Strategies for Increasing Healthcare Access

1. Strategies for Increasing Healthcare Access Flávio Casoy(adapted from Kao-Ping Chua and Vanessa Calderón)Jack Rutledge FellowAmerican Medical Student Association

2. It takes more than medical school to make a physician!

3. AMSA - the nation’s OLDEST and LARGEST independent health professional student association • Entirely Student Led. • Over 68,000 members. • Over a million community service hours each year. • For 58 years, a progressive voice in American medicine. • Unites the voices of physicians-in-training to fight for a healthcare and medical education system that reflect OUR values!!

4. International perspective Total Spending on Health Care, 2005 Source: OECD Health Data 2007

5. International perspective Health Care Spending per Capita, 2005 Source: OECD Health Data 2007

6. Health status and outcomes Life Expectancy at Birth, 2004-5 Source: OECD Health Data 2007

7. Health status and outcomes Infant Mortality, 2004-5 Source: OECD Health Data 2007

8. Outline • Insurance Coverage in the U.S. Health Care System • Strategies for Increasing Health Care Access: Pros and Cons

9. Insurance Coverage in the US Health Care System

10. Health insurance coverage of non-elderly population

11. Profile of the uninsured • 47.0 million Americans • 81% from working families • 52-59% from low-income families (200% FPL) • 80% are adults • 50% are ethnic minorities • 79% are American citizens Source: Kaiser Commission on Medicaid and the Uninsured Source: US Census Bureau

12. Health insurance coverage of non-elderly population

13. Employer-sponsored insurance • Offered by employers as part of benefits package • Administered by private insurance companies (for-profit and non-profit) • Employer pays bulk of premium; employee pays remainder • Significant erosion of employer-sponsored insurance in recent years

14. Health insurance coverage of non-elderly population

15. Individual insurance • Purchased directly by people who do not get coverage through their employers • Non-group (individual) plans • Premiums based on individual health risk • High-risk individuals with limited access • High Deductibles • Administratively expensive

16. Health insurance coverage of non-elderly population

17. Medicare • Covers elderly (ages 65 and older) and non-elderly with disabilities • Administered by the federal government (essentially a single-payer system) • Financed through: • Federal income taxes • Payroll taxes • Out-of-pocket payments by enrollees

18. Medicare • Four parts: • Part A – hospital insurance • Part B – supplemental insurance • Part C – managed care • Part D – prescription drugs • Significant coverage gaps - most enrollees obtain supplemental insurance • Spending growth generally slower than private insurance • Aging population and increased technology presents challenges for the future

19. Medicaid • Covers certain low-income individuals; not every poor person is covered! • Administered by state governments • Often out-sourced to non-government administrators • Financed jointly by the state and federal governments • Benefits are fairly comprehensive, but many providers won’t take care of Medicaid patients

20. Minimum Medicaid Eligibility Levels, 2004 Income eligibility levels as a percent of the Federal Poverty Level: Note: The federal poverty level was $10,488 for a single person and $16,079 for a family of three in 2006. SOURCE: Cohen Ross and Cox, 2004 and KCMU, Medicaid Resource Book, 2002.

21. State Children’s Health Insurance Program (S-CHIP) • Supplements Medicaid by covering low-income children who are ineligible for Medicaid • Administered and financed similarly to Medicaid • Similar problems to Medicaid: • Low reimbursement rates → some providers refuse to accept S-CHIP • Under-enrollment • Eligibility varies by specific populations and states

22. Strategies for Increasing Healthcare Access

23. Public Program Expansions: Medicaid, CHIP, Medicare Do nothing; market will fix itself National Health Insurance* Tax credits Individual Mandates Employer Mandates Individual Commodity Public Good U.S. system *Health care system adopted by every other industrialized democracy

24. Tax credits • AMA plan - offer tax credits to people to purchase health insurance. • Tax credits would be: • Inversely related to income • Contingent upon purchase of health insurance • Refundable • Advanceable • Financed by repeal of tax subsidy

25. Tax credits - pros • Makes health insurance available to more people • Keeps current system in place • Tax infrastructure already in place • May increase choice of insurance plans

26. Tax credits - cons • Not universal • Builds on individual market (inefficient and discriminatory) • Problems of current system would remain • Employers tempted to drop coverage • No cost controls • No guarantee that competition will help • Does not take co-pays and deductibles into consideration

27. Public Program Expansions: Medicaid, CHIP, Medicare Do nothing; market will fix itself National Health Insurance* Tax credits Individual Mandates Employer Mandates Individual Commodity Public Good U.S. system *Health care system adopted by every other industrialized democracy

28. Individual mandates • Force everyone to have health insurance through some mechanism: • Employer-based • Medicaid • Individual market • People would pay a penalty for not having health insurance

29. Individual mandates - pros • Achieves close to universal coverage • Easily understood • Leaves current system in place • Appeals to “anti-freeriding” ethic

