Building Blocks of Health Care Reform Rowan Frost, MPH Research Specialist, UA MEZCOPH Anne Hill, MA

1
Building Blocks of Health Care ReformRowan
Frost, MPHResearch Specialist, UA MEZCOPHAnne
Hill, MA, MPHProgram Coordinator, UA MEZCOPH
2
Purpose

• Summarize the scope of the health care crisis in
  Arizona
• Define key health reform terms
• Describe key components of health care reform
  proposals
• Provide a brief overview of health care reform
  proposals enacted and proposed in the U.S.,
  including those of the presidential candidates
• Identify components of health care reform that
  could be incorporated into an AzPHA position
  statement

3
Health Care in America

• The pieces are all there
• Public programs
• Limited eligibility
• Private insurance
• Employment-based
• Cash pay (Fee for service)
• Specialty care
• People without insurance
• Safety nets
• Community health clinics
• Government programs
• Charity care

4
National Uninsured Insurance Trends

• 2006, 15.8 of population was uninsured (47
  million Americans)
• 2007, 60 of firms offered health insurance to
  employees
• Average premium costs outpaced growth in workers
  earnings by 3.7 and overall inflation by 2.6
• Average premium cost for family coverage was
  12,106
• single coverage premiums averaged 4,479

US Census 2007 at http//www.census.gov/Press-Rele
ase/www/releases/archives/income_wealth/010583.htm
l National Conference of State Legislatures
Saint Lukes Health Initiative
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Reasons for Uninsurance among Uninsured
Nonelderly Adults and Children, 2003-04
Graves, J.A., Long, S.K. Why Do People Lack
Health Insurance. Health Policy Outline, No. 14.
Urban Institute.
6
Uninsured in Arizona

• Population distribution (non-Medicare) (in
  thousands)

• In AZ 19 uninsured (1.2 million)
• 23.8 are 19 to 44 years old
• Most employed
• 1/3 of the uninsured live in poverty while 1/3
  live with household incomes at least double the
  poverty level.

US Census 2007 at http//www.census.gov/Press-Rele
ase/www/releases/archives/income_wealth/010583.htm
l National Conference of State Legislatures
Saint Lukes Health Initiative Urban Institute
and Kaiser Commission on Medicaid and the
Uninsured estimates based on the Census Bureaus
March 2006 and 2007 Current Population Survey
(CPS Annual Social and Economic Supplements).
St. Lukes Health Initiative, 2006
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AZ Insurance Trends

• Arizona residents less likely to receive health
  insurance through employer
• 2005, the average Arizona family premium per
  enrolled employee was 10,268
• Arizona workers paid 17.5 of the total cost of
  health insurance premiums for single coverage and
  28.0 for family coverage

8
National health care spending and projections

• 2006, total health expenditures reached 2.1
  trillion
• 7,026 per person
• 16 GDP
• By 2016, health care spending in U.S. is
  projected to be over 4.1 trillion or 19.6 GDP.
• Changing demographics?
• Value of services provided by non-profits,
  charity organizations, and faith communities

9
Arizona Health Care Spending

• 2004 health care spending totaled 23.6 billion
• 4,103 per capita
• Majority of expenditures for under 65

• Expense distribution in AZ (in billions)

Sources CMS. http//www.cms.hhs.gov/NationalHealt
hExpendData/02_NationalHealthAccountsHistorical.as
pTopOfPage Health Expenditure Data, Health
Expenditures by State of Residence, Centers for
Medicare and Medicaid Services, Office of the
Actuary, National Health Statistics Group,
released September 2007. St. Lukes Health
Initiative, 2006 data.
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Arizona Health Care Projections

• 2002-2010 expenditures for under 65 population
  expected to more than double
• Population growth and medical inflation
• Individual coverage market growth
• Demographic shift?

St. Lukes Health Initiative
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Employer Trends

• In the next year, while few employers plan to
  stop offering health insurance, they are likely
  to increase employee cost-sharing
• Increase workers contribution to premiums
• Increase office visit co-payments
• Increase pharmaceutical cost-sharing
• Increase deductibles
• Freeze wage increases

Arizona Health Futures 2007. St. Lukes Health
Initiative. http//www.slhi.org/publications/studi
es_research/pdfs/SLHIFactSheet07.pdf
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Are we getting what we pay for?
1997 Costs Ranks
Per capita costs Organisation for Economic
Co-operation and Development, www.oecd.org Ranks
World Health Organization, www.who.int/whr/annexes
/en/index.html)
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What Arizonans Want

• Health care is a priority in the state
• 54 believe there are some good things about the
  system, but fundamental changes are needed to
  make it work better
• Want to make sure treatment is not limited
  because of cost, but keep costs down
• Many are dissatisfied with the current health
  care system
• 65 support making a major effort to provide
  health coverage for the uninsured

Arizona Can Coverage and Access Now. AZ Health
Futures. 2004. St. Lukes Health Initiative
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Sorting out the puzzle
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Key components of health care reform proposals

• Publicly or privately administered, or both?
• Government or industry?
• Who gets coverage?
• Children? Workers? Everyone?
• What is covered?
• Basic package? Medically necessary?
  Vision/dental?
• Who pays?
• Consumer?
• Employer?
• Government agency (taxpayers)?

