Trends in Health Care 2007: Challenges and Implications Course #201398
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Transcript of Trends in Health Care 2007: Challenges and Implications Course #201398
Trends in Health Care 2007:Challenges and Implications
Course #201398
Santa Barbara Association of Health UnderwritersPismo Beach – February 23, 2007
Alan Katz, RHUCAHU
Vice President, Public Affairs
October 4, 2007 Trends in Health Care 2007 Slide 2
1. Health Care Reform
2. Everything Else
Today we’ll focus on health care reform
Health Care Legislation 2007
October 4, 2007 Trends in Health Care 2007 Slide 3
1. Why Health Care Reform Now
2. How We Got to Where We Are Now
3. Agents Focus
4. CAHU’s Healthy Solution
5. Taking Action
6. Conclusion / Q&A
What We’re Up To Today
October 4, 2007 Trends in Health Care 2007 Slide 4
The Health Care Reform Drumbeat
Governor Schwarzenegger
Democratic Leadership
Presidential Candidates
Single Payer Coalition
Sicko
Why Now?
Why Health Care Reform Now
October 4, 2007 Trends in Health Care 2007 Slide 5
A Broken Health Care System
6.5 million uninsured Stressed emergency rooms “The hidden tax” Rising health care costs Chronic illness; poor health choices Medical errors Financial strain, bankruptcy
From a presentation by Governor’s staff
October 4, 2007 Trends in Health Care 2007 Slide 6
Current System is Broken
Build on Existing Employer-based System Single Payer not politically practical
The Insurance Marketplace Needs Reforming
Insist on Affordability for Working Families Through public and private programs
Legislative Leadership Key Messages
October 4, 2007 Trends in Health Care 2007 Slide 7
Current System Needs Strengthening
Provide Californians with Access and Choice
Make the Health Care System More Reliable
Introduce No New Taxes Or fees or whatever you want to call them
Senate Republican’s Key Messages
October 4, 2007 Trends in Health Care 2007 Slide 8
The Law of Political Reality:Political Reality trumps Real Reality for all parties at all times
The Law of Political Activity:Politicians are paid to address perceptions and that’s what they do
The Law of Political Reporting:The media is paid to report on what politicians do and that’s what they do
Why This Matters: Three Political Laws
October 4, 2007 Trends in Health Care 2007 Slide 9
Media Reports an Increase in Uninsured
Politicians Repeat the Story Deploring the Increase in the Number of Uninsured
Media Reports the Politicians Repeating the Media Story and Deploring the Increase in the Number of Uninsured
The Three Laws and the Uninsured
October 4, 2007 Trends in Health Care 2007 Slide 10
“Topped only by immigration (18%), health care (14%) is now second on Californians’ list of most important issues facing the state. In fact, 69 percent of residents and 72 percent of likely voters think California’s health care system is in need of major change.”
– Public Policy Institute of California (September 20, 2007)
“The findings show that a growing majority of voters (69%) express dissatisfaction with the way the health care system is working.”
Support for making reforms within the current system fell from 52% to 33%.
Support for replacing the current system with a state government-run system rose from 24% to 36%.
– The Field Poll (August 22, 2007)
Polls Reflect the Drumbeat
October 4, 2007 Trends in Health Care 2007 Slide 11
2006: Governor Schwarzenegger makes health care reform a high priority in campaign
January 2007: Democratic leaders introduce health care reform bills (SB 48 and AB 8). Governor introduces his proposal. Republicans introduce their proposal.
June 2007: Democratic leaders combine bill into AB 8.
Summer 2007: The Great Budget Debacle
September 2007: Legislature passes AB 8. Governor promises veto and calls special sessions on water and health care reform.
How We Got to Where We Are Now
October 4, 2007 Trends in Health Care 2007 Slide 12
1. Pay-or-Play: Required all employers to spend 7.5% of payroll on health benefits or pay 7.5% fee
Employees of “fee firms” required to enroll in state purchasing pool
MRMIB could increase percentage by any amount once per year
2. Admin Cap: Required health plans to spend 85% of premium on health services
Assembly Bill 8: Key Provisions
October 4, 2007 Trends in Health Care 2007 Slide 13
3. AB 1672 Expansion: Increased size of “small group and eliminated Risk Adjustment Factors
4. Guarantee Issue:Required guarantee issue in individual market
No requirement individuals must buy coverage
5. Plan Definitions:Required carriers to offer MediCare and Healthy Families look-alikes. Created category of Individual plans.
Assembly Bill 8: Key Provisions
October 4, 2007 Trends in Health Care 2007 Slide 14
Individual versus Employer Centric
Broad Financing versus Employer Financing
4% Employer Fee versus 7.5 Percent Fee
Key Differences with Governor
October 4, 2007 Trends in Health Care 2007 Slide 15
Staffs of Governor and Legislative Leaders are negotiating legislative language
Document is circulating for comment from interested parties
A “starting point” not a compromise Substantial placeholders
Governor is lining up support for his planCarriers, hospitals, CMA, Chambers of Commerce, SEIU, etc.
