Transcript Document title, 36 points, bottom aligned, not to exceed

Public Policy Update
Matt Brow
VP, Public Policy & Reimbursement Strategy
McKesson Specialty Health
November 14, 2012
2012 Election Results
2
Presidential Election Results
3
3
National Electoral College Results
12
3
7
4
VT 3
3
10
3
3
6
55
10
9
29
16
20
6
5
6
10
20
6
38
11
10
7
5
18
5
8
15
11
6
8
6
9
DC 3
DE 3
MD 10
Barack Obama
Romney
Obama
16
(D)
Mitt Romney (R)
29
Unknown
Romney
Obama
HI 4
4
NH 4
MA 11
RI 4
CT 7
NJ 14
9
3
206
332
Romney
Obama
Source: National Journal, 2012.
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4
270 votes
needed to win
Battleground States Popular Vote Results
52%
53%
54%
52%
52%
52%
50%
51%
51%
51%
Obama won by 74,000 votes
Source: National Journal, 2012; CNN 2012 Election Center.
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5
2012 Senate Results Chart
Former Senate Makeup
Total Seats
Democrats: 51
Republicans: 47
Independents: 2
Dem Not Up for Reelection
Dem Maintained Seat
51
Dem Defeated Incumbent
Dem Won Open Seat
Republican Not Up for Reelection
New Senate Makeup
Republican Maintained Seat
Republican Defeated Incumbent
1
2 3
15
Republican Won Open Seat
Independent
7
173
Romney
37
30
Total Seats
Democrats: 53
Republicans: 45
Independents: 2
Source: National Journal, 2012.
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5
Quick Takeaways
•While GOP remains
the minority, retains
filibuster power
•Expect GOP soulsearching after failure to
knock down 2006 Dem
Senators
•Sens.-elect Joe Donnelly
of IN, Ted Cruz of TX,
and Elizabeth Warren of
MA may be brightest
stars in new Senate
2012 House Results Chart
Former House Makeup
5
240
190
Dem Maintained Seat
Republican Maintained Seat
New House Makeup
Vacancy
7*
Unknown
195
173
Romney
*7 House races still unresolved, Louisiana’s 3rd district will have a December runoff, Arizona’s 2nd and 9th,
Florida’s 18th, California’s 7th and 52nd, and North Carolina’s 7th are still in question
Source: National Journal, 2012, “Boehner to House Repubs: ‘Divided We Fail, ’ Billy House.
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Quick Takeaways
• The Republicans were
expected to, and did,
keep their majority in
the House
• Partisan expectations
aside, there are early
signs of a willingness to
work across the aisle…
• Speaker John Boehner
(R-Oh.) said Tuesday's
mandate from voters was
to work together:
"Divided we fail; not just
next session but the next
two months."
ACA is the Law of the Land
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US Current Health Care Coverage
Insurance Market Today
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Large Group
Market
Medicare/
Medicaid
Individual
Insurance
• 150 million
• 50% of market
• 90 million
• 30% of market
• 15 million
• 5% of market
Uninsured
• 45 million
• 20% of market
Affordable Care Act Expansions
Uninsured Reduced by 30 Million
 15 million more covered under streamlined Medicaid program open to all with
incomes up to 133% of FPL
• Pending state expansion decisions
 15 million covered under reformed commercial market for individuals and
small groups
• Guarantee issue, community rating, individual mandate with limited
exceptions, tax credits to help with premiums up to 400% of FPL
• Exchanges to make coverage more accessible
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Affordable Care Act Insurance Expansions
Insurance Requirements
 Community Rating
• Rates may only vary by age (3:1 ratio), tobacco use, self or family, and rating
area
 Guaranteed Issue
• Eligibility for coverage may not be based on health factors
 Employer-sponsored coverage waiting periods = < 90 days
 Coverage must include “essential benefits package”
 Limit annual cost sharing, eliminate benefit maximums
 Medical Loss Ratio
 HAS and FSA caps
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Favorite Mid-Year Pastime
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Decision is a Win for Patients & Specialty Physicians
 > 30 million newly insured Americans (half Medicaid and half private
insurance purchased with government subsidies through exchanges)
 Elimination pre-existing conditions exclusions and rescissions
 Elimination of lifetime and annual benefits maximums
 Creation of a new mandate to cover the routine costs of care associated with
participation in cancer clinical trials
• Applied to all coverage not just fully insured
 New patient out of pocket caps that will limit patient financial responsibility
and associated bad debt for practices
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What’s Next with the ACA?
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| For internal use only/proprietary and confidential.
The Affordable Care Act Timeline
Majority of Provisions Implemented in 2014
Medicare Reforms
Pilot programs to change how
doctors are paid, cost controls
2012
Everything Else
Indian Health Service, restaurant
menu labeling, breastfeeding rules,
prevention fund, free preventative
screenings, etc.
