Transcript THE PRESENT IMPACT OF EXPANDING HEALTH INSURANCE …

Park City Club
5956 Sherry Lane, Suite 1700
Dallas, Texas
Jonathan K. Henderson
K&L Gates
Fort Worth, Texas
Bret Tate
Associate General Counsel
Cook Children’s Healthcare System
Fort Worth, Texas
Overview

Uninsured and Underinsured
Problem

Universal Healthcare

The Future Is On Its Way
Uninsured and Underinsured Problem
– Definitions

Universal Health Insurance Coverage & Universal Health
Coverage (UHC) - used interchangeably

UHC: “Healthcare coverage that equally provides access to
some type of healthcare through health insurance or direct
provision of healthcare”

Focus on UHC as the principal means to assure healthcare
access for all Americans
Uninsured and Underinsured Problem
– Definitions

Uninsured

Persons who do not have coverage under private
health insurance, Medicare, Medicaid, public
assistance, a State-sponsored health plan,
other government-sponsored programs, or a
military health plan.
National Center for Health Statistics, Centers for Disease
Control and Prevention
Uninsured and Underinsured Problem
– Definitions

Underinsured
“...[I]ndividuals who are exposed to significant
financial losses or unable to obtain needed care
because their insurance coverage is inadequate.
The problem for analysts involves distinguishing
what is considered adequate coverage from
inadequate coverage.”
Healthcare In Connecticut: The Uninsured, Healthcare Financing,
Access and Uncompensated Care
Uninsured and Underinsured Problem
– Statistics

Healthcare Costs

Total spending up 6.9 % in 2005, to $2.0 trillion ($6,697 pp)

Annual cost of insuring the average family nearly doubled
from 1999 to 2006

Analysts predict aggregate expenditures to double (to $4.1
trillion) by 2016 (20% of economy)
Uninsured and Underinsured Problem
– Statistics

Access

46.5 million uninsured (est.)

16-29 million underinsured (est.)

Slow recovery from 2001 economic downturn;
eroding employee/employer buy-in as premiums
spike
Uninsured and Underinsured Problem
– Statistics

Lack of insurance not an equal opportunity
problem

Poor and near-poor account for two-thirds of uninsureds
nationally

Minorities most likely to be uninsured (approx 33% Hispanics
& Native Americans, 22% African-Americans, and 17% AsianAmericans uninsured, vs. 13% non-minorities)

Still, problem affects all social classes (8.4% of
uninsureds from households making $75,000 or more)
Uninsured and Underinsured Problem
– Statistics

The 46.5M includes 9.5M non-citizens, arguably reducing
uninsured Americans to 37M.

Also includes another 17M citizens who earn more than the
medium household income and can “afford” health
insurance

Subtracting non-citizens and “immortals” leaves 20M (less
than 7% of population)

Kaiser Family Foundation: true number of uninsured
Americans = 8.2 to 13.9M, 45% of whom will have
insurance within 4 months
Uninsured and Underinsured Problem
– Perceptions

So, is there really a healthcare crisis?

Does the problem warrant system overhaul
vs. incremental change?
Uninsured and Underinsured Problem
– Perceptions

Voters have identified healthcare as one of
the leading domestic issues.

They want to hear candidates’ positions on
reducing cost and expanding coverage.

They won’t entertain talk of limiting
expectations or outcome….
USA Today
Uninsured and Underinsured Problem
– Perceptions

The presidential contenders say there’s a crisis.

And they all have a plan to address the impact of the
crisis.…
Uninsured and
Underinsured Problem – Impact

Patients

Hospitals

Physicians

Employers

Third-Party Payors

Society
Uninsured and
Underinsured Problem – Solutions

Consumer Driven
Healthcare

Incremental Reform

Major Reform
UHC – Models

Single Payer -- Financed by one source


Example - Medicare
Multi-Payer -- Funded by a combination of
private and public sources
 Employer/Employee
 Regional
plans
public health plans
UHC – Overview

Federal Government

State Government

Private Support of UHC
UHC – Federal Government

Comparative Data Points Between
Single and Multi-Payer Models

Access

Affordability

Financial Impact/Profitability

Administrative Expense

Jobs
UHC – Federal Government

Brief History
 Federal
Government attempts at creating a UHC
system are nothing new
 But

to date, every such attempt has failed
Teddy Roosevelt, FDR and Truman proposed
such plans.
 More
recently…
UHC – Federal Government
UHC – Federal Government

