National Health Reform and the 2008 Presidential Election

1. National Health Reform and the 2008 Presidential Election Jennifer Tolbert Principal Policy Analyst, Kaiser Commission on Medicaid and the Uninsured for National Press Foundation November 12, 2007 Washington, DC

2. Number of Nonelderly Uninsured Americans, 2004 - 2006 Uninsured in Millions 46.5 44.4 43.0 SOURCE: KCMU/Urban Institute analysis of March CPS for each year.

3. Average Annual Premium Costs for Covered Workers, 2000 and 2007 $12,106 $6,438 $4,479 $2,471 Family Coverage Single Coverage Note: Family coverage is defined as health coverage for a family of four. Data represents average for all types of plans. SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2007.

4. Cumulative Changes in Health Insurance Premiums, Overall Inflation, and Workers’ Earnings, 2000-2006 Note: Data on premium increases reflect the cost of health insurance premiums for a family of four. SOURCE: Employer Health Benefits, 2006 Annual Survey, Kaiser Family Foundation and Health Research & Educational Trust, September 2006.

5. <200% FPL 200-299% FPL 300% FPL+ Who are the Uninsured? Children Parents Children Other Adults Parents Children Parents Other Adults Other Adults Total = 46.5 million uninsured SOURCE: KCMU/Urban Institute analysis of March 2007 CPS.

6. Trend: Interest in Health Care Rising Percent naming HEALTH CARE as one of the top two issues they’d most like to hear presidential candidates talk about, by political party self-identification: Source: Kaiser Health Tracking Poll: Election 2008

7. Interest in Cost vs. Coverage Which ONE of the following health care issues would you most like to hear the presidential candidates talk about? Reducing the costs of health care and health insurance Expanding health insurance coverage for the uninsured Improving the quality of careand reducing medical errors Reducing spending on government programs like Medicare and Medicaid Source: Kaiser Health Tracking Poll: Election 2008 (conducted October 1-10, 2007)

8. What Plan Does the Public Want? Proposals from 2008 Candidates: A new health plan that would provide insurance for nearly all of the uninsured and would involve a substantial increase in spending A new health plan that is more limited and would cover only some uninsured groups, but would involve less spending A health plan that would keep things basically as they are SOURCE: Kaiser Health Tracking Poll: Election 2008, Volume 3, October 2007.

9. Presidential Candidates Differ in Approach to Health Care Reform • Democrats generally favor: • universal coverage • strengthening the private employer-based system • building on existing public programs • purchasing pools and insurance market reforms • mandates on employers and individuals • financing by rolling back tax breaks for wealthiest Americans • Republicans generally favor: • tax incentives for the purchase of insurance • expanding the individual insurance market • consumer-directed plans such as HSAs • deregulation of the insurance market • limiting the role of public programs

10. …But There Are Areas of Agreement • Importance of health information technology to improve system efficiency and quality • Need for price transparency • Need to improve affordability of health insurance • Need for some assistance for low-income to afford coverage

12. John Edwards • Individual mandate • Require employers to offer or contribute to coverage • Expand Medicaid and SCHIP to all families under 250% FPL and adults under 100% FPL • Create nonprofit regional purchasing pools with private plans and public plan based on Medicare • Refundable sliding-scale tax credits for purchasing coverage through pools • Regulations on insurers to prevent denials of coverage • Estimated cost between $90-120 billion, funded by ending tax cuts for those with annual incomes over $200,000

13. Hillary Clinton • Individual mandate • Require large employers to offer or contribute; tax credits for small employers that offer coverage • Expand Medicaid and SCHIP • Expansion of group insurance options through Health Choices Menu (FEHBP buy-in with public plan option based on Medicare) • Premium subsidies through refundable tax credits, with limit on premiums as a percent of income • Regulations on insurers to prevent insurance discrimination • Reinsurance for catastrophic retiree health costs • Estimated cost is $110 billion per year, funded by health system savings and limiting the tax exclusion for ESI and ending tax cuts for those with incomes over $250,000

