How to return control of our health care system back to patients. A health care reform strategy for state and national policy makers

Transcription

1 How to return control of our health care system back to patients A health care reform strategy for state and national policy makers 1

2 Developed by the Joint Economic Committee minority, led by U.S Senator Sam Brownback of Kansas and Rep. Kevin Brady of Texas

3 Options Deal with it (aka Law of the Land ) Repeal Repeal and Replace Exploit then Repeal 3

4 Why exploit then repeal? Unlikely to override presidential veto Jumpstart a free market healthcare system Avoid uncertainty for patients, doctors, and employers Highlight true intentions of new federal organizations and hasten the demise of Obamacare lower costs, improve quality and coverage, and also protect consumer choice - President Obama, June

5 Key Sections of Obamacare 1301: Qualified Health Plans 1302: Minimum Essential Benefits 1311: State Health Exchanges 1321: Federal Health Exchanges 1401: Premium Assistance 2001: Medicaid Expansion 10104: Qualified Health Plan Amendents Exploitable Direct Primary Care Medical Home Plans (Amended Section 1301) The Secretary of Health and Human Services shall permit a qualified health plan to provide coverage through a qualified direct primary care medical home plan that meets criteria established by the Secretary, so long as the qualified health plan meets all requirements that are otherwise applicable and the services covered by the medical home plan are coordinated with the entity offering the qualified health plan 4/13/15 5

6 Why is healthcare so expensive? SOURCE: High Cost Impact of More Regulations and Staff on Health Care Inflation, Frank Hill, FamilySecurityMatters.org, July 27,

7 Why do we need so many administrators? The so-called Affordable Care Act The Patient-Centered Care Solution Patient Doctor Lower Costs Improved Quality and Coverage Protected Consumer Choice 7

8 What is Patient-Centered Care Solution? Core Optional Direct Primary Care Services High Deductible Health Insurance Free Market Exchanges Government Assistance Portal Tax Exempt Accounts Low Income Trust Fund Qualified Health Plan No Waivers Waivers 8

9 Direct Primary Care Services (DPCS) Separates routine from catastrophic care No insurance cards Monthly retainer for primary care services Not fee for service Total price transparency Lower administrative burden Decreases profitability threshold from 3,000 patients to 600 patients Effectively increases primary care physician supply More time with patients Lower hospitalization rates Higher quality of care Lower costs 4/13/15 9

10 A look at the numbers in MI Patient- Centered Care Solution Medicaid Government Employees Private Employers A Qualified Health Plan consists of DPCS plus HDHP DPCS costs $75/person/month HDHP costs as little as $96/person/month Annual costs for single adults as low as $2052/person/yr 1.8M Medicaid enrollees Additional 450,000 enrolled under Medicaid Expansion Costs taxpayers over $12B/yr 40% state/60% fed $5000/person/yr for single adults DPCS- based plans offer 59% savings Over $1.5B/yr on healthcare insurance for state employees Billions more spent on local government employees DPCS- based plans offer 20-30% savings Over $31B/yr spent on healthcare Healthcare costs drive employer cost competitiveness 5.7M employees insured by employer Average healthcare cost in MI $5385/person/yr DPCS- based plans offer 20-30% savings Potential Savings: >$7B/year Potential Savings: >$300M/year Potential Savings: >$6B/year WITH BETTER CARE! WITH BETTER CARE! WITH BETTER CARE! 4/13/15 10

11 It is already working Direct Primary Care Services High- Deductible Health Plans via Private Health Exchanges State of Washington Qliance pilot of 1,000 Medicaid enrollees resulted in cost savings of >50% and decrease in hospitalization of >50%. Later expanded to 50,000 enrollees. BETTER CARE FOR LESS MONEY 4/13/15 11

12 Key Success Factors Demand (Enrollees) Supply (DPCS Providers) De- Scoped Insurance (No Primary Care) Private Exchanges* Private Employers Medicaid Enrollees Medicare Enrollees State Government Local Government Private Practices Independent Direct Care Networks Hospital- Based Direct Care Networks Insurance Companies Self- Insured Online Marketplaces Insurance Companies *Certify collection of services and insurance policies as Qualified Health Plans 12

