The Path to Universal Coverage: Can Health Reform Succeed? HCW Lunch

1
The Path to Universal CoverageCan Health Reform
Succeed?HCW Lunch LearnMay 16, 2007

• Jonathan Oberlander
• Department of Social Medicine
• Department of Health Policy Administration
• UNC-Chapel Hill

2
The Odd Couple
3
Familiar Headlines

• Number of Uninsured Escalates
• No Relief in Sight for Health Costs
• Health Insurance Gap Surges as Political Issue
• Coalition Unveils Plan to Cover the Uninsured
• Talk of Universal Health Care Grows
• States Take Initiative on Health Care Reform
• Candidates Outline Ideas for Universal Health
  Care

4
(No Transcript)
5
Cycle of U.S. Health Reform

• Discover Crisis in Health System
• Identify and Debate Solutions
• Do Nothing or Not Much
• Ignore Issue
• Rediscover Crisis in Health System

6
Roadmap

• Rediscovering a Crisis
• Cost Control
• Covering the Uninsured
• The Future of Health Reform

7

• Rediscovering the Crisis

8
Source KCMU and Urban Institute
9
Source Kaiser/HRET Survey of Employer-Sponsored
Health Benefits 2005
10
(No Transcript)
11
(No Transcript)
12
The Future Up, Up, and Away
Source Uwe Reinhardt
13

• II. Cost Control

14
Private Sector Strategies to Control Costs
15
A Brief History of Private Sector Cost Control
Efforts in Two Words 1990s Managed2000s
Directed

16
Promise of HSAs/Consumer-directed health care

• Control costs by reducing excess demand and
  unnecessary medical care (skin in the game)
• Make people responsible for their health care
  behavior
• Portability move away from employer-based system

17
Problems with HSAs

• Regressive tax policy
• Regressive health policy
• Concentration of health care costs
• Supply-side backlash

18
Other Magic Bullets/Acronyms to Control Costs

• Electronic Medical Records (EMR)
• Pay for performance (P4P)

19

• III. The Politics of Health Reform
• Covering the Uninsured

20
The Health Reform Debate

• Vs.

21
Why is Health Reform So Hard to Pass?

• Interests (NHESEI)
• Institutions
• Ideology
• Indifference

22
Public Sector Strategies to Expand
CoverageThe Federal Government
23
A long time ago,In a capital not so far awayThe
Clinton health plan diedand took with it any
political enthusiasm for comprehensive reformUS
health policy thus entered the galaxy of
incrementalism and inaction, where it remains
todayIs there hope for reform?
24
The Trouble with Incrementlaism
25
Health Reform Solutions, 1993

• Single Payer
• Employer Mandate
• Individual Mandate
• Expand Public Programs
• Tax Credits for Private Insurance

26
Since 1994 health policy analysts have been hard
at work developing new solutions to cover the
uninsured. The results are in..
27
Health Reform Solutions, 2007

• Single Payer
• Employer Mandate
• Individual Mandate
• Expand Public Programs
• Tax Credits for Private Insurance

28
Bush Health Reform Plan 2007

• New standard tax deduction for health
  insurance for individual and employer-based
  insurance
• 15,000 families
• 7,500 individuals
• Health insurance to be treated as taxable
  income and above those amounts will be taxed

29
Income Tax Distribution of Uninsured
5 (27 tax bracket)
1 (30-39 tax bracket)
23 (15 tax bracket)
55 (0 tax bracket)
16 (10 tax bracket)
Source S. A. Glied and D. K. Remler, The Effect
of Health Savings Accounts on Health Insurance
Coverage (New York The Commonwealth Fund, April
2005).
30
How Much Reform?

• Estimated coverage impact
• Bush plan would increase coverage by 2-5 million
  uninsured
• Future of employer-based insurance
• Individual/Non-group Market

31
The Politics of Changing the Tax Preference

• Value of tax exclusion for employer-sponsored
  insurance 188 billion
• Estimated increase in federal revenues from Bush
  proposal to cap that exclusion 333 billion,
  2007-17
• Members of Congress Running for Re-election in
  2008 468
• Presidents Running for Re-election in 2008
  Zero.
• JCT estimate Lewin estimates 153 billion
  revenue loss 2009-2018.

32
Public Sector Strategies to Expand
CoverageThe States
33
And when all looked lost, health policy
analysts deployed a new weapon in the fight for
health reformagainst the Empire of rising costs
and uninsured. A weapon so threatening even
insurance companies and providers trembled with
fear
34
Terminator-Care
35
States On The March

• Maine
• Massachusetts
• Illinois
• Vermont
• California
• Pennsylvania

36
Health Reform Agenda in North Carolina

• High Risk Pool
• Childrens Insurance

37
A Massachusetts Miracle?

• Universal coverage (or at least more universal)
• Play or Pay (not very much)
• Individual Mandate
• Medicaid expansion
• Income-related subsidies
• Purchasing Pool (the Connector)
• Bipartisan Politics

38
California Terminator-Care

• Play or Pay (4 payroll tax for buis.gt10 workers)
  employer mandate
• Individual Mandate
• Purchasing Pool
• Medicaid expansion
• Provider Taxes
• Insurers must spend 85 of on patient care

39
Limits of State-led Reform

• How universal is universal?
• ERISA legal challenges
• Medicaid waivers
• Cost control, or lack thereof
• Financing and affordability

40
III. Health Reform the 2008 Elections
41
Partisan Divide on Health Care

• The time has come for universal health care in
  America.
• --Barack Obama, January 25, 2007
• They're moving toward socialized medicine so
  fast, it'll make your head spin.
• --Rudy Guliani, April 27, 2007

42
Health Care in the Primaries
43
2008 Plans John Edwards

• Universal Coverage
• Play or pay employer mandate
• Health Markets with Medicare-like option
• Individual mandate
• Real financing roll
• back tax cuts

44
IV. The Future of Health Reform
45
What forces will shape health reform in coming
years?

• 2008 elections Iraq
• Economy Budget
• Medicare
• State health reforms
• Middle class Anxiously insured
• Business

46
A Fairer Fight

• 
  Vs.

47
A Sign of Things To Come?

• Abandoning the business lobbys traditional
  resistance to healthcare reform, a new coalition
  of 36 major companies plans to launch a political
  campaign today calling for medical insurance to
  be expanded to everyone..
• Los Angeles Times, May 7th, 2007

48
Conclusions

• 1. Employer-based system is fraying and perhaps
  approaching a crossroads which way do we go?
  And do employers become the swing voters in
  health reform?
• 2. If youre looking for signs of hope, pay
  attention to state efforts, SCHIP renewal, 2008
  elections.
• 3. If youre a pessimist, youre in luck things
  will continue to get worse, especially for
  low-and middle-income Americans priced out of
  health insurance
• 4. Comprehensive reform may be returning to the
  national political agenda but there is no
  guarantee it will pass.
• What happens next?...

49
Famous Health Policy Analyst