30. Individual mandates - cons • High cost of purchasing health insurance • Disproportionately burdensome to low-income individuals • Builds on inefficient individual market • No cost controls • Difficulty and cost of enforcing mandate • Deductibles, co-pays

31. Individual mandates - cons • Massachusetts – Individual Mandate • Single, male, 26 year-old, earning 301% FPL - $2,631 per month, in Framingham, MA • Premium: $150/month • Drugs: $30/generics, 50% for brand names • Co-pay $25 per doctor visit, $100 per ED • Procedure, Study, or Hosp stay: $2000 Deductible + 20% co-insurance • $5000 max out of pocket (not counting drugs or visits to doctors or EDs)

32. Public Program Expansions: Medicaid, CHIP, Medicare Do nothing; market will fix itself National Health Insurance* Tax credits Individual Mandates Employer Mandates Individual Commodity Public Good U.S. system *Health care system adopted by every other industrialized democracy

33. Employer mandates • Variation #1: Employers forced to provide health benefits to employees • Variation #2: Play-or-pay – employers provide health benefits that meets certain standards or submit to payroll tax to fund public coverage for employees

34. Employer mandates • Low-wage employers temporarily subsidized • Expansion of Medicaid for unemployed or others who don’t get health insurance through their employer

35. Employer mandates - pros • Achieves close to universal coverage • Builds on current system • Levels the playing field for employers • People like getting health insurance from their employer (mostly) • Most of new cost is hidden from employees

36. Employer mandates - cons • Opposition from many businesses • Disproportionately burdensome for small businesses • Implicit tax on employees (lower wages) • Potential layoffs of low-wage jobs • Inhibits creation of new jobs • No cost controls • Disadvantages of employer-based system (non-portability, economic strain on businesses)

37. Public Program Expansions: Medicaid, CHIP, Medicare Do nothing; market will fix itself National Health Insurance* Tax credits Individual Mandates Employer Mandates Individual Commodity Public Good U.S. system *Health care system adopted by every other industrialized democracy

38. Public program expansion • Expand eligibility of Medicaid, S-CHIP, and other public programs to more people • Examples: • Expansion by income – cover everyone under 200% of poverty level • Expansion by demographic – cover childless adults

39. Public program expansion - pros • May lead to universal coverage eventually (pincer strategy) • Infrastructure largely in place already • Leaves current system in place • Potential political support to expand access to some groups (esp. children)

40. Public program expansion - cons • Not necessarily universal coverage • Anti-welfare sentiment • Lack of a political voice of potential beneficiaries • Access problems with Medicaid/S-CHIP • May be seen as unjust • May “take the wind out of the sails” of more comprehensive reforms

41. Public Program Expansions: Medicaid, CHIP, Medicare Do nothing; market will fix itself National Health Insurance* Tax credits Individual Mandates Employer Mandates Individual Commodity Public Good U.S. system *Health care system adopted by every other industrialized democracy

42. National health insurance • NHI = having a health insurance plan that is available to everyone • Does not specify financing (single payer vs. multi payer) • Does not specify whether DELIVERY of health care is public or private

43. Countries with NHI …(South Africa) Industrialized countries without NHI? only one …

44. Example of NHI: Single payer • Government becomes main reimburser of health care providers • Universal coverage for defined services • Automatic enrollment • Private insurance for “supplemental” benefits • Financed by taxes, offset by less premiums • Delivery remains mostly private

45. Single payer - pros • Universal coverage • Greatly reduced administrative costs • Coverage is portable (not tied to employment) • Free choice of doctors and hospitals • Very little uncompensated care • Greater potential to control costs • More rational and efficient allocation of resources and technology

46. Single payer - cons • No choice in insurance plans • Potential for underfunding by hostile government or recession • Potential for mismanagement • Politically more difficult • Special interests • Transition period • Resistance to taxes

47. Public Program Expansions: Medicaid, CHIP, Medicare Do nothing; market will fix itself National Health Insurance* Tax credits Individual Mandates Employer Mandates Individual Commodity Public Good U.S. system *Health care system adopted by every other industrialized democracy

48. Conclusion: How do you evaluate a solution? • Every solution has disadvantages, no matter what. Based on your values, you can select which disadvantages are outweighed by the advantages. • If you value a profit-driven industry that sees healthcare as a commodity, tax credits may be appealing. • If you value universality and comprehensiveness, NHI may be appealing.

49. What does AMSA support? • For the last 15 or so years, AMSA has supported a public, single, national health insurance system to ensure that everyone has access to affordable, quality heatlhcare. • Actively fight for sCHIP, Medicare, Medicaid, Community Health Centers, Title VII, and much more….

50. More Ways To Get Involved: • JOIN MEDICAL STUDENTS JUST LIKE YOU – JOIN AMSA! www.amsa.org • Attend Your Regional Conference: • 1,2,3: Nov 9th – Nov 11th ~ Portland, ME