14. Barack Obama • Require children to have health coverage • Require employers to offer or contribute a percentage of payroll to coverage • Expand Medicaid and SCHIP • Create a national health insurance exchange with private plans and a public plan with benefits similar to those in FEHBP • Provide income-related subsidies for low-income families • Regulations on insurers to prevent denials of coverage • Estimated cost is $50-65 billion, funded by ending tax cuts for those with incomes over $250,000 and savings to health system

15. Dennis Kucinich Bill Richardson • National, non-profit single payer system • Private coverage allowed for benefits not included in national plan • Regionally allocated global budgets for services, administration, and capital • Funded through increased taxes and transferring existing public spending on health care • Automatic enrollment • No premiums • Phased-in individual mandate • Require employers to offer or contribute to coverage • Expand Medicaid and SCHIP • Allow all to buy-in to FEHBP and those age 55-64 to Medicare • Sliding-scale, refundable federal tax credits for coverage • Increased insurance regulation • Estimated cost is $104-110 billion, funded by savings elsewhere in proposal

16. Rudy Giuliani • Provide tax deduction of $15,000 for purchase of coverage through individual market (echoes Bush proposal) • Deregulate insurance market to encourage lower-priced policies; allow purchase of insurance across state lines • Simplify HSA regulations • Provide refundable tax credits to help the low-income purchase insurance • Provide states with block grants to reduce costs, expand coverage, and address adverse selection issues

17. Mitt Romney • Reform tax code to permit full deductibility of premiums and cost sharing for those with at least catastrophic coverage • Eliminate the minimum deductible requirement for HSAs • Encourage states to deregulate insurance market to provide lower-priced policies • Use state and federal DSH funds to provide subsidies for lower-income families to purchase private coverage • Medicaid block grants with increased state flexibility • Plan will be financed by redirecting existing federal subsidies for uncompensated care

18. John McCain • Remove tax advantage for employer-sponsored insurance • Provide tax credit ($2,500 individual/$5,000 family) to everyone for purchase of private insurance • Require states participating in Medicaid to develop additional premium subsidies for high-cost and low-income individuals • Encourage multi-year insurance products • Allow purchase of insurance across state lines, national health insurance plans (not state-regulated), and association health plans • Encourage state flexibility under Medicaid • Overall emphasis on controlling costs through improved disease management, coordinated care, health information technology, and medical malpractice tort reform

19. Mike Huckabee Fred Thompson • No formal plan announced • Key statement from speech: “I think it is best if you, yourself decide what is best for you and your family, with insurance that doesn’t have to depend on your employment – coverage that you can take with you if you change jobs; insurance that you may purchase from anywhere in the nation for the best value. This would be market driven and would make health insurance affordable for more Americans. • Provide a health insurance tax deduction for individuals and families • Provide a health insurance tax credit for low-income taxpayers • Expand HSAs so they are available to everyone, including those without a high deductible plan • Allow states to experiment with market-based approaches to coverage • Emphasize prevention and disease management; reduce premiums for those who lead healthy lifestyles

20. Assessing Expansion Proposals • Does the proposal seek to achieve universal coverage? • Will coverage under the proposal be comprehensive? • How will the proposal affect businesses? • How will the proposal affect individuals? • How will the proposal be financed? • How will the proposal affect cost and quality of health care? • What is the role for states in the proposal? • What is the role for the federal government?

21. The Future of Health Care Reform • Problems plaguing health care system will not go away • Growing uninsured (47 million) • Declining rates of employer-sponsored coverage • Rising health care costs • States will continue to advance proposals • Trend-setting states will lead the way • Comprehensive reform not possible in all states • SCHIP debate has highlighted ideological divide over health care reform and will influence state action • Health care reform ranks near the top of presidential campaign issues