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Types of Reform Strategies

• Single-Payer, aka National Health Insurance
  Government pays for health care. May or may not
  prohibit private-pay.
• Three-share/Multishare programs employer,
  employee, government each pay part of the
  health insurance premium (usually a limited
  package)
• Consumer Directed Health Plan (CDHP)
  High-Deductible Health Plan plus Health Savings
  Accounts (HSAs). Consumer or employer pays into
  HSAs tax-free, only used for covered services.
• Health insurance exchange/connector State acts
  as admininstrator for private plans, allowing
  individuals and small businesses to buy in and
  pooling risk. May or may not include premium
  subsidies.
• Premium assistance State uses public funds to
  pay for a portion of the premium costs of
  employer or individual insurance.

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State Plans Pending and Enacted
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Vermont

• 2006 Governor signed legislation aimed at
  achieving universal coverage and improving care
• Enhance private insurance coverage
• Improve outreach to uninsured
• Assist with affordability
• Catamount Health a health insurance plan for
  individuals who do not have access to
  employer-sponsored insurance (ESI)
• Can purchase even if eligible for ESI if you have
  an income under 300 FPL (3 x FPL 30,630 for
  indiv)
• Premium assistance for those earning less than
  300 FPL

Kff.org/uninsured/statehealthreform/vt.cfm?RenderF
orPrint1
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Minnesota

• 2007 Governor signed Hr1078
• Increase MinnesotaCare for childless adults
  (eligibility from 175 FPL to 200 FPL and up to
  215 FPL)
• Improve public education and provide incentives
  for individuals who signed up with MinnesotaCare
• Establish health promotion programs
• Wellness benefits for Medicaid recipients with
  chronic health conditions
• 2007 signed bill to establish funding for study
  of Minnesota Health Insurance Exchange and
  Health Care Transformation Task Force
• Made recommendations in 2008 to improve health
  care coverage

Kff.org/uninsured/statehealthreform/mn.cfm?RenderF
orPrint1
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Wisconsin

• 2006 introduction of BadgerCare Plus to provide
  universal health care coverage for children and
  expand coverage to adults.
• 2007 Governor signed budget which provides
  universal coverage for children and expands
  Medicaid coverage
• Expands SCHIP eligibility to children with family
  incomes up to 300 FPL
• Children in families with incomes above 200 FPL
  pay premium Those above 300 FPL can buy into
  program at 80 per month.
• Expands coverage for parents and caretaker
  relatives up to 200 FPL under Medicaid and to
  pregnant women up to 300 FPL
• 2009 coverage for childless adults will expand to
  200 FPL under Medicaid

Kff.org/uninsured/statehealthreform/wi.cfm?RenderF
orPrint1
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New York

• 2007 initiated Partnership for Coverage to
  develop comprehensive plan for universal coverage
• 2007 extended Child Health Plus to children with
  income up to 400 FPL
• Denied by Centers for Medicare and Medicaid
  Services (CMS) Gov. sued
• 2007 Governor signed S06344, allowing employers
  to buy into Family Health Plus

Kff.org/uninsured/statehealthreform/ny.cfm?RenderF
orPrint1
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Connecticut

• 2007 legislature passed Governors Charter Oak
  Health Plan as part of 2008-2009 Biennial Budget
• Health care coverage for uninsured
• Premiums subsidies for individuals with incomes
  up to 300 FPL
• Tiered co-payments for prescription drugs
• Target premium of about 250 per month
• Elimination of pre-existing condition exclusions
• No maximum annual benefits, but lifetime coverage
  of 1 million
• 2007 passed HealthFirst Connecticut and Healthy
  Kids Initiative (SB1484)
• Health First Authority to draft plan on health
  insurance to every CT resident
• Expands States Medicaid program to provide
  parents with incomes up to 185 FPL and pregnant
  women with incomes up to 250
• Enrollment of newborns in Husky Program

Kff.org/uninsured/statehealthreform/ct.cfm?RenderF
orPrint1
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Maine

• Dirigo Health Reform Act signed into law on June
  18, 2003
• Comprehensive reform to provide affordable
  quality health care to every Maine resident by
  2009
• Dirigo Choice developed to provide a voluntary
  and affordable health care plan for businesses
  with 50 or fewer employees and self-employed
• Maine Quality Forum created to serve as a
  clearinghouse of information and best practices
  to improve health
• 2007 proposed changes to Dirigo Health did not
  pass
• Signed LD431 which allowed Dirigo Health to
  self-administer rather than contract with private
  insurance agency
• 2008 23,000 individuals and over 725 small
  businesses enrolled in Dirigo Choice.

