U.S. Health Insurance Policy: Recent History and Future Directions - - PowerPoint PPT Presentation

U.S. Health Insurance Policy: Recent History and Future Directions

North Carolina Institute Of Medicine Legislative Health Policy Fellows Program

S ara R. Collins, Ph.D. Vice President, Health Care Coverage and Access The Commonwealth Fund Morrisville, NC January 22, 2018

S

• urce: The Commonwealth Fund, Mirror, Mirror On the Wall, 2017 Update

EXHIBIT 1

‘Mirror Mirror’

Rankings of Health System Performance

2 4 6 8 10 12 14 16 18 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 United States (17%) France (12%) Sweden (12%) Switzerland (11%) Japan (11%) Germany (11%) Netherlands (11%) Canada (11%) United Kingdom (10%) New Zealand* (11%) Norway (9%)

2013, ** 2012 GDP refers t o gross domest ic product . S

• urce: OECD Healt h Dat a 2016. Not e: Aust ralia, Germany, Japan, Net herlands and S

wit zerland dat a is for current spending only, and excludes spending on capit al format ion of healt h care providers.

EXHIBIT 2

U.S. Spends More than Other Countries

Health Care Spending as a Percentage of GDP 1980–2014

Percent

EXHIBIT 3

Doctor visits

Per capita

Hospital discharges

Per 1,000

Hospital average length of stay

Days, acute care

U.S. Patients Often Get Less Care

S

• urce: OECD Health Data 2016 and 2017.

Data years: 2015, 2014, 2013, 2012, 2010, 2009.

2.9 3.7 3.9 4.0 4.3 5.0 6.3 7.3 7.6 8.0 9.9 5 10 15

SWE NZ SWIZ US NOR UK FRA AUS CAN NETH GER OECD median

84 119 125 128 150 153 163 168 170 174 255 50 100 150 200 250 300

CAN NET US UK NZ SWE FRA NOR SWI AUS GER OECD median

4.7 5.2 5.4 5.4 5.5 5.8 5.8 6.0 6.4 7.5 7.6 2 4 6 8 10

AUS NZ SWE US NOR FRA SWIZ UK NET CAN GER OECD median

… Although, Som etim es Get More Care

EXHIBIT 4

S

• urce: OECD Healt h Dat a 2016

Canada MRI machine dat a from 2013, Germany MRI exam dat a from 2012, Japan and Net herlands exam dat a from unpublished Commonwealt h Fund grant .

4 6 9 11 13 15 31 38 52 10 20 30 40 50 60 ISR UK CAN FR NETH AUS GER US JPN

Magnetic Resonance Imaging (MRI) machines per 1,000,000 population

Marina Karanikolos, European Observat ory on Healt h S yst ems and Policies (2017). Trends in amenable mort alit y for select ed count ries, 2014. Dat a from 2014 in all count ries except Canada (2011), France (2013), Net herlands (2013), NZ (2012), S wit zerland (2013), UK (2013). WHO Mort alit y files (number of deat hs by age group) and populat ions (except Human Mort ality Dat abase for Canada, UK and t he US A). List of amenable causes: Nolt e & McKee 2004 (Aust ralia, Canada, NZ, Nor, US ) Calculat ions by European Observat ory on Healt h S yst ems and Policies (2016), Amenable mort alit y causes based on Nolt e & McKee, 2004. Mort alit y and populat ion dat a from WHO mort alit y files, released S ept ember 2016 (populat ion dat a for Canada and t he US A from Human Mort ality Dat abase). Age-specific rat es st andardised t o European S t andard Populat ion 2013.

EXHIBIT 5

US Adults Often Have Poorer Outcom es

Avoidable Deaths: Mortality Am enable to Health Care, 20 14

55 61 62 64 69 72 78 83 85 87 112 20 40 60 80 100 120 S WIZ FRA AUS NOR S WE NETH CAN GER UK NZ US

Deaths per 100,000 population*

Employment- Based Coverage 156 m Medicaid & CHIP 69 m Marketplace & Individual Coverage 17 m Medicare 50 m Other 4 m Uninsured 28 m

S

• urces:

Federal S ubsidies for Healt h Insurance Coverage for People Under Age 65: 2017 t o 2027. Congressional Budget Office, S ept ember 2017. Current Populat ion S urvey dat a.

