Federal Insurance Issues & Election 2008

Transcription

1 Federal Insurance Issues & Election 2008 Heather E. Jerbi Senior Federal Health Policy Analyst American Academy of Actuaries Southeastern Actuaries Conference November 20, 2008 Atlanta, GA

2 Overview Election 2008 Results Health Care Reform General Insurance Reform 2

3 Election 2008 US House of Representatives 2009 US House of Representatives Democrats Republicans 255 Undecided Democrats Republicans US Senate 2009 US Senate Democrats Republicans Undecided Democrats Republicans Several races are still being contested/recounted. Updated as of 11/11/08 3

4 2009 Agenda Economy Economy Iraq Economy Health care reform 4

5 Health Care Reform

6 Health care reform Uninsured 45 million uninsured (under age 65) Rising health care costs In 2008, national health expenditures are projected to be 16.6% of GDP By 2017, projected to be 19.5% of GDP Sources: Kaiser Family Foundation. The Uninsured: A Primer, October 2008; Centers for Medicare and Medicaid Services, Office of the Actuary 6

7 Approaches to expand coverage Focus on the private insurance market Tax incentives to purchase private insurance Individual market reform (including AHPs, insurance purchase across state lines) Expand Health Savings Accounts (HSAs) Encourage state-based efforts Block grants to states Allow redirection of federal and state resources to help lowincome uninsured purchase private coverage 7

8 Approaches to expand coverage (cont.) Combined public/private approach Enhance purchasing opportunities Create regional purchasing pools (with market reforms) Allow individuals to purchase FEHBP plan Create FEHBP-type national plan Government-sponsored reinsurance Expand Medicaid/SCHIP eligibility Individual mandate and/or employer mandate 8

9 President-elect elect Obama s s plan New national health insurance exchange Individuals can enroll in a new public plan or an approved private plan Plans will be required to have benefits at least as generous as the new public plan Minimum standard benefit package would be similar to that offered through FEHBP Exchange would offer portability Issue/rating rule limitations Guaranteed issue Modified community rating (not based on health status) 9

10 President-elect elect Obama s s plan Low-income premium assistance Tax credits for individuals/families Premium subsidies for small business Refundable tax credit for small businesses of up to 50% on premiums paid by small businesses on behalf of their employee To be eligible, must offer quality health plan and cover a meaningful share of cost of employee premiums Expansion of Medicaid/S-CHIP 10

11 President-elect elect Obama s s plan Employer mandate Large employers must provide and contribute to coverage for employees OR Contribute a portion of payroll to the new national plan Child mandate Requires all children to have health care coverage Allows those up to age 25 to continue coverage through parents plans 11

12 Congressional proposals Healthy Americans Act (Wyden/Bennett) Replaces employer group insurance system and Medicaid with a mandatory individual system through state-run entities Universal Health Care Choice and Access Act (Coburn) Replaces tax exclusion for employer coverage with a tax credit to individuals Small Business Health Options Program (Durbin/Snowe/Lincoln/Coleman) Creates statewide small business health insurance market (nationwide plans also available) Ten Steps to Transform Health Care in America (Enzi) Replaces tax exclusion for employer coverage with a new health care standard deduction; income-based subsidies 12

13 Academy activities/publications Election 2008 website: Benefit coverage Fundamentals of insurance and implications for coverage Risk pools Wading through risk pools issue brief Hill briefing on risk pools (May 2008) Individual market How the individual market works Mandates Forthcoming issue brief on mandates 13

14 Rising health care costs National Health Expenditures as a % of GDP 19.5% in 2017 Total NHE=$4.3 trillion (projected) % in 1992 Total NHE=$849 billion 16.6% in 2008 Total NHE=$2.4 trillion (projected) 5 5.9% in 1966 Total NHE=$46 billion Source: Centers for Medicare and Medicaid Services, Office of the Actuary 14

15 Quality concerns Between 44,000 and 98,000 Americans die from medical errors annually (IOM, 2000) Gaps in health system performance cost $ billion annually American adults receive only 54% of recommended care little difference between preventive care, acute care and chronic care Care received can vary dramatically across the country; patients in high-spending regions receive more care but not better outcomes 15

16 Obama s s quality/cost proposals Encourage disease management programs Require plans that participate in exchange, Medicare or FEHBP to utilize DM programs Care management programs Encourage medical home-type models to improve care coordination Align reimbursement with quality/effectiveness of care Establish institute to guide reviews and research on comparative effectiveness Encourage evidence-based medicine 16

17 Other quality/cost proposals Invest in health information technology (e.g., electronic medical records) Promote prevention and chronic care management Restructure provider payment systems to include payfor-performance initiatives Encourage more comparative effectiveness research/development of evidence-based medicine guidelines 17

18 Academy activities/publications Health care costs Drivers of health care spending growth issue brief Hill briefing on rising health care costs (Sept 2008) Quality Comparative effectiveness research 18

19 Other health care issues Medicare SGR Medicare Advantage Long-term care insurance Tax incentives Medicaid expansion Public/private partnerships 19

20 Academy activities/publications Medicare Election 2008 website piece on Medicare Medicare reform options monograph Analysis of 2008 Medicare trustees report Potential public interest statement on Medicare 20

21 Other health care issues (passed) Mental health parity Passed on Oct 3 as part of Economic Stabilization Act Prohibits plans from establishing financial and treatment requirements for mental health/substance abuse that are more restrictive than those available for medical/surgical Genetic nondiscrimination Became law on May 21 Prohibits discrimination in health coverage based on genetic information IRS, EBSA, CMS solicited comments on GINA by Dec 9 21

22 Conclusions/Outlook for 2009 It Depends Health care reform will get some traction next year Sen. Kennedy has indicated that HELP is drafting legislation that will follow President-Elect Obama s blueprint Individual states are still experimenting with coverage expansions 22

23 General Insurance Reform

24 Financial crisis overview Economic crisis 2008: series of high-profile bank and insurance company failures, resulting in part from real estate/subprime lending October 3 President Bush signed Emergency Economic Stabilization Act of 2008 (HR 1424) Authorized $700b to buy failing financial assets (e.g., mortgage-backed securities) Included $150b in tax breaks to individuals and businesses Legislation directs Dept. of Treasury to initiate a program to insure mortgage-backed securities. Financial services firms would pay a fee to government for insuring their assets 24

25 Optional Federal Charter Proposal to streamline US insurance regulation by allowing insurance companies to choose between a state-based regulatory system (current) and a single federal regulatory agency Federally chartered insurance would include homeowners, life and auto, but not health insurance Legislation introduced to create OFC HR 3200/S 40 National Insurance Act of

26 Office of Insurance Information On April 17, Rep. Kanjorski (D-PA) introduced the Insurance Information Act of 2008 (HR 5840) Bill would create a federal Office of Insurance Information within the Treasury department on issues relating to all lines of insurance except health Gives Dep. Asst. Secretary (Treasury) authority to create federal policy on international insurance issues and ensure state laws are consistent with federal law Does not allow the OII to have supervisory or regulatory authority over any insurer except to extent carrying out provisions in legislation 26

27 Flood Insurance Flood insurance NFIP expires in March 2009 Reauthorization or extension of sunset Program currently in $20b debt HR 3121: raises coverage limits, add coverage for business interruption, forgives debt and adds wind insurance 27