Arming agents for health care reform

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Arming agents for health care reform

• Greg Dattilo
• Co-Author Your Health Matters What You Need to
  Know About U.S. Health Care

Facts Not Fiction What really ails the US
health care system
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2008 The Fork in the Road
Consumer- Driven Consumer sets price of
care Competition Focused on quality care and
consumer demand
How to Heal the Health Care Crisis
Government- Driven Government sets price of
care Monopoly Disallow competition Focused on
the cost of care and global budget
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2007 Law Change - 62Q.165

• It is the commitment of the state to achieve
  universal health coverage for all Minnesotans by
  the year 2011. Universal coverage is achieved
  when (1) every Minnesotan has access to a full
  range of quality health care services (2) every
  Minnesotan is able to obtain affordable health
  coverage which pays for the full range of
  services, including preventive and primary care
  and (3) every Minnesotan pays into the health
  care system according to that persons ability.

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2007 Law Change - 62Q.165

• It is the commitment of the state to achieve
  universal health coverage for all Minnesotans by
  the year 2011. Universal coverage is achieved
  when (1) every Minnesotan has access to a full
  range of quality health care services (2) every
  Minnesotan is able to obtain affordable health
  coverage which pays for the full range of
  services, including preventive and primary care
  and (3) every Minnesotan pays into the health
  care system according to that persons ability.

Guaranteed Issue
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2007 Law Change - 62Q.165

• It is the commitment of the state to achieve
  universal health coverage for all Minnesotans by
  the year 2011. Universal coverage is achieved
  when (1) every Minnesotan has access to a full
  range of quality health care services (2) every
  Minnesotan is able to obtain affordable health
  coverage which pays for the full range of
  services, including preventive and primary care
  and (3) every Minnesotan pays into the health
  care system according to that persons ability.

Minimum Benefit Set
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2007 Law Change - 62Q.165

• It is the commitment of the state to achieve
  universal health coverage for all Minnesotans by
  the year 2011. Universal coverage is achieved
  when (1) every Minnesotan has access to a full
  range of quality health care services (2) every
  Minnesotan is able to obtain affordable health
  coverage which pays for the full range of
  services, including preventive and primary care
  and (3) every Minnesotan pays into the health
  care system according to that persons ability.

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Affordable coverage means

• Family of four earning 61,620 or less cannot
  spend more than 6 (3,700) on health care
• Premium, co-pays, deductibles, co-insurance,
  out-of-pocket expenses
• Minnesota taxpayers will subsidize any spending
  greater than 3,700

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Affordable coverage means

• Family of four earning 82,608 or less cannot
  spend more than 8 (6,600) on health care
• Premium, co-pays, deductibles, co-insurance,
  out-of-pocket expenses
• Minnesota taxpayers will subsidize any spending
  greater than 6,600

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How to get your new government entitlement

• Create the new Health Insurance Exchange
• Create advanceable, refundable tax credit for
  Minnesotans.
• Allow employees to use an employer cash voucher
  to purchase subsidized, government-defined health
  plans through the Exchange

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What does this mean for employers?

• At its beginning Incents employers to shift
  their premium cost to taxpayers
• 10,000 premium, with employer paying 8,000
• Now employer can pay 5,000 and let the taxpayers
  subsidize the balance
• Eventually, forcing creation of a payroll tax to
  support the cost overruns

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What does this mean for employers?

• Become the states H.R. department reporting to
  the state about employee health insurance status
• Garnishing wages
• Accounting for and paying premium to the Exchange
• Employers do not want this - Survey

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What does this mean to employees?

• Moving to the lowest benefit plan offered through
  the Exchange
• Employees could pay more of their own premium,
  and be incented to greater utilization
• Could eliminate the use of HSA-qualified health
  plans for middle- and low-income residents

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What qualifies government to micromanage private
insurance?

