a non-profit corporation and independent licensee of the blue cross blue shield association 1 health...
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
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Health Reform:The Impact on Michigan
Michigan Purchasers Health Alliance Annual Kickoff Conference
September 23, 2010
Marianne Udow-PhillipsDirector
A non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Health Reform: The FundamentalsExpansion of Insurance and Insurance Reform
Requires everyone to have health insurance
Expands Medicaid and subsidizes the poor and near poor
Larger employers not offering health insurance pay a penalty for those employees receiving a subsidy and to automatically enroll employees in coverage
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Health Reform: The FundamentalsExpansion of Insurance and Insurance Reform (cont’d)
Reforms insurance practices such as exclusions for pre-existing conditions, guaranteed issue, rating practices, loss ratios, coverage for children to age 26
Expands benefits to include preventive care, eliminate lifetime and annual limits
Defines benefit packages for those with subsidies
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Health Reform: The FundamentalsCost Control, Quality Improvement, Work force, and Public Health
Hundreds of pages and provisions related to these issues
Virtually every idea ever suggested by anyone academic or practitioner
$115 billion in provisions authorized but not appropriated
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Health Reform: The FundamentalsFunding and Deficit Reduction
Medicare changes, including higher Medicare part A tax rate for high income individuals, eliminates employer tax deduction for retiree drug subsidy benefits, reducing payments for DSH, home health, hospital wage index, some other procedures ($575 billion, 2010-19)
Revises payments to Medicare Advantage plans (savings of over $140 billion, 2010-19)
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Health Reform: The FundamentalsFunding and Deficit Reduction (cont’d)
Penalty payments for those not complying with mandate (estimated at $120 billion, 2010-19)
Other: adjustments to HRA/FSAs, change threshold for deductibility of medical expenses, limit deductibility of executive compensation, 10% tax on tanning services
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Health Reform: The FundamentalsFunding and Deficit Reduction (cont’d)
Fees on pharmaceutical companies, medical devices, insurance sector
Excise tax on “Cadillac” health plans effective 2018 (premiums at $10,200, individuals; $27,500, families; 40% tax above this threshold $32 billion in revenue, 2018-19)
Total 10 year cost of $938 billion; deficit reduction of $124 billion
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This week in health reform: Sept 23 – the six month mark
No more lifetime caps on insurance paymentsChildren with pre-existing conditions cannot be
excluded from coverageChildren to age 26 now able to stay on parents’
benefit plans Requirement to cover certain preventive
services with no cost sharing in new health plans
Beginning of phase out of annual benefit limits
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Health Care Reform: Major Pieces Already in Place
Temporary high risk pool for those with pre-existing conditions
Medicare drug rebates for those who reached the “doughnut hole”
Consumer information at state and federal level (healthcare.gov)
Small business tax creditsCertain grants awarded (e.g. Prevention and
Public Health fund, FQHCs, nurse home visit programs)
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
A lot has to happen at the state level by 2014
Insurance exchanges: American Health Benefits Exchange; Small Business Health Option Program (SHOP)
Medicaid coverage to all up to 133% of povertyReinsurance contractElectronic communications and enrollment
between Medicaid, CHIP, exchangesData reporting
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
State has many program options in health reform*
Examples include:Medicaid global paymentsEarly childhood home visitation programsInitiatives for seniorsPatient centered medical homeWorkforce development grantsImmunization grants
* not all funded 11
A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
State has many program options in health reform* (cont’d)
Examples include:Grants for malpractice reformBundled payments demonstrationAccountable care organization
demonstrationCo/op planState basic plan
* not all funded12
A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Local providers/communities have many program options*
Demonstration projects such as:Accountable care organizationsCare transition services for Medicare Payment bundlingOther projects identified by the Center for
Medicare and Medicaid Innovation*not all are appropriated
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A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Local providers/communities have many program options*(cont’d)
Research and innovation grants such as:Center for Quality Improvement and
Patient SafetyPatient Centered Outcomes Research
InstituteExpansion of Federally Qualified Health
Centers Depression Center Network
*not all are appropriated 14
A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Local providers/communities have many program options*(cont’d)
Training and work force development:Primary care education programsAdvanced practice nurse trainingSupport for care in rural areas
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*not all are appropriated
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National Impacts on Cost and Coverage of the ACA
Latest census figures: uninsured:– 2008: 15.4% of the US population, 46.3 million
– 2009: 16.7%, 50.7 million
Post reform uninsured expected:– (2014): 7.3%, 18.5 million
Spending growth 2010-2019 expected to be .2% higher than without the ACA.
Expected % of GDP:– w/o the ACA: 19.3%
– w/ the ACA: 19.6% 16
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An Overall Picture of Coverage and Possible ACA Change In Michigan
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2007/2008
Source: Center for Healthcare Research & Transformation
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Coverage Impact on the Uninsured if Health Reform Had Taken Effect in 2007/2008
18Source: Center for Healthcare Research & Transformation
A non-profit corporation and independent licensee of the Blue Cross Blue Shield AssociationA non-profit corporation and independent licensee of the Blue Cross Blue Shield Association
Total Michigan Non-elderly Population by Income, 2007/2008
19Source: Center for Healthcare Research & Transformation
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Insurance Exchange in the Individual Market
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Population Type
Source: Center for Healthcare Research & Transformation
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Distribution of Employees by Employer Size in the Private Sector, Michigan, 2008
21Source: Center for Healthcare Research & Transformation
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Private Sector Establishments and Employees by Firm Size in Michigan, 2008
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Small business size Number of private businesses
Total number of employees
Fewer than 10 employees 119,375 428,671
10-24 employees 25,026 337,867
Total (all businesses with fewer than 25 employees) 144,401 766,538
Source: Medical Expenditure Panel Survey
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Center for Healthcare Research &Transformation
2929 Plymouth Road Suite 245Ann Arbor, MI 48105(734) 998-7555
Website:www.chrt.orgEmail: [email protected] us on Twitter: @chrtumich