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


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

Building Blocks of Health Care ReformRowan
Frost, MPHResearch Specialist, UA MEZCOPHAnne
Hill, MA, MPHProgram Coordinator, UA MEZCOPH
  • Summarize the scope of the health care crisis in
  • Define key health reform terms
  • Describe key components of health care reform
  • 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

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

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

US Census 2007 at http//
l National Conference of State Legislatures
Saint Lukes Health Initiative
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.
Uninsured in Arizona
  • Population distribution (non-Medicare) (in
  • 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//
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
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

National health care spending and projections
  • 2006, total health expenditures reached 2.1
  • 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

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//
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.
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
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//
Are we getting what we pay for?
1997 Costs Ranks
Per capita costs Organisation for Economic
Co-operation and Development, Ranks
World Health Organization,
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
Sorting out the puzzle
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?
  • Who pays?
  • Consumer?
  • Employer?
  • Government agency (taxpayers)?

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
  • 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
  • Premium assistance State uses public funds to
    pay for a portion of the premium costs of
    employer or individual insurance.

State Plans Pending and Enacted
  • 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
  • Premium assistance for those earning less than
    300 FPL
  • 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
  • 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
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
  • 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
  • Dirigo Health Reform Act signed into law on June
    18, 2003
  • Comprehensive reform to provide affordable
    quality health care to every Maine resident by
  • 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
  • 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.
  • 2006, Massachusetts enacted Chapter 58 of Acts of
    2006 to provide near universal coverage for state
  • Commonwealth Care program to provide subsidized
    coverage for individuals with incomes up to 300
  • Insurance Connector
  • MassHealth (Medicaid) expansion to children up to
  • 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.
San Francisco
  • Healthy San Francisco provides access to
    affordable, basic and ongoing health care
    services for uninsured residents, regardless of
  • 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
Candidates Health Care Reform Plans
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
  • 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
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
  • Expand Medicaid/SCHIP safety nets
  • Insurance company regulation
  • Require coverage of preventive services
  • Reduce health care costs
  • Prevention initiatives
  • Paperless systems (health information
  • Chronic care coordination
  • Medicare/Medicaid changes price negotiation
  • Improve quality
  • Best practices
  • Incentives for good care
  • Consumer education
  • Initiatives to reduce disparities
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
  • Workforce development
  • Infrastructure investment
Critique of Candidates Health Plans
  • McCain
  • 2500-5000 will not cover most insurance
  • 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

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
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
  • Mandatory passive enrollment

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

Adapted from Four models to increase health
insurance coverage in Arizona. (2004). Arizona
Health Futures, St. Lukes Health Initiative.
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.
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.
Other Reform Strategies
  • Healthy Arizona a citizens initiative
  • Everyone has access to affordable, basic health
  • Emphasizes prevention
  • Freedom to choose provider
  • Possible expansion of AHCCCS
  • Increased demand for services met by adequate

Dr. Duke Duncan and Ms. Eva Shaw
Other Reform Strategies
  • Employee-based Health Insurance
  • Expands the States AHCCCS/Health Care Group
    program to offer coverage to all working
  • 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

Employee-Based Health Insurance
Can purchase supplemental coverage (not
Employee purchases basic coverage for self,
family (sliding scale)
Employer may pay partial or full premiums as
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
Other Reform Strategies
  • Comprehensive coverage
  • Mandated primary care coverage for Arizona
  • 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

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

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
  • Tax vouchers beneficial to lower income people
  • Quality of care
  • Incentives?
  • Punishment?

Thanks to
  • Renee Goldtooth, MPH
  • Joel Meister, Professor Emeritus
  • MCH Training Grant
  • Anne Hill
  • Rowan Frost