13 State Strategies Initiative Demand Supply De- Scoped Insurance Private Exchanges Define DPCS as non- insurance product No impact Minimizes risk of DPCS business model for physicians Creates market for DPCS- aligned HDHP No impact Convert government employees to PCCS Expands demand for DPCS Encourages growth in DPCS provider network Encourages growth in DPCS- aligned HDHP market Encourages growth of private exchanges Convert Medicaid enrollees to PCCS Expands demand for DPCS Encourages growth in DPCS provider network Encourages growth in DPCS- aligned HDHP market Encourages growth of private exchanges Develop Government Assistance Portal No impact No impact No impact Levels playing field between government and private exchanges Implement Low Income Trust Fund Expands access to care No impact Expands market for HDHP enrollees No impact 13

14 Federal Strategies Initiative Demand Supply De- Scoped Insurance Promulgate rules to explicitly allow direct primary care arrangements under section of ACA Expands demand for DPCS Encourages growth in DPCS provider network Encourages growth in DPCS- aligned HDHP market Private Exchanges Encourages growth of private exchanges Allow DPCS payments via tax- deferred or exempt accounts Expands demand for DPCS No impact No impact Encourages growth of private exchanges Promulgate rules to allow Medicaid patients to pay doctors directly Expands demand for DPCS Encourages growth in DPCS provider network No impact No impact Promulgate rules to allow Medicare patients to pay doctors directly Expands demand for DPCS Encourages growth in DPCS provider network No impact No impact 14

15 Judicial Strategy Did your state reject the state-based exchange? Halbig/King vs Burwell Subsidies in Section 1410 only reference Section 1311 (State Exchanges) not Section 1321 (Federal and Partnership Exchanges) Without subsidies, ALL enrollees will be subject to market rates If premiums exceed 8% of household income, mandate does not apply No mandate, no IRS penalties No IRS penalties, no enforcement 15

16 Options Deal with it (aka Law of the Land ) Repeal Repeal and Replace Exploit then Repeal 16

17 Sample Legislation MI SB 459 (2013): Regulatory infrastructure to enable free market healthcare system MI SB 460 (2013): Conversion of Medicaid enrollees to DPCS plus HDHP plans MI SB 1033 (2014): Treatment of DPCS as noninsurance product MI SCR 23 (2014): Appeal to federal government for specific changes to enable growth of DPCS market Legislation can be found at legislature.mi.gov 17

18 References See Solution Center at MorninginMichigan.com AtlasMD.com EpiphanyHealth.net forthrighthealth.com/ Direct Primary Care: An Alternative to Conventional Health Insurance, Daniel McCorry (Heritage.org) How Medicaid Hurts the Poor, Avik Roy AAFP.org Docs4PatientCare.org DPCare.org The Marcus Welby/Steve Jobs Solution to the Medicaiddriven State & County Budget Crisis, David Chase, 18

19 Contact Information Phone: (517) Patrick Colbeck 19

20 BACKUP 20

21 Beyond Primary Care. 4/13/15 21

22 How Patient-Centered Care Solution works 8 Enrollee Profile Private Exchange Private Exchange 5 7 Tax Exempt Account Govt Assistance 6 3 Health Plan 1 Qualified Health Plan 2 Qualified Health Plan 3 Minimum Essential Benefits Direct Primary Care Service High Deductible Insurance Plan 2 Private Exchanges Primary Primary Care Primary Care Service Primary Care Direct Service Care Service Primary Care Service Service High Deductible Insurance Plan Low Deductible Insurance Plan Healthcare Marketplace 1- Catolog healthcare products and services 2- Combine products and services into QHP s Promote suite of health plans Low Income Government Assistance Insurance Regulator 4- Validate QHP s meet min essential benefits Trust Fund Portal 5- Check to see if enrollee eligible for assistance 6- Subsidize plans if eligible for assistance Federal HHS 7- Deposit funds in tax exempt account 8- Withdraw funds from account to pay for products and services 9- Supplement accounts if deductibles invoked 4/13/

23 Sections 1301 & 1302 on Minimum Coverage Section 2001 Medicaid Expansion Section 1311 Government Health Exchanges SOURCE: American Thinker, 2/27/12