EXHIBIT 6

The U.S. Health Insurance System is Highly Fragm ented

324 million people, 2017

EXHIBIT 7

Federal and state revenues are a m ajor source of financing across all coverage types

Source of Financing

Medicaid Federal and state general revenues Medicare Federal payroll taxes and enrollee premiums Employer- S ponsored Insurance Federal employer and employee tax exclusion; employer and employee premium contributions Individual and Marketplace Various federal taxes and general revenues, enrollee premiums, employer and individual mandate penalties, insurer fees

EXHIBIT 8

Benefits vary by coverage source

Benefits

Medicaid Comprehensive Medicare Comprehensive, no long-term care Employer- S ponsored Insurance Comprehensive on average, but no national standard Individual/ Marketplace & S mall Group Comprehensive, federal floor set by ACA

EXHIBIT 9

Cost-sharing varies by coverage source

Cost-Sharing

Medicaid Minimal with monthly or quarterly cap 5 %

• f income

Medicare High; supplemental public and private insurance Employer- S ponsored Insurance Variable, but has increased significantly over time Individual/ Marketplace & S mall Group High; lower for lower income ACA marketplace enrollees

EXHIBIT 10

Major U.S. Policy Changes That Increased Insurance Coverage

1964 Medicare 1965 Medicaid 1997 Children’s Health Insurance Program 2010 Affordable Care Act

1960 1980 2000 1970 1990 2010

5 10 15 20 25

Percent of individuals without health insurance*, 1997 – June 2017

Under 18 18 - 64

Not es: * At t he t ime of int erview. 2017 dat a is for January – June 2017. S

• urce: Early Release of S

elect ed Est imat es Based on Dat a From t he January– June 2017 Nat ional Healt h Int erview S

• urvey. Nat ional Cent er for Healt h S

t at ist ics, December 2017.

EXHIBIT 11

Uninsured Rates Have Fallen In Response to Policy Changes

Uninsured Rates Fell in All States After The ACA Major Coverage Expansions

10% –14% (18 states) 15% –19% (18 states)

≥20% (10 states)

10% –14% (18 states) 15% –19% (5 states)

Percent of Population Under Age 65 Uninsured, 2013−2016

2013 2016

< 10% (4 states plus D.C.) < 10% (27 states plus D.C.)

Not es: “ D.C.” st ands for Dist rict of Columbia. Dat a source: U.S . Census Bureau, 2013 and 2016 1-Y ear American Communit y S urveys, Public Use Micro S ample (ACS PUMS ).

EXHIBIT 12

38% 42% 34% 34% 11% 29% 19% 31% 0% 10% 20% 30% 40% 50%

Kentucky North Carolina Kentucky North Carolina

2013 2016

Not e: FPL refers t o Federal Povert y Level. *Ages 19-64 for uninsured rat e, age 18 or older for going wit hout care because of cost and wit hout a usual source of care. S

• urce: S

. L. Hayes, S . R. Collins, D. C. Radley, and D. McCart hy, What ’s at S t ake: S t at es’ Progress on Healt h Coverage and Access t o Care, 2013– 2016, The Commonwealt h Fund, December 2017.

EXHIBIT 13

North Carolina Im proved on Key Access Measures, but Gains Were Sm aller Com pared to Kentucky

Percent of low-income (<200% FPL) adults* Uninsured Went Without Care Because of Cost

16.7

• 10.5
• 6.6

11.2 5.1

• 20
• 10

10 20

Has a personal physician*** S kipped medication due t o cost*** Any ED visit s in past year** Regular care for chronic condition** Excellent self- reported health*

p < .10. ** p < .05. *** p < .01. Adapt ed from B. D. S

• mmers, B. Maylone, R. J. Blendon et al., “ Three-Y

ear Impact s of t he Affordable Care Act : Improved Medical Care and Healt h Among Low-Income Adult s,” Healt h Affairs Web First , published

• nline May 17, 2017.

EXHIBIT 14

Low-Incom e Adults in Arkansas and Kentucky Experienced Marked Im provem ents in Health Care Access and Affordability Following Medicaid Expansion Com pared to Adults in Texas, Which Did Not Expand Medicaid, 20 16

Percent age point change since baseline (2013) compared t o non-expansion st at es (Texas)

EXHIBIT 15

• Trump Administration’s decision to end cost-sharing reduction (CS

R) payments.

• Open enrollment 2018: Cuts in advertising and navigator funding; shortened by

45 days.

• Repeal of the individual mandate penalties in tax bill.
• New DOL proposed rule to increase access to association health plans.
• Expected proposed rule to extend short term insurance policies to 12 months.
• New regulations for 2019 marketplace plans allow states greater flexibility to

determine what health plans cover.

• Points to fragmentation of insurance markets with considerable challenges for

states.

Major Federal Insurance Policy Developm ents, 20 17-18 : Im plications for State Individual and Sm all Group Markets

EXHIBIT 16

• Premiums were 20 percent higher on average.
• 36 states followed CA and allowed insurers to load their premium

increases on silver marketplace plans.