Nixon unveiled his “Comprehensive Health
Insurance Act” during his 1974 State of the
Union
 Built
on the employer-sponsored health benefit
plan model prevalent in the post-WW II era
 Provide
federal subsidies to self-employed and
small businesses to guarantee UHC access
 No
new federal bureaucracy: not government run
UHC – Federal Government
UHC – Federal Government

“HEALTHCARE: To establish a
comprehensive national health
program which will make
adequate healthcare a right for all
people, be uniform in scope, and
preserve the private relationship
between doctor and patient.”
Jimmy Carter for President 1976 Campaign
Brochure
UHC – Federal Government

“National Healthcare Plan” not actively pursued.

Ted Kennedy proposed “Healthcare For All Americans.”

Carter proposed “HealthCare” - fell short of UHC and
preserved significant role for private insurers.

The two negotiated a compromise bill resembling Kennedy's
plan but retaining private industry involvement.

The bill died soon after. Carter replaced 5 cabinet members,
including Califano, his Secretary of HEW.
UHC – Federal Government
UHC – Federal Government

1992 – Clinton campaigned
for President on a two-fold
platform:
 “It’s
the economy, stupid.”
 “Don’t

forget about healthcare.”
Pledged to implement a
national healthcare policy
reaching all Americans.
UHC – Federal Government

Task Force on National
Healthcare Reform
 Headed
by Hillary Rodham
Clinton
 Charged
with creating a
comprehensive health plan for all
Americans
 To
be cornerstone of Clinton’s
first-term agenda
UHC – Federal Government

“Health Security Act”
(“HillaryCare”) presented to
Congress in November, 2003

Employer mandate model, featuring a
system of regional purchasing
monopolies

Price controls on healthcare premiums
& national quality oversight

Uneven impact on large and small
businesses, with many larger
businesses receiving financial relief
UHC – Federal Government

GOP critics (organized medicine/pharmaceutical industry):
inefficiency, bureaucracy, pandering to insurers; challenged
need for such a program and even the existence of a healthcare
crisis.

Proposal defeated (8/94) - latest casualty among failed
UHC bills.

Mid-term “Republican Revolution” (Newt Gingrich) – GOP wins
both houses, killing Clinton’s hope of comprehensive healthcare
reform.

Then, Clinton had other problems to address…
UHC – Federal Government

Why has every attempt to pass UHC failed

Reasons vary widely


Rejection of government involvement (“socialized
medicine” or “red menace”)

UHC cannot coexist with employer-based coverage
U.S. is the only industrialized nation that does
not provide UHC for its citizens
2008 Presidential Elections

Democratic Candidates
 Senator
 John
Barack Obama
Edwards
 Senator
Hillary Clinton
 Senator
Joe Biden
 Senator
Chris Dodd
 Congressman
 Governor
Dennis Kucinich
Bill Richardson
2008 Presidential Elections

Republican Candidates
 John
 Mitt
McCain
Romney
 Senator
 Rudy
Sam Brownback
Giuliani
 Governor
Mike Huckabee
 Governor
Tommy Thompson
Senator Clinton

Universal Health Care – Yes, private policies and a
new federal “public plan”

Businesses required to offer insurance or pay into a
pool

Tax credits tied to income to prevent premiums from
exceeding a certain percentage of income

Same choice of plans that members of Congress
have
Senator Clinton

No discrimination for pre-existing conditions

Invest in technology to improve efficiencies

Drug companies required to offer “fair prices
and accurate information”

Potentially expand Medicare, Medicaid and
SCHIP

Raise taxes on wealthier families
Senator Obama

Universal Health Care – Yes, for children

Requires employers to share costs of
insuring workers

Paid in part by savings from gained
efficiencies

Offer similar coverage to that of federal
employees (FEHBP)
Senator Obama

No discrimination for pre-existing conditions

Invest in technology to improve efficiencies

Focus on prevention and management of
chronic conditions

Increase insurance industry competition

Reinsurance for catastrophic coverage

Raise taxes on wealthier families
Senator McCain

Universal Health Care – No

Expand access by providing tax credit of $2,500 for
individuals / $5,000 for families to make insurance
affordable