24 Nationwide Exchange Status SOURCE: The Commonwealth Fund ( Sept 27, 2014

25 Exchange Application Blueprint Exchange Activity FreeMarket Compliance Issues Legal Authority and Governance Red Requires state to authorize private exchanges Requires boards compliant with ACA Consumer and Stakeholder Engagement and Support Yellow Requires Navigator program Eligibility and Enrollment Red HHS approval required for individual market and SHOP applications Requires periodic data pulls by Feds Requires government assistance eligibility data interface Feds determine what is a Qualified Health Plan Transition plan for high risk pools Plan Management Green Risk Adjustment and Reinsurance Green* State has the authority to perform adjustments but is not required to do so Small Business Health Options Program Organization and Human Resources Finance and Accounting Technology Privacy and Security Yellow Green Green Green Green Requires compliance with HHS regulations Restricts plan change timing Oversight and Monitoring Yellow Policies and procedures must promote ACA compliance Contracting, Outsourcing, and Agreements State Partnership Exchange Activities Green Yellow Requires capability to interface with Federal exchange (sets up fed takeover)

26 Nationwide Medicaid Expansion Status SOURCE: The Commonwealth Fund ( Sept 27, 2014

27 Michigan Status Exchanges Medicaid Expansion Patient- Centered Solution SB 693 State- Based Exchange HB 4714 (H- 3) Reform and expand SB 459 and 460 Pre- Medicaid Expansion HB 5114 Federal IT Interface HB 4714 (S- 1) Really reform and expand SB 688 and 689 Post- Medicaid Expansion SB 233 State- Partnership Exchange SB 422 State- controlled expansion SB 1033 DPCS is not insurance HB 4111 State- Partnership Exchange SB 993 Health Care Compact SCR 23 Federal requests 4/13/15 27

28 Current Medicaid Eligibility in Michigan 4/13/15 28

29 Medicaid vs Private Insurance in the ER Medicaid Recipients 3X More Likely to Use ED 4/13/15 29

30 Healthy Indiana Plan The initial HIP demonstration project was approved in December 2007, and the program began January 1, Through the current demonstration year, HIP covers caretaker and non-caretaker adults up to 200% of the federal poverty level (FPL). Five years later, HIP has demonstrated significant success in achieving its goals and remains the sole Medicaid demonstration project modeled on the principals of consumer-driven health plans. Ability to pay 80% <100% FPL would pay $10/month 100% % FPL would pay $10/month $20-$30/month accepted before drop off in acceptance Preventative Care ($500 Free ) Power Account ($1,100 from State controlled by participant) Insurance Coverage ($300,000/yr, $1MIL lifetime) 4/13/15 30

31 Obamacare objectives This week, I conveyed to Congress my belief that any health care reform must be built around fundamental reforms that lower costs, improve quality and coverage, and also protect consumer choice. That means if you like the plan you have, you can keep it. If you like the doctor you have, you can keep your doctor, too. The only change you ll see are falling costs as our reforms take hold. - Remarks of President Barack Obama, Weekly Address, Saturday, June 6, 2009

32 How to lower costs Take money from one person to subsidize the cost for another person (i.e. socialism) Pay for someone to tell you what kind of care you can receive (i.e. "managed" care) Get rid of the one telling you what kind of care you can receive (i.e. Direct Primary Care) 32

33 How to improve quality Add 159 new federal organizations between a doctor and patient to manage care Add state controls and regulations between a doctor and patient to manage care Re- focus on the practice of medicine and remove federal and state controls attempting to micromanage the doctor- patient relationship 33

34 How to protect consumer choice Promote single payer healthcare system Promote multiple private plans available on government- run exchanges Promote multiple private plans on multiple private exchanges 34

35 PPACA Authorized Qualified Health Plan Options Standard (Section 1301) Provides essential benefits (Section 1302) Offered by state- licensed insurer Complies with certification criteria (Section 1311) Complies with regulations developed under Section 1311 (Health Exchange Blueprint) CO- OP Program (Section 1322) Fosters creation of qualified nonprofit health insurance issuers to offer qualified health plans in the individual and small group markets Section Multi- State Qualified Health Plan (Section New) Direct Primary Care Medical Home Plans (Amended Section 1301) Requires the OPM to contract with health insurers to offer at least two multi- state qualified health plans (at least one non- profit) through Exchanges in each State. Requires multi- state plans to cover essential health benefits and meet all of the requirements of a qualified health plan; States may require multi- state plans to offer additional benefits, but must pay for the additional cost. The Secretary of Health and Human Services shall permit a qualified health plan to provide coverage through a qualified direct primary care medical home plan that meets criteria established by the Secretary, so long as the qualified health plan meets all requirements that are otherwise applicable and the services covered by the medical home plan are coordinated with the entity offering the qualified health plan 35