Kff.org/uninsured/statehealthreform/me.cfm?RenderF
orPrint1
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Massachusetts

• 2006, Massachusetts enacted Chapter 58 of Acts of
  2006 to provide near universal coverage for state
  residents
• Commonwealth Care program to provide subsidized
  coverage for individuals with incomes up to 300
  FPL
• Insurance Connector
• MassHealth (Medicaid) expansion to children up to
  300FPL
• Individual mandate to purchase health insurance
  by 2007
• Employers with more than 11 employers or more to
  provide health insurance or pay fair share
  contribution of up to 295 annually per employee.
• 2008, over 300,000 of estimated 450,000 uninsured
  obtained health coverage.

Kff.org/uninsured/statehealthreform/ma.cfm?RenderF
orPrint1
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San Francisco

• Healthy San Francisco provides access to
  affordable, basic and ongoing health care
  services for uninsured residents, regardless of
  status
• Residents (ages 18-64) who have been uninsured
  for at least 90 days are eligible for program,
  which includes primary, mental health, inpatient
  care, prescription drugs from San Francisco
  General Hospital and 27 participating clinics
• Use of medical home
• Participant fee (income-based service fees)
• Employer requirement (more than 20 workers)
• 2008 13,000 enrolled

Kff.org/uninsured/statehealthreform/sf.cfm?RenderF
orPrint
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Candidates Health Care Reform Plans
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John McCain - R

• Access for all through
• Diverse insurance choices (no mandates)
• Personal responsibility
• Tax changes
• Eliminate favorable tax treatment of
  employer-based insurance
• Tax credits for individuals (2500 indiv/5000
  families)
• Ease insurance regulation
• Tort reform
• Let vets use benefits outside of VA system
• Invest in prevention research and education, care
  of chronic disease
• Promote competition among providers
• Pay only for quality care
• Use mid-level providers
• Treatment settings (retail clinics)
• Allow drug reimportation
• Medicare payments for prevention and care
  coordination

www.johnmccain.com/Informing/Issues/19ba2flc-c03f-
4ac2-8cd5-5cf2edb527cf.htm
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Hillary Clinton - D

• Mandated universal coverage
• Maintain existing private public programs
• Tax credits for working families
• Require large employer contribution tax
  incentives for small employers
• Add Health Choices Menu option for
  individuals/employers
• Expand Medicaid/SCHIP safety nets
• Insurance company regulation
• Require coverage of preventive services
• Reduce health care costs
• Prevention initiatives
• Paperless systems (health information
  technology)
• Chronic care coordination
• Medicare/Medicaid changes price negotiation
• Improve quality
• Best practices
• Incentives for good care
• Consumer education
• Initiatives to reduce disparities

www.hillaryclinton.com/feature/healthcareplan/summ
ary.aspx
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Barack Obama - D

• Universal coverage
• Mandatory coverage of children
• Federal subsidies to individuals for coverage
  costs require employer contribution
• Expands Medicaid/SCHIP safety nets
• Creates National Health Insurance Exchange
• Regulate insurance industry
• Reduce health care costs
• Invest in health information technology,
  electronic medical records
• Chronic care prevention/management
• Medicare/Medicaid changes price negotiation
• Allow drug reimportation
• Tort reform
• Improve quality
• Best practices
• Incentives for good care
• Initiatives to reduce disparities
• Promote and strengthen public health and
  prevention
• Workforce development
• Infrastructure investment

www.barakobama.com/issues/healthcare/
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Critique of Candidates Health Plans

• McCain
• 2500-5000 will not cover most insurance
  premiums
• Leaves gap between Medicaid eligible those
  paying less than 2500 in taxes
• Deregulation of insurance more competition, less
  oversight benefits to consumers?
• Expands purchasing options
• Clinton
• Mandated universal coverage is not popular
• Adds new programs and maintains existing systems,
  for better or worse
• Obama
• Mandates coverage for children, but no guarantee
  of affordability
• Adults still not guaranteed affordable coverage
• Adds new programs and maintains existing systems,
  for better or worse

http//www.npr.org/templates/story/story.php?story
Id18910326
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Other Reform Strategies

• Committee for Economic Development
• Replace employer-based insurance by restructuring
  health insurance.
• Retains private insurers requires equal premiums
  comprehensive coverage (may vary by plan)
• Administered by regional exchanges that oversee
  industry guide patients.
• Not mandated individuals could opt out.
• Give each household a fixed-dollar credit
  sufficient for basic package.
• Eliminate tax benefits for employer-funded
  insurance means testing.
• Allow supplemental insurance.

