Health Insurance Shannon Harr Camille Pane, MD Chris Maher Lauren O’Connor Tom Miller
Overview • Insurance • History of National Health Insurance • HR 676 • Healthy Americans Act • Florida Quality Care Act
Insurance • Insurance: • A contract (policy) in which an individual or entity receives financial protection, or reimbursement, against losses from an insurance company, which pools clients’ risks to make payments more affordable, in exchange for a premium.
Cost-Sharing • Pool money together • “Share the risk”
Delivery & Financing: Self-Pay Patients Payment Providers Services
Delivery & Financing: 3rd Party 3rd Party Payers Payments For Covered Services Premiums & Taxes Claims Ins. Coverage Patients Providers Services Payment (Deductibles, coinsurance, copays)
What does all this Really Mean? • Premium: Amount YOU pay every month • Ex: You pay $250 every month for your insurance plan • Deductible: Amount YOU pay after receiving a service, up to a specified yearly maximum • Ex: Procedure costs $1000, you pay $500 • Coinsurance: % YOU pay after receiving a service • Ex: Procedure costs $1000, you pay 30% or $300 • Copayment: Amount YOU pay every time you are seen by a provider
Government Health Insurance • Government Health Insurance • Medicare • Medicaid • Military health care • TRICARE/CHAMPUS • CHAMPVA • The Department of Veterans Affairs (VA) • SCHIP • State-specific plan • Indian Health Service
Private Health Insurance • Private Health Insurance • Employment-based plans • Direct-purchase plan • Managed Care • HMO • PPO • POS
History: National Health Insurance • (1974) President Nixon introduced a National Health Insurance Program • Employers would be required to provide private insurance for their employees, a separate government system would provide the same benefits for the rest of the population. • Watergate scandal diverted focus • Ford withdrew the administration's plan saying it would make inflation worse.
History: National Health Insurance Continued… • (1993) Clinton Plan • Envisioned creating large regional purchasing alliances that would enroll public and private employees, the self-employed, the unemployed, and Medicare and Medicaid patients. • 1,364 page bill was very complicated and it was bad timing with regards to the markets
Universal Coverage • Personal mandates and subsidies • Every American have health insurance that meets some minimum standard, the gvnt. provides subsidies or tax credits to the poor to enable them to purchase insurance • Single-payer • Imagine Medicare extended to cover all age groups but includes coverage for dental services, long-term care, prescription drugs, and more comprehensive mental health care. • Universal Vouchers • Combines publicly funded social insurance for basic care with competition. Individuals and families would have free choice of plans and freedom to purchase additional services with their own after-tax dollars.
HR 676 110th Congress “A bill to provide for comprehensive health insurance coverage for all United States residents, and for other purposes.”
Sponsors • Introduced by John Conyers, D-MI • Other sponsors: • Kucinich • Rangel
Eligibility • All residents of the U.S. and its territories • No mention is made of legal/illegal immigrant status • Individuals will be presumed eligible if they present for services, but will then need to complete an application
Benefits • Primary care & prevention • Inpatient & outpatient care • Emergency care • Prescription drugs • DME • Long term care • Mental health & substance abuse services • Dental care (non-cosmetic) • Chiropractic care • Vision care & correction • Hearing services including hearing aids
Benefits/Portability • Benefits available anywhere in the U.S. through licensed clinicians • No deductibles, copayments, coinsurance • Private insurers may not sell coverage that duplicates the basic benefit package • Insurers may, however, sell plans that provide benefits not offered through the basic benefit package
Budget • Operating budget • Clinician payments (FFS) • Global budgets for institutional providers • Capitation payments • Administrative costs • Capital expenditures • Construction/renovation of health facilities • Major equipment purchases • Health professional education budget
Funding • Existing sources of revenue for health care • Increasing personal tax on top 5% income earners • Modest & progressive excise tax on payroll/self-employment income • Small tax on stock/bond transactions
Funding continued • System savings will provide huge amounts of $$ • Significantly reduced overhead • Monopsony purchasing power for medications
The Healthy Americans Act of 2007 …guarantees universal, private health insurance for ALL Americans.
Sponsor: Senator Ron Wyden (D, OR) • Senator since 1996 • Served 15 years in U.S. House of Representatives
What is HAA? A new system in which every American will have the power to choose a comprehensive, private health insurance plan in the state of their residency. The insurance will be high-quality yet affordable for every American. Even if they change, lose, or become too sick to work at their job, Americans will always have care.
How does HAA work? The Healthy Americans Act matches insurers with health care consumers in a competitive environment. • This competition should drive down prices Each state will establish a Health Help Agency (HHA) • These HHAs will lower admin costs • Also provide unbiased information about competing private health insurance plans • Determine premium reductions With these resources, individuals will be able to choose which works best for them and their families.
Government’s Responsibility: Ensure every American has and can afford health insurance: • Through the Health Help Agencies • Lower premiums and tax deductions • Individuals will need to verify their enrollment • Done through interaction with state, local, and federal government
Eligibility: All Americans will be covered: • Individual mandate will be implemented • Must purchase one of the options given by the state of residency • Menu of health insurance plans • Coverage must be equal or greater than BC/BS Standard Plan used by Congress • Previous and existing conditions, occupation, genetic information, gender and age will NOT impact eligibility or price paid for insurance.
