Slide 1

Jonathan K. Henderson K&L Gates Fort Worth, Texas Bret Tate Associate General Counsel Cook Childrens Healthcare System Fort Worth, Texas Park City Club Park City Club 5956 Sherry Lane, Suite 1700 Dallas, Texas Slide 2 Slide 3 Overview Uninsured and Underinsured Problem Universal Healthcare The Future Is On Its Way Slide 4 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 Slide 5 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 Slide 6 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 Slide 7 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) Slide 8 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 Slide 9 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% Asian- Americans uninsured, vs. 13% non-minorities) Still, problem affects all social classes (8.4% of uninsureds from households making $75,000 or more) Slide 10 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 Slide 11 Uninsured and Underinsured Problem Perceptions So, is there really a healthcare crisis? Does the problem warrant system overhaul vs. incremental change? Slide 12 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 wont entertain talk of limiting expectations or outcome. USA Today Slide 13 Uninsured and Underinsured Problem Perceptions The presidential contenders say theres a crisis. And they all have a plan to address the impact of the crisis. Slide 14 Uninsured and Underinsured Problem Impact Patients Hospitals Physicians Employers Third-Party Payors Society Slide 15 Uninsured and Underinsured Problem Solutions Consumer Driven Healthcare Incremental Reform Major Reform Slide 16 UHC Models Single Payer -- Financed by one source Example - Medicare Multi-Payer -- Funded by a combination of private and public sources Employer/Employee plans Regional public health plans Slide 17 UHC Overview Federal Government State Government Private Support of UHC Slide 18 UHC Federal Government Comparative Data Points Between Single and Multi-Payer Models Access Affordability Financial Impact/Profitability Administrative Expense Jobs Slide 19 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 Slide 20 UHC Federal Government Slide 21 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 Slide 22 UHC Federal Government Slide 23 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 Slide 24 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. Slide 25 UHC Federal Government Slide 26 1992 Clinton campaigned for President on a two-fold platform: Its the economy, stupid. Dont forget about healthcare. Pledged to implement a national healthcare policy reaching all Americans. Slide 27 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 Clintons first-term agenda Slide 28 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 Slide 29 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 Clintons hope of comprehensive healthcare reform. Then, Clinton had other problems to address Slide 30 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 Slide 31 Democratic Candidates Senator Barack Obama John Edwards Senator Hillary Clinton Senator Joe Biden Senator Chris Dodd Congressman Dennis Kucinich Governor Bill Richardson 2008 Presidential Elections Slide 32 Republican Candidates John McCain Mitt Romney Senator Sam Brownback Rudy Giuliani Governor Mike Huckabee Governor Tommy Thompson Slide 33 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 Slide 34 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 Slide 35 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) Slide 36 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 Slide 37 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 employer- sponsored 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 Slide 38 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 Slide 39 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 Slide 40 UHC Federal Government Barriers to Entry (continued) Personal politics Congressional policy-making strategies Strong interest group opposition Reelection incentives Financial contributions Presidential tactics and strategy Powerful congressional personalities Character and judgment flaws of key actors Slide 41 UHC Other Countries Canada UHC provided by provincial governments Supplementary insurance common France State-run health insurance for employees Private insurance to supplement care common Germany Compulsory state health insurance 10% utilize private insurance Slide 42 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 Slide 43 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 Slide 44 UHC Vermont Healthcare Reform Act (2006) Provides insurance purchase subsidies and coordination Medicaid/voluntary citizen contributions/ employer funding mandate Slide 45 UHC California Closely watched, with one of highest number of uninsureds nationally Several failed attempts to enact UHC RReferendum would mandate employer subsidies (2004) SSingle payor plan would eliminate private insurance (2006) MMulti-payor plan would require employer contributions of 7.5% of wages (2007) Slide 46 Gov. Schwarzeneggers 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 Slide 47 UHC State Mandates; Prescribed or Preempted? Problem: Most 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). These violate ERISA and are subject to litigation challenges. Slide 48 UHC State Mandates; Prescribed or Preempted? Whats at issue? Any state, municipal or county statute, regulation or ordinance requiring employer mandates to fund employee health benefits Slide 49 The Future Is On Its Way Providers Payors Federal Government State Government Legal and Regulatory Issues Slide 50 The Future Is On Its Way Providers Urgent Care Centers Retail Centers Treatment in Foreign Countries Wellness Programs Self-Help Slide 51 The Future Is On Its Way Payors Managed Care Plan Consolidation Catastrophic Coverage Insurance Policies Slide 52 The Future Is On Its Way Federal Government SCHIP Program Medicare Part D Slide 53 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 Slide 54 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? ????