Insurance Reform
Young adults on parents’ plan, rate
review, no lifetime limits
2014
Insurance Reforms
Individual mandate, guaranteed
issue, community rating
2015
Doctors paid
according to
quality of
care??
Medicaid Expansion
Exchanges and Tax Credits Sets
Intended to broaden entitlement to
everyone under 133% of federal poverty
limit in some states
up a marketplace to buy insurance 15
and
helps middle income Americans pay their
premiums
Source: National Journal Editorial Research.
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Implementation Will Be Anything But a Cakewalk
Many states were gambling that Supreme Court would invalidate
law – have done nothing to set up exchanges
HHS implementation is incomplete and diverse funding sources are
subject to vagaries of Congress – unlikely law will roll out on time
2017 and beyond, states will be held accountable for a greater
share of the Medicaid funding – states may have to cut other
programs or raise taxes to fund
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State’s Big Decisions on Medicaid
Expanding Medicaid
Fighting Medical Expansion
Medicaid’s expansion would be greatest in states where
eligibility requirements are more restrictive.
The states most reluctant to expand their Medicaid
programs are also the states with the lowest enrollment in
their current programs.
Increase over current Medicaid enrollment in
2019, under the Affordable Care Act
Medicaid take-up rate among eligible adults
Not or leaning toward not participating in the ACA
Medicaid expansion
50% or less
50-59.9%
60-69.9%
70% or more
Source: Urban Institute
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Source: The Advisory Board; Health Affairs
State Leadership
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State Participation: Health Benefits Exchange
Studying Options
Decision Not to Create
State Exchange
Planning for
Partnership Exchange
Established State
Exchange
No Significant Activity
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2013 Medicare Physician Fee Schedule
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2013 Medicare PFS Final Rule
November 1, 2012 the Center for Medicare and Medicaid Services
released the 2013 PFS Final Rule
– Radiation Oncology: -7 % (versus -15% in the proposed rule)
– Hematology/Oncology: +2 % (versus -1% in the proposed rule)
Allowed
Impact of
New and
Updated
Transitio
Input
Total
Charges
End of
Revised
Equipment
nal Care
Changes
(Cumulat
(mil)
PPIS
Codes,
Interest Rate
Manage
for Certain
ive
Transition
MPPR, New
Assumption
ment
Radiation
Impact)
Specialty
Utilization
Therapy
and Other
Procedures
Factors
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HEMATOLOGY/ ONCOLOGY
$1,909
-1%
3%
1%
-1%
0%
2%
RADIATION ONCOLOGY
$1,988
-4%
2%
-3%
-1%
-1%
-7%
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Lame Duck / Fiscal Cliff
22 | For internal use only/proprietary and confidential.
The Fiscal Cliff
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Fiscal Cliff
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Expiring 2001 & 2003 Tax Cuts
 Higher taxes for every American who pays income taxes,
including small business owners
– The 10% bracket disappears,
– All other brackets increase by 3%
– Top tier at 39.6% or above
 Higher taxes if you are married (marriage penalties reinstated)
– Penalties in 2013 at least $2,087
 Higher taxes if you are a parent (child credit cut in half)
– Credit goes from $1000 to $500
 Higher taxes on investments
– Capital Gains goes from 15% to 20%
– Qualified Dividends goes from 15% to 39.6% (44.6% with 3.8%
ObamaCare surtax)
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Expiring 2001 & 2003 Tax Cuts
 Higher Death Taxes
– % Exemption drops from $5.12 million to $1 million
– Top rate will rise from 35% to 55%
 Higher taxes for 31 million households due to
Alternative Minimum Tax
– Exemptions fall from $74,450 to $45,000 for couples
– Average of about $4,200 per affected taxpayer
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Sequestration on the Horizon
If Congress does not reduce the deficit by $1.2 trillion by January 1,
2013, automatic spending cuts (sequestration) begin.
If Sequestration Is Enforced
Budget
Defense
Non-Defense
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Cuts 2013 to 2021
$493.2B
$493.2B
Interest
$216B
TOTAL
$1.2T
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Non-Defense Cuts Focus Heavily on Medicare
Estimated Department of Health and Human Services Cuts from Sequestration for FY2013
Centers for
Medicare and
Medicaid Services
NIH
Health Resources
Administration for
and Services
Children
Administration
and Families
CDC
FDA
Substance
Abuse and
Mental Health
Office of the
Program
Services
Departmental Administration Inspector
Support
Center
Administration
General
Mgmt.
On Aging
Total
cuts:
54.6B
($11,855M)
($2,529M)
($1,532M)
($605M)
($490M)
($319M)
($275M)
($168M)
($122M)
($5M)
($5M)
Source: OMB Report Pursuant to the Sequestration Transparency Act of 2012.
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Discussion
29 | For internal use only/proprietary and confidential.