Solely the opinions of Jeffrey Selevan, MD

Transcription

1 Health Care Reform Jeffrey Selevan, MD Disclaimer : The opinions expressed here are the personal views of Jeffrey Selevan, MD and do not necessarily reflect the views and opinions of Kaiser Permanente Patient Protection and Affordable Care Act (PPACA) & Health Care Reform Solely the opinions of Jeffrey Selevan, MD Love it, hate it, it s the law of the land Something had to be done the status quo wasn t sustainable The legislative process was not pretty Parts of the PPACA are universally popular, other parts universally hated Public discourse was distressing (hyperbole, misinformation, political vitriol) 2 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 1

2 Patient Protection and Affordable Care Act (PPACA) & Health Care Reform Solely the opinions of Jeffrey Selevan, MD There is good news and bad news for providers, consumers, taxpayers PPACA flaws will get fixed (eventually) after politically palatable compromises fail As flawed as PPACA is, it s a reasonable starting point (remember Medicare in the 1960 s?) Nothing is Free 3 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. US Population - Health Insurance Coverage 290 million Medicare 22 million Medicaid & CHIP 49 million Uninsured 47 million Individual Policy 11 million Employer Provided 161 million 18% small groups 82% large groups 8% 17% 16% 4% 56% 4 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 2

3 Health Care Reform or Health Insurance Reform? Fee-for-service payment methodologies retained No significant changes in care delivery, but big changes in health insurance policies The cost of health insurance will go up The major portion of these additional costs will be born by employers and taxpayers (bad news if you re an employer or taxpayer) Insurance coverage will be much better good news Insurance coverage will be much more available to individuals and small groups good news 5 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. Health Care Reform Legislation Enacted 3 Major Changes Financing Assured broad participation Expanded health insurance coverage 6 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 3

4 Expanded Health Insurance Coverage for Millions of People Raised the Medi-Cal eligibility to 133% of the federal poverty level Required coverage for dependent children to age 26 starting in 2011 on employer s plans (this is not free ) Guaranteed issuance no denial for pre-existing condition Starting for children 2011, adults 2014 Create health insurance exchanges Assured broad participation Financing Subsidies to income levels of $46,000 for individuals, $94,000 for families to buy health insurance policies in the exchanges Expanded health insurance coverage 7 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. Available Policies through the Exchanges To offer coverage through the exchanges, carriers must have their plans certified by the state as Qualified Health Plans (QHPs). QHPs must: Cover essential health benefits Meet coverage, quality and transparency standards Fit into at least the Silver and Gold tiers of exchange coverage Catastrophic Bronze Silver Gold Platinum Available to those up to age 30 or to those who are exempt from the mandate to purchase coverage Pays for 60% of the costs of the plan Pays for 70% of the costs of the plan Pays for 80% of the costs of the plan Pays for 90% of the costs of the plan 8 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 4

5 Exchange Pricing Deductible and cost share inversely related to the level (and price) of the benefit package purchased Higher premium Less out of pocket expenses Adjusted Community Rating [no more than 3:1 premiums based on Age and Gender], impact on rates for young and old Out of Pocket $ Premium $ 9 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. Assured Broad Participation Guaranteed issuance; no exclusion for pre-existing conditions Assured broad Penalties for individuals and employers who don t buy or provide insurance Small groups are up to 50 employees in 2014, 100 in 2016, and penalties apply for employees working >30 hrs/week Incentives to small business to provide coverage Incentives to large business to provide post-retirement (pre-medicare) coverage National high-risk pool Individual Mandate participation Financing Expanded health insurance coverage 10 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 5

6 ACA Coverage Will be More Comprehensive No lifetime cap on benefits No exclusion of maternity care No cost-share for defined preventative services (but they re not free ) Essential (comprehensive) benefits including some drug coverage Limited rescissions Mental health Additional rights regarding appeals 11 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. How to Finance the Cost of Expanded Care Higher Medicare payroll taxes (2.9% on all income) broad Medicare tax on investment income (2013) for high earners (3.9%) Tax on brand drugs Tax on medical devices Tax on Cadillac plans in 2018 Changes to Medicare Advantage payments to insurers Premium tax on insurance companies Assured participation Financing Expanded health insurance coverage 12 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 6