• Non-government employers insure 2.25 employees
  for the same cost as government insures only one
  of their employees

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What qualifies government to micromanage private
insurance?

• Minnesota employs about 50,000 people who are
  enrolled in its health insurance
• During 2008, Minnesota will pay more than 460
  million in premium for its enrolled employees
  (Employees pay 43 million8.5of the total
  premium)
• Average benefit cost per hour is 4.44 compared
  to 1.79 for private employers (2.5 times
  greater)

Bruce Yurich, MN Department of Employee
Relations
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Transfer of health care wealth to low-income
residents

• With a private plan for state employees, the cost
  savings of 275 million could pay the health
  insurance cost of 74,000 low-income residents
  with no other state subsidy
• So what is the reason that government is trying
  to reform private health insurance?

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Uninsured in Minnesota
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Uninsured in Minnesota

• Reasons for increase in uninsurance
• 1- Decrease in employer-based health insurance
  coverage
• 2- Changes in employment
• 3- A shift in income distribution
• 4- Change in the composition of the
  Hispanic/Latino population

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54 Percent of uninsured eligible for government
health plans but didnt sign up!
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What do agents do best?

• Insure the uninsured
• Allow agents to enroll people into government
  health plans
• Sell affordable health insurance not prepaid
  health care

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Consumerism has helped to reduce premium
inflation in 2007

• Traditional health plan
• 15-20 co-pay, 100

• Consumer Directed Health Plan
• 2,000-2,500 deductible, 100 HSA plan

3.36
-5.14
Premium change, 1/1/07 to 12/31/07
Combined, small group pool BC-BS, HP, Medica,
PreferredOne
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Do you own a car?
We dont have health insurance We have prepaid
health care
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Consumer-Driven Health Care

• Claritin
• 75 a month (900 a year)
• Over the counter at 25 (300 a year)
• Generic Loradatine
• 15 a year

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Consumer-Driven Health Care

• Lasik Surgery
• 10,000 an eye in 1991
• 2,000 an eye in 2007
• As little as 300 an eye
• Financing available
• Elective surgery usually paid out of pocket no
  insurance coverage

Actual cost of a surgical package
Allaboutvision.com
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How to reduce cost in an Americanized health care
system Consumers

• Changing behaviors
• Paying attention to cost
• Taking responsibility for health
• Voluntary health insurance
• Financial incentive

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Consumer-Driven Health Insurance

• High Deductible Health Plans
• Health Savings Accounts (HSAs)
• Pre-tax money

Catastrophic insurance plan HDHP
Health Savings Account
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Why move to consumerism?
One third did not previously offer health
insurance
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The two most effective ways to cure health care

• Healthier people

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The two most effective ways to cure health care

• Healthier people
• People directly paying for more of their own
  health care cost out of pocket

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Consumer-driven health care

• Personal financial stake in health care
• Health, price and value conscious
• More interactive cooperative with doctors
• Wants instant, useful information

Or.
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Government-driven health care

• Leave it to others governments to decide how
  best to live, to eat, to exercise, to take care
  of oneself.

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Which do you prefer?
Government-driven
Consumer-driven
Government
46 cents
54 cents
7.2 of GDP
8.8 of GDP
Loss of Jobs
45 cents
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Which do you prefer?
Government-driven
Consumer-driven
Basic Health Care
46 cents
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Which do you prefer?
Government-driven
Consumer-driven
Basic Health Care
Comprehensive Health Care
46 cents
54 cents
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Which do you prefer?
Government-driven
Consumer-driven
Waiting Lines
Health Care Access
54 cents
46 cents
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Which do you prefer?
Government-driven
Consumer-driven
Loss of Jobs
Jobs Jobs - Jobs
54 cents
46 cents
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Fork in the road
Free Market
Government
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Arming agents for health care reform

• Greg Dattilo
• Co-Author Your Health Matters What You Need to
  Know About U.S. Health Care

Facts Not Fiction What really ails the US
health care system