Reflection on Federal Health Reform MN Economics Association, October 27, 2017

Transcription

1 Reflection on Federal Health Reform MN Economics Association, October 27, 2017 Stefan Gildemeister Director, Health Economics Program October 2, 2017

2 Overview MN health care market pre-aca The ACA: A technocrats dream a policy nightmare Needed refinements 2

3 MN Health Care Market pre-aca /1 Stable individual insurance market (around 250k) 25% Premium Increases in MN s Indiv Market Market for healthy people (health underwriting) Contraction of actuarial value Increasing deductibles Decreasing OOP limits More tiers for Rx benefits Lifetime limits Source: MDH Health Economics Program; Health Plan Financial and Statistical Report and National Association for Insurance Commissioners (2016 only). Based on total per-member-per-month premiums collected. Summary of Graph 20% 15% 10% 5% 0% -5% 3

4 2017 Annual Premium $9,458 $5,928 MN Health Care Market pre-aca /2 $16,000 $12,000 Estimated Payments Made by Individuals and Sponsors of Coverage 40-Year-Old in Morris, MN (2017) MN operated a large, reasonable effective high-risk pools for some Expensive to individuals and the system $8,000 $4,000 $0 $1,407 $4,546 Employer Sponsored Coverage $5,583 $0 Individual/ no subsidy ($51,000 income) Sponsor $2,490 $3,094 Individual/ subsidy ($42,000 income) Individual $5,928 $9,458 Individual/ subsidy ($30,000 Income) High Risk Pool Coverage Not everyone who had a pre-existing condition was able to obtain coverage Incentives to manage care and quality were limited Source: MDH/Health Economics analysis of data from the Medical Expenditure Panel Survey Insurance Component, rate filing data in the individual market (Stevens County, Rating Area 6) and average projected MCHA premium data. Subsidies are income-based Advanced Premium Tax Credits, available through MNsure; High Risk Pool is based on Minnesota Comprehensive Health Association Costs 4

5 MN Health Care Market pre-aca /3 10% Uninsurance Rate In 2013, about 450,000 Minnesotans lacked health insurance 9% 8% 7% 8.2% Disparities by income, age, rate & ethnicity 6% 5% 4% 3% 2% 1% 0% % Health care costs a significant barrier to health insurance and care Sources: MDH Health Economics Program. Uninsurance rate estimates based on the 2004, 2007, 2009, 2011, 2013, and 2015 Minnesota Health Access Surveys. Summary of graph 5

6 MN Health Care Market pre-aca /4 40% Uninsured Insured 39.0%* Costs act as barriers to accessing health care services 30% 20% 10% 0% 16.4%* 5.7% Not filled a prescription 24.1%* 11.6% Not received dental care 17.4%* 4.1% Not gotten routine medical care 9.9%* 2.4% Not gotten mental health care 14.0%* 4.0% Not seen a specialist 17.2% Had some type of delayed care Affects access to critical services, including dental, Rx, mental health and routine care True for people with insurance (39.0%) and for the uninsured (17.2%) *Indicates statistically significant difference between insured & uninsured Source: 2015 Minnesota Health Access Survey 6

7 Billions of Dollars Percent growth from previous year MN Health Care Market pre-aca /6 Health care spending growth every year Gap between growth in health care costs and economic variables (income, wages, inflation) widens Little growth in investments for non-clinical services even though those factors drive health Public/population health Social supports Source: MDH, Health Economics Program. $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 12.9% $ % 10.2% 9.9% $23.9 $ % 7.0% $ % Level of spending (in billions) $43.4 $39.5 $37.5 $ % 6.4% 4.7% 4.0% 3.7% 3.4% 1.6% 1.7% Total growth from previous year 7 14% 12% 10% 8% 6% 4% 2% 0%

8 MN Health Care Market pre-aca /5 No direct relationship between cost and quality Thirty percent of our annual spending is estimated to be wasted There are health delivery system failures that lead to: Overuse Underuse and Inefficient delivery of care Fraud and abuse Pricing failures Administrative complexity Overtreatment Failures of care coordination Distribution of Components (adds to 100%) Failures of care delivery 0% 5% 10% 15% 20% 25% 30% Source: Berwick DM, Hackbarth AD. "Eliminating Waste in US Health Care." JAMA. 2012; 307(14): Based on midpoint of United States health care spending source estimates from 2011 (34 percent of all spending). 8

9 Federal Health Reform: A Technocrat s Dream / A Policy Nightmare Affordability (Essential) Benefits Financing Stability No direct relationship between cost and quality Thirty percent of our annual spending is estimated to be wasted Access/ Networks Coverage Underlying Costs There are health delivery system failures that lead to: Choice/ Standards Incentives/ Mandate Subsidy Overuse Underuse and Inefficient delivery of care 9

10 Needed Refinements Adequately finance risk in markets to create affordable coverage (reinsurance connected to risk adjustment, subsidies, incentives, mandates) Foster insurance & provider competition (including through public option) Strengthen transparency at all levels Make substantial investments in public & population health Manage growth in underlying health care costs (e.g., market & payment reform) Develop social glue to support cross-subsidies that characterize functioning of risk pools Create certainty for market participants and consumers 10

11 Thank you! Stefan Gildemeister HEP Home Page: MN Health Care Market Slides: MN APCD Home Page: www/health.state.mn.us/healthreform/allpayer 11