7 How Insurance Companies Contribute to the Financing of ACA Premium tax on all insurance companies, but no premium tax on self-funded plans Non-profit plans will pay 50% of the premium tax Limits on medical loss ratios (limits on the percentage of premiums that can be used for non-patient care and defined administrative expenses) Insurance companies stand to benefit from a potential gain of 35 million newly eligible purchasers Unintended Consequence: Incent larger employers to move from insurance to self-funded plans 13 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. Quality Provisions in ACA Align with KP Enhanced payment for quality outcomes in the Medicare Advantage Plans KP is the only 5-star rated plan in California Hospital readmission disincentives Emphasis on meaningful use of electronic health records Federal creation of Accountable Care Organizations (ACO) In theory, ACO s should be incented to improve the quality to a population for which they ve accepted responsibility; aligning hospital and physician incentives 14 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 7

8 Risks of ACA Adverse selection Price of coverage will have to go up for the young and come down for the old in order to keep the ratio 3:1 There are 18M year olds who might not buy insurance, and just pay the $95 penalty (2014), exacerbating the problem This will raise rates for all purchasers Small Employers Might not hire employees to work >30 hours/week (because they have to provide insurance, or pay a penalty) Might drop current employer provided coverage for low income employees who qualify for Medicaid or subsidies in the exchanges 15 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. Risks of ACA cont. Large Employers Move from insured to self-funded plans Tax Payers How much will this cost? Health Insurance purchasers Rates are going up; especially for the young 16 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 8

9 Why the Rate Increases? Richer and more comprehensive benefits Adjusted community rating (3:1) Core medical inflation Guaranteed issuance with tepid mandate (at least for the first few years) Adverse selection? Basic Coverage premiums could increase by >40% in some states* *EHealth sample of 30,000 individual plans in 32 states 17 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. The Newly Insured More diverse Lower income Younger, probably healthier Work Unfamiliar with accessing care from a primary physician, nor have established provider relationships Familiar with episodic care venues Very cost sensitive 18 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 9

10 Kaiser Permanente Advantages Aligned financial incentives with hospital, medical group and insurance entities KP HealthConnect Highly efficient delivery system High quality care will yield financial benefits in future years from the quality incentives in ACA Well positioned in the exchanges? We are the original ACO! Growth 19 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. What does this Mean for You? Your services are going to be needed! good news There are going to be more insured patients including KP members good news There will be less revenue per member bad news When the President says that ACA will make the health care system more efficient, he could mean that providers (hospitals and clinicians) will be paid less 20 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 10

11 What does this Mean for You? cont. As taxpayers, you will probably see some impact but it will not be apparent unless you look for it If you purchase insurance, it s going to cost more - especially if you re young As some point Congress is going to have fix the flaws The next presidential election is in 2016 Eventually we will get this right, but maybe only after we ve exhausted all the politically easy options 21 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. Looking Into the Future New Medi-Cal and exchange members are going to be very different than our current members KP will gain a lot more members; but with less revenue per member KP s integrated systems, aligned financial incentives and very high quality will be a strategic advantage in this new world of diminished revenue/member Facility capacity will be a challenge Recruitment and enculturation of the large number of professionals will be a challenge 22 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 11

12 Looking Into the Future cont. The practice of medicine outside of KP in the setting of healthcare reform is likely to be quite different than it has been in the past Increasing emphasis on Ambulatory as opposed to Inpatient care Is Medicare reform coming next? (blending Part A and Part B deductibles?) Telemedicine will become increasingly important; voice, , images, video, mobile, etc. Health care delivery will need to be transformed, much of what we do now hasn t changed in 100 years 23 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. Looking Into the Future cont. Electronic medical records will help this transformation; not a issue for KP but it will be extremely challenging for our professions and industry Demonstrated quality and clinical outcomes will be more valuable in the future Increased role for non-physician professionals Shortcomings in the ACA will get remedied, but it s going to take until the end of the decade Despite the upheaval, it s a great time to be practicing medicine 24 April 17, Kaiser Foundation Health Plan, Inc. For internal use only. 12