• This meant that federal premium tax credits increased: many

subsidized consumers paid less than 2017, federal government paid more in tax credits than it would have on CS Rs.

• Unsubsidized enrollees in some states faced higher premiums, but

enrolling outside marketplaces may have saved people money.

• Alexander-Murray bill would restore the CS

R payments for future years but fate is uncertain.

States Managed Loss of CSR Paym ents Effectively

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Week of Open Enrollment

2017 2018

Dat a: Cent er for Medicare and Medicaid S ervices. Not e: The above dat a are for st at es using healt hcare.gov and do not include st at e-based market places.

EXHIBIT 17

Final Healthcare.gov Open Enrollm ent 95% of 20 17; Ten States Extended OE

OE 2018 ended

• n Dec. 15, 2017

9.2M plan selections total for OE 2017 8.7M plan selections total for OE 2018

EXHIBIT 18

• Insurers will respond by increasing premiums, some may not
• ffer plans.
• Most enrollees will be protected from increases by tax credits,

but potential for “ bare” counties, and some will pay more.

• S

tates have the legal authority to require residents to have health insurance and impose penalties on those who don’ t comply, but would have to act quickly to give insurers sufficient time to set rates for 2019.

• S

tates can increase outreach efforts to consumers and insurers.

• S

tates may continue to pursue reinsurance options through 1332 waivers.

Mandate Penalty Repeal: What States Can Do to Maintain Market Stability

EXHIBIT 19

• The rule would increase the availability and popularity of these plans.
• Three ways consumers and state insurance markets could be hurt:
• 1. Plans have a history of fraud and insolvency that have left

consumers and providers with unpaid medical claims.

• 2. Plan enrollees could lose the ACA

’s consumer protections such as essential health benefits, and bans or limits on rating on gender, age, industry/ occupation, and other factors.

• 3. If healthier people leave the ACA

’s regulated individual and small group markets, people and businesses who rely on them could see higher premiums and less plan choice.

• Will states retain their authority to regulate these plans and what will

be the extent of that authority? In particular, will states be prevented from protecting consumers against fraud and insolvent health plans?

Association Health Plan Proposed Rule Could Preem pt States’ Authority

EXHIBIT 20

• Ban or limit short-term policies
• Require compliance with individual market rules.
• Limit duration.
• Require nonrenewable short-term plans to discontinue on Dec. 31.
• Reduce risk of premium hikes on ACA compliant policies
• Assess insurers that offer short-term plans and use $ for reinsurance.
• Require minimum medical loss ratios.
• Increase consumer disclosures and regulatory oversight.

Short-Term Plans: What States Can Do to Protect Consum ers & Maintain Stability

S

• urce: S

abrina Corlet t e, et al., “ S t at e Opt ions t o Prot ect Consumers and S t abilize t he Market : Responding t o President Trump’s Execut ive Order on S hort -Term Healt h Plans,” Georget own Universit y Cent er on Healt h Insurance Reforms, December 2017.

S

• urce: E.A. McGlynn, A Cordova, J. Wasserman, and F

. Girosi, “ Could We Have Covered More People at Less Cost ? Technically Y es: Polit ically Probably Not ,” Healt h Affairs 29, no. 6 (2010): 1142-1146, ht t p:/ / cont ent .healt haffairs.org/ cont ent / 29/ 6/ 1142.abst ract

EXHIBIT 21

The ACA Has Expanded Health Insurance Relatively Efficiently

100 120 140 160 180 200 220 240 15 20 25 30 35

More covered, higher cost Fewer covered, higher cost

New insured people (millions)

Fewer covered, lower cost More covered, lower cost

Government spending (billions of dollars) ACA

Lifting the 400% FPL cap Standard reinsurance Generous reinsurance

Change in individual market enrollment

1.6 m 1.2 m 5.4 m

Change in premiums

• 2.5%
• 3.9%
• 19.3%

Net deficit impact

$4.9 b

• $2.9 b
• $13.1 b

S

• urce: C. Eibner and J. Liu, Options to Expand Health Insurance Enrollment in the Individual

Market, The Commonwealth Fund, October 2017.

EXHIBIT 22

Options to Increase Affordability of and Enrollm ent in Individual Market Plans

Building on the ACA Medicaid Buy-In Medicare Buy-In Publicly Financed Insurance (International) Publicly Financed Health Care (International)

EXHIBIT 23

Pathways to Universal Coverage

Acknowledgm ents

Munira Z. Gunj a S enior Researcher, Health Care Coverage & Access Michelle M. Doty Vice President, S urvey Research & Evaluation Herman K. Bhupal Program Assistant, Health Care Coverage & Access