Health Care Organizations and Finance

Unit 9 Town Hall Seminar Health Care Organizations and Finance

Topics for Discussion Representative Baucus' plan for health care reform and state plans that will reform health care at the state level.

Baucus' plan The centerpiece of the Obama-Baucus plan is a decree that everyone purchase heavily regulated insurance policies or else pay a penalty. This government mandate would require huge subsidies as well as brute force to get anywhere near the goal of universal coverage. The inevitable result would be a vast increase in the government's share of U.S. health spending, forcing doctors, hospitals, insurance companies and other health providers to serve politics as well as or even over and above patients.

Question • Do you believe the Health Care Reform Bill, as those in the Senate and the House , are being drafted in a Bi-Partisan way or a Partisan way? • If you believe they are being passed in a Partisan way, what is the advantage of one political party getting credit for the final Bill signed into law?

Baucus' plan The plan essentially rewrites all insurance contracts, including those offered by businesses to their workers. Benefits and premiums must be tailored to federal specifications. First-dollar coverage would be mandated for many services, and cost-sharing between businesses and employees would be sharply reduced, though this is one policy that might reduce health spending by giving consumers more skin in the game. Nor would insurance be allowed to bear any relation to risk.

Baucus' plan The subsidies in the Baucus plan go to people without a job-based plan and who earn under three times the federal poverty level, or about $66,000 for a family of four.

Baucus' plan Everyone would be forced to buy these government-approved policies, whether or not they suit their needs or budget. Families would face tax penalties as high as $3,800 a year for not complying, singles $950.

Baucus' plan Like the House bill, Mr. Baucus uses 10 years of taxes to fund about seven years of spending. Some $215 billion is scrounged up by imposing a 35% excise tax on insurance companies for plans valued at more than $21,000 for families and $8,000 for individuals. $59 billion would be raised by taxing the likes of clinical laboratories and drug and device makers.

Baucus' plan Mr. Baucus wants to cut $409 billion from Medicare, according to the CBO, though it is argued the only money that is certain to see the budget ax is $123 billion from the Medicare Advantage program.

Pre-existing Insurance Conditions • Would bar insurance companies from dropping a policyholder in the event of illness as long as that person had paid his or her premium in full. • It would add new protections for people with pre-existing conditions and establish tax credits to help low-and middle-income families purchase insurance coverage. • Insurance companies also would be barred from imposing annual caps or lifetime limits on coverage. Individuals, however, would be fined up to $950 annually for failing to obtain coverage; families could be fined as much as $3,800.

Question • What about the pre-existing condition of one who has lung cancer from years of smoking? • Should someone who does not take measures in taking precautions by quitting smoking, fall under the pre-existing conditions?

Medical Malpractice • States would be encouraged "to develop and test alternatives to the current civil litigation system" as a way to help reduce skyrocketing malpractice costs, the summary noted.

Question • Who should pay for frivolous law suits? The plaintiffs, the lawyers, or both? • Is this fair to hold individuals accountable for filing frivolous law suits? Who decides what is a frivolous law suit?

Baucus' plan To sum up, the Baucus-Obama plan might increase the cost of insurance and then force people to buy it, requiring subsidies. Those subsidies would be paid for by taxes that make health care and could make insurance more expensive, requiring even more subsidies and still higher taxes.

State Plans National Association of State Comprehensive Health Insurance Plans “The National Association of State Comprehensive Health Insurance Plans (NASCHIP) was created in 1993 to provide educational opportunities and information for state high risk health insurance pools that have been, or are yet to be, established by state governments to serve the medically "uninsurable" population.”

About Pools Health insurance risk pools are special programs created by state legislatures to provide a safety net for the "medically uninsurable" population. These are people who have been denied health insurance coverage because of a pre-existing health condition, or who can only access private coverage that is restricted or has extremely high rates.

About Pools Each of the state risk pool-type programs is different. Generally, the programs operate as a state-created nonprofit Association overseen by a board of directors made up of industry, consumer and state insurance department representatives. The board contracts with an established insurance company to collect premiums and pay claims and administer the program on a day-to-day basis. Insurance benefits vary, but risk pools typically offer benefits that are comparable to basic private market plans -- 80/20 major medical and outpatient coverage, a choice of deductible and co-payments. Maximum lifetime benefits vary by state from as low as $350,000 to $2 million.

Maryland HealthInsurance Plan (MHIP) • MHIP is a state-managed health insurance program for Maryland residents who have been unable to obtain health insurance from other sources. MHIP offers its participants access to both CareFirst BlueChoice HMO and CareFirst Blue Preferred PPO networks. These plans are administered by CareFirst BlueCross BlueShield and CareFirst BlueChoice, Inc.

Washington Basic Health Basic Health is a state-sponsored program providing low-cost health care coverage through private health plans. To be eligible for BH, Washington residents must: • Be between 0-200% of federal poverty guidelines (FPL) • Not be eligible for free or purchased Medicare • Not be receiving Washington Department of Social Services (DSHS) medical services (Medicaid) • Not be institutionalized at the time of enrollment; and • Not be attending school full-time in the United States on a student visa

Question • With states implementing Health Insurance Programs for those who cannot afford it, do we still need Nationalized Health Care? • What about states that are in a fiscal crisis? • Should some states be able to afford it who can and other states who cannot leave the low income citizens without health insurance?

Health Care Mandate Applies to All -- Except the Amish While most Americans will have to prove they have insurance or face a fine under the health reform legislation that is now nearing the finish line in Congress, at least one group won't have to worry.

Health Care Mandate Applies to All -- Except the Amish • Most Americans would have to prove they have insurance or face a fine under the health reform legislation that is now nearing the finish line in Congress, but at least one group won't have to worry, on religious grounds. • Democrats are planning to exempt the Amish and similar religious groups from the health insurance mandate in the final health care bill. • That's because when the Amish need medical care, they go to regular doctors and hospitals and pay in cash often with financial help from their church and neighbors. They rely on each other, not the government or insurance companies as a tenet of their faith.

Health Care Mandate Applies to All -- Except the Amish • “The Amish believe it's the fundamental responsibility of the church to care for the material needs of the members of the church," said Steven Nolt, a professor at Goshen College who has written books on the Plain community of Amish. • "And so they don't buy commercial health insurance and they don't participate in public assistance programs." • So while most Americans would be required to sign up with insurance companies or government insurance plans, the church would serve as something of an informal insurance plan for the Amish.

Health Care Mandate Applies to All -- Except the Amish • But if the Amish can opt out, then some civil libertarians say they want out, too -- not for religious reasons but because they don't think the underlying health insurance mandate is legal. • "If they can do it for religious objection, well, I have a different type of objection," said Ilya Shapiro, a senior fellow in constitutional studies at the libertarian Cato Institute said. "I think I'm being coerced into doing something against my will, and so the challenge would be from a different perspective."

Question • Do you believe there will be legal challenges to the Health Care Reform Bill will individuals are penalized for not obtaining health insurance?

Questions

Sources • http://online.wsj.com/article/SB10001424052970204518504574416930475823324.html • http://naschip.org/portal/ • http://www.marylandhealthinsuranceplan.state.md.us/ • http://www.basichealth.hca.wa.gov/ • http://www.foxnews.com/politics/2010/01/16/health-care-mandate-applies-amish/

Health Care Organizations and Finance