Full proposal available at www.ced.org
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Other Reform Strategies

• AZ Public Utility
• Universal, single payer
• Health care is provided through a centralized
  administrative structure, similar to the
  provision of electricity, water, and public
  safety
• Mandatory passive enrollment

Adapted from Four models to increase health
insurance coverage in Arizona. (2004). Arizona
Health Futures, St. Lukes Health Initiative.
33
Other Reform Strategies

• Sliding Scale
• Expand public programs by allowing individuals to
  buy into AHCCCS
• Premiums are income-based
• Voluntary enrollment
• Issues
• Crowd out Premiums for Sliding Scale might be
  lower than employer-based insurance
• Adverse selection Less healthy people might be
  more likely to sign up, making the risk pool
  sicker

Adapted from Four models to increase health
insurance coverage in Arizona. (2004). Arizona
Health Futures, St. Lukes Health Initiative.
34
Other Reform Strategies

• Employer Mandate
• All employers with at least 2 employees would be
  required to offer coverage to employees working
  more than part-time and their dependents
• Employees would not be required to accept.
• Pay or play if coverage was not provided,
  payroll taxes would be increased
• Issues
• Employers might shift more costs to employees
  (higher premiums, deductibles, etc.)
• Employers might cut employee hours to avoid
  paying insurance

Adapted from Four models to increase health
insurance coverage in Arizona. (2004). Arizona
Health Futures, St. Lukes Health Initiative.
35
Other Reform Strategies

• AZ Tax Credit Model
• Voluntary
• Tax credit or voucher to encourage low-income
  people (not Medicaid eligible) to purchase
  private insurance
• Issue
• If tax credit was high enough to be attractive
  and used, it might be cheaper to provide coverage
  through programs like AHCCCS

Adapted from Four models to increase health
insurance coverage in Arizona. (2004). Arizona
Health Futures, St. Lukes Health Initiative.
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Other Reform Strategies

• Healthy Arizona a citizens initiative
• Everyone has access to affordable, basic health
  care
• Emphasizes prevention
• Freedom to choose provider
• Possible expansion of AHCCCS
• Increased demand for services met by adequate
  reimbursement

Dr. Duke Duncan and Ms. Eva Shaw
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Other Reform Strategies

• Employee-based Health Insurance
• Expands the States AHCCCS/Health Care Group
  program to offer coverage to all working
  Arizonans
• Workers can buy a basic plan for themselves and
  their families
• Costs are based on household income
• Employees can purchase supplemental coverage at
  an increased premium
• Employers can contribute
• Insurance is portable
• Coverage doesnt depend on the employer

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Employee-Based Health Insurance
Can purchase supplemental coverage (not
subsidized)
Employee purchases basic coverage for self,
family (sliding scale)
Employer may pay partial or full premiums as
benefits
Private insurance plan (larger employers) covers
employee, family
State Insurance Plan (expansion of Healthcare
Group etc.) basic package of coverage
could opt into this system
Tax credit for employers who participate
Tax credit for employers who participate
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Other Reform Strategies

• Comprehensive coverage
• Mandated primary care coverage for Arizona
  residents
• Expands Medicare/Medicaid
• Higher reimbursements for health providers
• Create more health centers, telemedicine and
  mobile clinics in rural areas
• Coordinated care
• Paid for by individual premiums, employer
  contributions, new taxes
• Eliminates employer-based insurance
• Insurance is portable
• Freedom of choice of provider

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Putting the Pieces Together

• Affordability for who?
• Access
• Providers
• Facilities (location/hours?)
• Services
• Basic coverage
• What are the acceptable minimums and maximums?
• Preventive care
• Healthy behaviors
• Who is covered
• Residents
• Citizens
• Employed
• Poor
• Children

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Putting the Pieces Together

• Mandate
• Employer
• Individual
• State
• Private plans
• Employment-based
• Individual purchase
• Public plans
• Expand existing Medicaid, Medicare, SCHIP
• New program
• Tax benefits
• Tax credits most beneficial to those with most
  income
• Tax vouchers beneficial to lower income people
• Quality of care
• Incentives?
• Punishment?

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Thanks to

• Renee Goldtooth, MPH
• Joel Meister, Professor Emeritus
• MCH Training Grant
• Anne Hill abhill_at_email.arizona.edu
• Rowan Frost rowanfrost_at_gmail.com