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Colorado Health Care Reform: The Path Ahead

Colorado Health Care Reform: The Path Ahead. Senator Irene Aguilar, MD. Where we’ve been. Distribution of Health Plan Enrollment for Covered Workers, by Plan Type, 1988-2012. 2%. 1%. 1%. 1%. <1%.

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Colorado Health Care Reform: The Path Ahead

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  1. Colorado Health Care Reform: The Path Ahead Senator Irene Aguilar, MD

  2. Where we’ve been

  3. Distribution of Health Plan Enrollment for Covered Workers, by Plan Type, 1988-2012 2% 1% 1% 1% <1% Note: Information was not obtained for POS plans in 1988. A portion of the change in plan type enrollment for 2005 is likely attributable to incorporating more recent Census Bureau estimates of the number of state and local government workers and removing federal workers from the weights. See the Survey Design and Methods section from the 2005 Kaiser/HRET Survey of Employer-Sponsored Health Benefits for additional information. Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2012; KPMG Survey of Employer-Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), 1988.

  4. Average Annual Premiums for Single and Family Coverage, 1999-2012 $15,745* * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2012.

  5. Cumulative Increases in Health Insurance Premiums, Workers’ Contributions to Premiums, Inflation, and Workers’ Earnings, 1999-2011 Job-based health insurance premiums rise sharply By Tony Pugh, McClatchy Newspapers Posted: 09/28/2011 Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011. Bureau of Labor Statistics, Consumer Price Index, U.S. City Average of Annual Inflation (April to April), 1999-2011; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 1999-2011 (April to April).

  6. 2011: 48.6 Million Uninsured • Government Insurance • 4 Million CO Medicaid = 560,722 CHP + = 69,008 2011 Colorado: 829,180 uninsured 16% of population

  7. Health Insurance Coverage in the U.S., 2011 SOURCE: KCMU/Urban Institute analysis of the 2012 ASEC supplement to the CPS. Uninsured, 16% Medicaid/Other Public, 18% Medicare, 13% Employer-Sponsored Insurance, 49% Private Non-Group, 5% Total = 307.9 million

  8. Where we’re going

  9. PATIENT PROTECTION AND AFFORDABLE CARE ACT 2010 • Prohibited Rescission • Prohibited denial of coverage to children with pre-existing conditions • Eliminated lifetime limits on coverage • Required Free Preventive Care • Allowed children under 26 to stay on parents’ plans

  10. PATIENT PROTECTION AND AFFORDABLE CARE ACT 2010 • Medicare donut hole rebate of $250 • Required insurance companies to justify premium increases

  11. PATIENT PROTECTION AND AFFORDABLE CARE ACT 2011 • Implemented Medical Loss Ratio of 80/85% • Prescription drug discounts for seniors • Free preventive care for seniors • Center for Medicaid & Medicare Innovation • Independent Payment Advisory Board • Community First Choice Program

  12. PATIENT PROTECTION AND AFFORDABLE CARE ACT 2012-2013 • Streamline Administrative Function • Payment reform • Increase Medicaid payment for Primary Care and preventive health services

  13. PATIENT PROTECTION AND AFFORDABLE CARE ACT 2014 • Prohibits discrimination due to pre-existing conditions or gender • Requires the purchase of Insurance (individual mandate) • Eliminate annual limits on insurance coverage • Premiums in the individual and small group markets may vary only by family structure, geography, the actuarial value of the benefit, age (3:1) and tobacco use (1.5:1)

  14. 2013 Federal Poverty Levels

  15. PATIENT PROTECTION AND AFFORDABLE CARE ACT 2014 (continued) • Allows expansion of Medicaid to 133% FPL • Premium Tax credits for 133 – 400% FPL • Cost sharing subsidies for those at < 250% FPL • Insurance Exchanges are source for premium assistance : Connect for Health Colorado 1-855-PLANS-4-You www.ConnectforHealthCO.com

  16. Brings together buyers and sellers of insurance • Compare health insurance options and shop for coverage that will take effect as early as January 1, 2014 • Open enrollment will continue until March 31, 2014. • Choice of up to 150 different private health insurance plans from ten carriers • Financial assistance based on income available to close to 500,000 Coloradans

  17. Shoppers may claim the tax credit on their taxes or apply for an advance tax credit to use up-front to reduce the monthly premium   • Customer Service Center are available to guide the process • Reviews and approves insurance products (Qualified Health Plans ) • Essential health Benefits Plan

