricia Ketsche, PhDInstitute of Health Administration, GSU