Transcript Title / divider screen title

International Financial Reporting Standards
US Health Care Reform:
Review and Assessment
Ronald S. Hikel
Main topics
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• The system now in place
• The process by which the legislation was drafted,
debated and adopted
• A summary of the legislation
• Analysis of the strengths, weaknesses and
mysteries of the bill
• Conclusions and predictions
Current insurance coverage
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• Seven major public plans
– Medicare, Medicaid, Tri-Care, Veterans’ Administration.
State Child Health Insurance Plan, Federal Employees
Health Benefits Plan, Indian Health Service
– 130 million+ users
• Private insurance
– Costs covered by employers (⅔) and employees (⅓)
 Fewer big and small employers are offering coverage
 Health benefits are tax free to employees
– Covers 160 million people
Current insurance coverage
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• Total national health care cost is $2.5 trillion
– Equals 18% of gross domestic product
– Compares to 10% or less in other countries
• System leaves over 80 million people (1 in 3 under 65)
with:
– No care
– Inadequate care
– Insecure care
Major reform objectives
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1. Bring national cost of care under control
2. Make quality care available to all American citizens
and legal residents
3. Make cost of care affordable to individuals and
families
4. Assure high quality care
Legislative process dominated by
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1. Five committees of jurisdiction in Congress
–
3 in House + 2 in Senate = 5 bills
2. Loss of Senators Kennedy and Daschle
3. Election of Republican in Kennedy’s old seat
4. Intense anti-government public sentiment
5. White House refuses to table draft bill
–
President shows limited leadership until late in the day
6. Desire for Republican support led to concessions
7. Bill complex, lengthy and impossible to understand
Process influence on content
1. House passed early more liberal bill
2. Senate made House bill more conservative
3. Weakened bill sent back to House
4. Weaker Senate bill passed by House as
referendum on Obama’s presidency
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Five major provisions in the Bill
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1. Most Americans must have health insurance or
pay a tax fine
2. Financial assistance for those with modest incomes
3. Lower-income individuals/families eligible for
Medicaid – 16 million enrolled by 2019
4. States to set up American Health Benefit Exchanges
–
Uninsured can buy coverage – 24 million by 2019
5. Regulation of insurance industry bans practices that
prevent sicker people from getting coverage
Most major provisions in effect in 2014
Early provisions implemented in 2010
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1. ‘High risk pool’ for those with pre-existing
medical conditions and no coverage
2. Children can remain on parents’ coverage until
they turn 26
3. Existing coverage cannot be cancelled for any
reason except fraud
4. Coverage cannot be denied children with preexisting conditions
5. Some restrictions on annual and lifetime
maximum limits companies can set on costs per
client
Weaknesses new plan will not fix
1. No national Public Option to compete with
private insurance
2. No steps taken to either
–
Reduce total health care costs or waste
–
Hold premium increases to affordable level
3. No obligatory steps to significantly improve
delivery system efficiency or effectiveness
4. System reliance on for-profit coverage
substantially increased
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Weaknesses new plan will not fix (cont’d)
5. Competition and cost/risk off-loading between
public and private sectors continues
6. Consolidation of private insurance firms will
increase
7. Regulation of private insurance industry left
largely in state hands
In 2019, 23 million people
will still be uncovered
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Conclusions and predictions
1. Conflict between public and private health
care will grow
2. Private insurance premiums will continue to
rise sharply
3. Insurance companies will:
–
drop more expensive providers from their
approved vendor lists, narrowing choice
–
reduce or drop less profitable plans
–
‘encourage’ sicker people to move onto public
plans
–
leave high cost states completely
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Conclusions and predictions (cont’d)
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4. More subtle forms of insurance industry risk
rating will emerge
5. Public sector plans will increasingly deal with
sicker people and costs will rise significantly
6. Funding of public programs, especially Medicare
and Medicaid, will be cut
7. Outcome of private/public conflict will determine
shape of legislative changes to come and results
of Obama reform
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Questions/comments?