  18. Small employers can create small group plans from as many as 92 health insurance plans provided by six carriers • For the first time, they can offer their employees a choice of health insurance carriers and health plans   • Small employers can apply for tax credits based on the size and average wages of the business, to help cover the cost of health insurance premiums • Customer service representatives are available to help

  19. As of October 4th • Over 15,000 accounts created • 8,781 calls and chats in the Service Center • 145,000 unique visitors

  20. Colorado’s Next Steps: • Connect for Health Colorado – opened 10.1.13 • Monitor for “gaming” of exchange • Medicaid will be expanded to 133% of FPL • Identify ways to reduce Medicaid “churn” • Continue to work on Cost Control

  21. Table 2: Estimate of ACA Effect, 2016 → → → Source: Dr. Jonathan Gruber’s analysis for the Colorado Health Benefit Exchange, 2011

  22. 22% 39% 29% 10% Dr. Jonathan Gruber 9/16/11

  23. Since 2006, the cost of the state’s insurance program has increased by 42 percent, or almost $600 million. According to an analysis by the Rand Corporation, “in the absence of policy change, health care spending in Massachusetts is projected to nearly double to $123 billion in 2020, increasing 8 percent faster than the state’s gross domestic product (GDP).”

  24. US v. Other G7 Countries Updated OECD website : http://stats.oecd.org/index.aspx The spending per capita numbers were converted from the currency of the country to US dollars by a PPP index. ORIGINAL BY: John A. Nyman, PhD University of Minnesota

  25. American Ingenuity at Work

  26. Drug Prices for 30 Most Commonly Prescribed Drugs, 2006–07US is set at 1.0 Source: IMS Health.

  27. New HampshireInsurers Disparate Payments What is the Price? Range for What Insurance Pays to Health Care Provider Per Procedure Advanced primary care networks Source: CMWF analysis of data retrieved October 2010 from: http://www.nhhealthcost.org/costByProcedure.aspx

  28. Variations Among Academic Medical Centers

  29. Research shows significant variation in health care spending. Medicare Payments per Enrollee, by Hospital Referral Region, 2009 • Source: The Dartmouth Atlas of Health Care. • DENOMINATOR DEFINITION: • A 20% random sample of the enrollment file for beneficiaries age 65-99 enrolled in both Medicare Parts A and B, selected on the basis of the terminal digits in the Social Security number. Patients enrolled in risk-bearing health maintenance organizations (HMOs) are excluded. • ADJUSTMENTS: • Rates are adjusted for age, sex and race using the indirect method, using the U.S. Medicare population as the standard. Gender-specific rates are age and race adjusted; race-specific rates are age and sex adjusted.

  30. Massachusetts: Private, Medicare & Medicaid Payment for Professional Procedures Private Payer Payment Variation Source: Massachusetts Division of Health Care Finance and Policy, Massachusetts Health Care Cost Trends: Price Variation in Massachusetts Health Care Services, May 2011.

  31. IOM: Best Care at Lower Cost 7.2% 9.8% INSTITUTE OF MEDICINE 2012: US Health Care Annual Waste $ 765 Billion 27.5% 24.8% 17% 13.7%

  32. Determinants of Health 2011 U.S. Healthcare Spending: $2.7 Trillion

  33. Number of U.S. Deaths from Behavioral Causes

  34. Concentration of Health Care Spending in the U.S. Population, 2009 Percent of Total Health Care Spending (≥$51,951) (≥$17,402) (≥$9,570) (≥$6,343) (≥$4,586) (≥$851) (<$851) Note: Dollar amounts in parentheses are the annual expenses per person in each percentile. Population is the civilian noninstitutionalized population, including those without any health care spending. Health care spending is total payments from all sources (including direct payments from individuals and families, private insurance, Medicare, Medicaid, and miscellaneous other sources) to hospitals, physicians, other providers (including dental care), and pharmacies; health insurance premiums are not included. Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), Household Component, 2009.

  35. Distribution of Medicaid enrollment & expenditures by eligibility category, FY 2010-2011

  36. Figure 4. Share of Colorado population without health insurance coverage, alternative funding programs, 2015-24.

  37. Cooperative would put Colorado on sustainable path: Spending growing no faster than the GSP Savings grow by “bending the cost curve” by reducing administrative share and restraining drug price inflation

  38. Savings under the Cooperative come from reducing administrative waste SAVINGS: 2016: $7.7 billion @ 16% 2024: $ 24 billion @ 28%

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