Health Reform: Déjà Vu All Over Again? Health Care Forecast Conference

1. Health Reform: Déjà Vu All Over Again? Health Care Forecast Conference University of California, Irvine February 25, 2010

2. And speaking of vu…

3. Growing problem of obesity legislative • House • 7/14 – TriComm – 1,018 pages • 10/29 – HR 3962 – 1,990 pages • 11/7 – Engrossed bill – 2,016 pages • Senate • 6/9 – HELP – 615 pages • 10/19 – SFC – 1,502 pages • 11/18 – Reid HR 3590 – 2,074 pages • 12/24 – Engrossed bill – 2,409 pages

4. So many pages, so little time • Perfectibility of regulation— if not of man • Attempt to solve every conceivable problem • Solution Problem Solution … • But the bills are incomplete Scores of new advisory and regulatory bodies Obama plan continues this strategy

5. Conflicting policy objectives • Expand insurance coverage—cut the deficit • Expand benefits—lower costs • Allow everyone to keep what they have—change what insurance is required to do • Promote choice—keep most people in ESI • Lower premiums—eliminate underwriting • Cut Medicare payments—maintain program benefits • Promote economic growth—tax business

6. Building blocks of House, Senate bills • Health insurance exchange • Insurance regulation • Mandates • Subsidies • Medicare cuts • Tax increases • Earmarks

7. Broad similarities • Big money • Coverage: House $891 B, Senate $871 B • Medicare cuts: H $453 B, S $438 B • Taxes1: H $806 B, S $638 B • Big regulation • Mandates – individual and employer • Guaranteed issue, no pre-ex, no rescissions, rating bands, minimum benefit package, medical loss ratio • Insurance exchanges • Tax credits, Medicaid expansion • “Nice” ideas: ACOs, medical home, bundled payment, prevention, CER, quality measures, fraud/abuse, FOBs, etc. 1Excludes tax credits which reduce net revenue: H $25 B, S $140 B

8. Major disagreements • Millionaire’s tax vs. Cadillac tax • H: 5.4% surcharge, income>$1 M (joint) • $460.5 B • S: 40% excise tax, coverage>$8,500/$23,000 • $148.9 B, supplemented by add’l 0.9% HI payroll tax on wages>$250,000 (joint) ($86.8 B), insurer fee ($59.6 B), Pharma fee ($22.2 B), others • National vs. state-level insurance exchange • Public option vs. none • Permanent fix, SGR vs. none • H: $209 B—but hidden in separate bill • Part D donut hole phase-out vs. one-time fill-in • H: Rx discount + duals rebate; S: Discount + $500 reduction

9. Other differences

10. Why the stalemate? The Republicans are our opposition. The Senate is our enemy. Rep. Anthony Weiner (D-N.Y.), January 27 after SOTU