Current Situation
October 4, 2007 Trends in Health Care 2007 Slide 16
Achieve a compromise concurrently with resolution of water-focused special session (mid-October)
Enact legislation creating a framework of reform (majority vote required)
Qualify an initiative with financial elements for the November 2008 ballot (part or all of framework contingent on passage)
Goal of Special Session
October 4, 2007 Trends in Health Care 2007 Slide 17
Lots of Hot Button issues
Lots of interest groups focused on each element of the plan
For Agents, two key questions:
1. If the provision becomes law will it harm our profession or our clients?
2. Is changing the provision an absolute necessity for other stakeholders?
Applying this means agents should focus on …….
Agents: A Need for Focus
October 4, 2007 Trends in Health Care 2007 Slide 18
Carrier Administrative Expense Cap Governor would require carriers to spend 85%
of premium dollars on medical claims Result: Little or no funds left for distribution Draft language provides some “space”
Concern: Limits funds available for distribution Likely to deter new entrants into the market Doesn’t guarantee lower costs, just eliminates
agents and reduces customer service levels
Agents Focus: Issue #1
October 4, 2007 Trends in Health Care 2007 Slide 19
Purchasing Pool May require employees of fee-based
companies to enroll May require subsidized individuals to enroll
Concern: Could “crowd-out” individual market Discriminates against those receiving subsidies Imposes tax on employees of fee-based
companies to extent better value available outside of pool
Agents Focus: Issue #2
October 4, 2007 Trends in Health Care 2007 Slide 20
Mandate to Issue: Guarantee Issue in the individual market
without a strong, enforceable mandate to buy Assumption: Enforcement will work
Concern: Failure to enforce mandate to purchase will
result in dramatic premium increases and commission reductions or eliminations
Current requirement for auto insurance is only 75% effective
Agents Focus: Issue #3
October 4, 2007 Trends in Health Care 2007 Slide 21
All Californians deserve a health care system which delivers both world class care and financial
security is accessible, affordable and fair boosts the state’s economy, attracts new
businesses and strengthens existing enterprises is realistic about what one state can do
CAHU’s Healthy Solutions
October 4, 2007 Trends in Health Care 2007 Slide 22
CAHU believes a Healthy Solution is one which: neither bankrupts families nor busts the state’s
budget. assures all Californians have at least basic health
care coverage. provides the state’s diverse population with diverse
choices. promotes ongoing and long-term innovation and
experimentation to enable the state’s health care system to adapt over time to evolving needs.
assures consumers access to meaningful information and expert advice and counseling.
Requirements of Reform
October 4, 2007 Trends in Health Care 2007 Slide 23
Enroll the one million Californians eligible for state programs who fail to enroll
At least 15% of the uninsured Achieve 85% enrollment then expand eligibility
gradually to 300% of Federal Poverty Level
Expand subsidies gradually to Californians earning up to 400% of FPL
Expand subsidies to those earning up to 400% as state finances permit
Allow those receiving premium subsidies to use them in the open market – no segregation into state-run risk pools
Allow assignment to employers to encourage companies to buy coverage
CAHU’s Healthy Solutions
October 4, 2007 Trends in Health Care 2007 Slide 24
Require carriers to guarantee issue individual coverage once 90% of Californians are enrolled
Until 90% coverage is achieved, expand MRMIP to be a true insurer of last resort
Even under guarantee issue, pre-existing condition exclusions and rate-ups may be applied
Length of exclusion and rate-up tied to duration previously uninsured
Finance reform through measures which include: Broad tax (e.g., sale tax) Targeted taxes (e.g., tobacco, fast food, handguns) Tax on carriers (including raising revenue from self-
insured through indirect means)
CAHU’s Healthy Solutions
October 4, 2007 Trends in Health Care 2007 Slide 25
Reduce the underlying cost of health care Pay for performance Electronic Health Records Electronic Rx Evidence based medicine Hospital error reduction programs
CAHU Healthy Solutions
October 4, 2007 Trends in Health Care 2007 Slide 26
There’s tremendous momentum for health care reform
The drive comes from all sides and both parties
Stakes are high: The results can make the system better or far worse
Dealing with Reality
October 4, 2007 Trends in Health Care 2007 Slide 27
Join Health Underwriters – Today!
Contribute to CAHU PAC – Today!
Be a communicator Inform clients of what’s at stake Respond to articles in your local paper Volunteer to speak in your community Attend town hall meetings Meet with legislators in their districts Promote CAHU’s Healthy Solutions plan
What’s Required: Get Involved
October 4, 2007 Trends in Health Care 2007 Slide 28
Helpful publications:Health Underwriter newsletters and magazinesCalifornia Broker
Helpful web sites:Health Underwriters:
www.CAHUHealthySolutions.org
California HealthCare Foundation Site:www.CalHealthReform.org
My Blog (a shameless plug):
www.AlanKatz.WordPress.com
What’s Required: Stay Informed
October 4, 2007 Trends in Health Care 2007 Slide 29
We’ve faced challenges like this before: 1990-1993: AB 1672 1993-1994: ClintonCare 1996: Single Payor Initiative
Lawmakers are listening
Keep Things in Perspective
October 4, 2007 Trends in Health Care 2007 Slide 30
Agents have tremendous power: Subject matter expertise Clients that are constituents Presence in every community
If we work together …
… If we stay focused …
We can make health care reforma change for the better for our clients and our profession
Helping to Get it Right
Alan Katz, RHUCAHU
Vice President, Public Affairs
Trends in Health Care 2007:Challenges and Implications