Benefits • Primary care • Inpatient & outpatient care • Emergency care • Prescription drugs • DME • Mental health & substance abuse services • Dental care (non-cosmetic) • Chiropractic care • Vision care & correction • Hearing services including hearing aids • Wellness and prevention Not covered: • Long-term care
How is the insurance Affordable? One way is to put more money in people’s pockets: • During first two years, employers who currently provide health benefits will convert it to higher wages. • Employees will use the increase to purchase their own private health insurance
How is the insurance Affordable? For employers who currently do not provide health benefits: • Required to pay “Employer Shared Responsibility Payments” (ESRPs) • After the initial two years, ALL employers will be required to pay the ESRPs. • These payments will reflect the ability to pay according size and type of industry What’s wrong with this?
Other Types of Funding: Subsidies will be offered: • Varying up to 400% above the poverty line • Full coverage provided to those below 100% Employers will contribute through a set equation related to business size and yearly profits.
Incentives and Rewards Gives insurers financial incentives: • Have them invest in prevention and disease management • Will give individuals more reason to choose their plans, to keep healthy, and stay with the same insurer • What if large numbers of individuals leave the state? Rewards individuals and their families when they participate in wellness programs • Reduce the monthly premiums Rewards providers for helping their patients stay healthy
Cost Containment: Competition will drive down costs and promote quality. Taxpayers will not be asked to foot the bill for expensive visits to the emergency room, because: • Every individual has adequate coverage • They will use prevention and wellness services Ultimately, the average growth in health care spending will slow by 0.86% between 2007-2016. • Results in savings of $1.48 trillion. Did I miss something? Average increase in annual rate of health care spending = around 10% Will slow by 0.86% b/w 2007-2016… so will be equal to 9.14% in 2016 Yet individuals still have wage raises (after the initial spike) of about 3% annually
Florida Quality Care Act -Group coverage for Floridians until National Health Insurance or HR 676 implemented Proposed Legislation
Call to Action • To stay relevant, Republicans must: • Recognize that universal health coverage is necessary • Come up with a reasonable and rational plan • Stay true to the values of: • Personal responsibility and accountability • Fiscal Responsibility and accountability • The importance of the individual
Out of Necessity… • Due to existing laws (EMTALA, etc.) the burden of the uninsured continually falls on hospitals and physicians • Not cost-effective or a reasonable allocation of resources
…Comes Innovation • Require that everyone in the State of Florida have health insurance • Subsidize the insurance for the working poor • Use Florida’s most abundant natural resource (tourists) to be the primary funding for this program
BENEFITS Coverage for deserving and eligible Floridians Resurgence of the small to mid-sized business sector Rewards capitalism and competition Self-reliance & freedom of choice Emphasizes responsibility and accountability COSTS Citizenship requirement (keeping with R. values) Coverage is limited to allow for universal provision but can be augmented based on individual contributions (choices still remain) Private health insurance & drug companies could feel a squeeze (Or would they?) But is it Republican?
Who to Draw In? Small to mid-sized business owners & employees Working Americans on Cusp- no handouts but sense of having earned right to healthcare Who not to isolate ($$$) Big Pharma Private Health Insurance Companies Target Groups
Handling Big Pharma • Emphasize that lower prices throughout industry doesn’t mean less income • More insured= more medication/rx’s • Better coverage reduces need for generics • Kick-backs for research endeavors (i.e., focus on science, not marketing) • Blame Canada
Private Insurance Co’s • Private insurance is not eliminated: • Insurance is required for all Floridians. • Florida coverage is optional for those eligible but those who choose/prefer private insurance can still have it. • Private insurance can actually expand by focusing on benefits not covered by statewide insurance system (ie. cosmetic, preventative care etc…). • Become health investment sources for HSA, LTCSA and investment options.
Employers Relieves burden from those who can’t afford to offer private insurance for all employees Employee contributions and freedom of choice eliminates the employer “bad guy” perception Healthier workers are more productive workers More quality employees to smaller sector as benefit gap diminishes Employees Continued coverage for self and family reduces unemployment fears Choose occupations based on motivation/education, not benefit packages Customization and personal contributions allow for independent need and long-term care contribution Your $ doesn’t die with you Long Live the Entrepreneurial Spirit
Plan Summary • Provide statewide health insurance coverage for the working poor. • $200 individual deductible, max $400/family to offset costs and prevent abuse • Graduate student tax deductions in amount of deductible to encourage higher education • Freedom to choose facility and provider with specialist exception (recommendation required)
Features • No Cards= Government invasion of privacy (FL license, ID or birth certificate is enough) • General benefits include 1 annual dental cleaning & medically necessary dental work, 2 year vision screening and 1 pair prescription glasses, mental health treatment and counseling, all physical health needs done through private physicians (ER visits only as necessary). • Vaccination coverage • 80% prescription coverage (rest covered by HSA etc…)
Features Cont… • Freedom to contribute to HSA account • Freedom to contribute to LTCSA • Freedom to invest in stock market with capital gains exemptions up to bracket allowances (brackets based on age, dependents, income)
HSA Accounts annual rollover portable LTCSA tax exempt Portable Trust 10 year max (C.O.L increases) Encourage Market Involvement allow tax exempt investments More Ideas to Incorporate – Individual Funding & Contributions
More Ideas – Financial Benefits for Organizations Involved • Limits on liability for health industry • Limits on malpractice premiums for health workers • Financial rewards and tax breaks for biomedical research
Show Me the Money • How is it going to get paid for? • This plan must be distinctly Floridian… • Therefore, we use Florida’s most abundant natural resource; which is what?
Tourists • They come to FL with bags full of money just itching to spend it. • In fact, they spent about $62 Billion in 2005.