Reform tax code to eliminate bias for employersponsored health insurance

Require states receiving Medicaid to develop “risk
adjustment” bonus to high-cost and low-income
families to supplement tax credits and Medicaid
funds
Senator McCain

Health insurance available nationwide, not
confined to state lines

Seek alternative avenues of insurance –
churches and professional associations

Provide information on treatment options and
transparency regarding medical outcomes,
quality of care, costs, and prices

Tort Reform
UHC – Federal Government

Barriers to Entry and Public Opinion of a Federal
Solution







Desire to maintain individual responsibility
Skeptical assessment of the institutional arrangements
through which health insurance is financed and administered
The commitment to choice among health plans
Disagreement over the public/private insurance mix
Regional disparities for expanding health insurance
enrollment
Fragmented and decentralized system of policy making
Weak political parties
UHC – Federal Government

Barriers to Entry (continued)
 Personal
politics
 Congressional
 Strong
policy-making strategies
interest group opposition
 Reelection
 Financial
incentives
contributions
 Presidential
 Powerful
tactics and strategy
congressional personalities
 Character
and judgment flaws of key actors
UHC – Other Countries

Canada

UHC provided by provincial governments


France

State-run health insurance for employees


Supplementary insurance common
Private insurance to supplement care common
Germany

Compulsory state health insurance

10% utilize private insurance
UHC – State Government

So, what role should states
play?
 Perceived
vacuum of coherent
national healthcare policy
 Escalating
Medicaid obligations
and insufficient federal
subsidies to fund them
UHC – Maine

First state to pass UHC (2003)

Provides insurance subsidies
and access to coverage through
private carriers

One-time $50M Medicaid
subsidy

14,000 enrollees to date; future
funding uncertain
UHC – Vermont

Healthcare Reform Act (2006)

Provides insurance purchase subsidies and
coordination

Medicaid/voluntary citizen contributions/
employer funding mandate
UHC – California

Closely watched, with one of highest number
of uninsureds nationally

Several failed attempts to enact UHC
 Referendum
would mandate employer
subsidies (2004)
 Single
payor plan would eliminate private
insurance (2006)
 Multi-payor
plan would require employer
contributions of 7.5% of wages (2007)
UHC – California

Gov. Schwarzenegger’s hotly debated
“AB X1-1” (2007)

Incorporated core principles of plan he
vetoed

Multi-payor, retaining role for private
insurers

Employer/individual mandates, purchasing
pool subsidies, and hospital/physician
taxes

Just “terminated” in Committee
UHC – State Mandates;
Prescribed or Preempted?

Problem:
require employers to either “play” (contribute
a specified percentage of payroll or a dollar
amount/employee toward healthcare coverage) or
“pay” (contribute to a state fund).
 Most
 These
violate ERISA and are subject to litigation
challenges.
UHC – State Mandates;
Prescribed or Preempted?

What’s at issue?
 Any
state, municipal or county statute, regulation
or ordinance requiring employer mandates to fund
employee health benefits
The Future Is On Its Way

Providers

Payors

Federal Government

State Government

Legal and Regulatory
Issues
The Future Is On Its Way –
Providers

Urgent Care Centers

Retail Centers

Treatment in Foreign
Countries

Wellness Programs

Self-Help
The Future Is On Its Way – Payors

Managed Care Plan
Consolidation

Catastrophic Coverage
Insurance Policies
The Future Is On Its Way –
Federal Government

SCHIP Program

Medicare Part D
The Future Is On Its Way –
State Government

Employer Mandates

Expanding Age of Dependent Coverage

High-Risk Pools

Expansion of Medicaid Programs

Health Purchasing Cooperatives
The Unknown?

Is affordable and accessible healthcare a “right” for all Americans?

Will the public accept UHC (or only incremental change)?

Would the cure of UHC be worse than the disease?

What impact of financial viability of current Medicare system?

What will happen to the quality of care?

How do we make the system more efficient?

How will healthcare reform impact affordability, cost, and personal
accountability?

What role should the healthcare bar play?

????