The Transformation of Insurance Coverage. Charles J. Milligan, JD, MPH Deputy Secretary for Health Care Financing October 16, 2013

Transcription

1 The Transformation of Insurance Coverage Charles J. Milligan, JD, MPH Deputy Secretary for Health Care Financing October 16, 2013

2 Preview 1. Insurance Coverage Patterns in the Last Ten (or so) Years 2. Insurance Coverage Patterns in the Next Seven Years

3 1. Insurance Coverage Patterns in the Last Ten Years

4 Nationally, worker contributions to purchase ESI have grown rapidly, especially at small firms. Average Annual Worker Contributions for Family Coverage, by Firm Size, $4,946 $3,755 * Estimate is statistically different from estimate for the previous year shown (p<.05). Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits,

5 In Maryland, in the past decade, overall family premiums in ESI more than doubled, and the worker s premium contribution grew at an even faster rate. $16,000 $14,000 Average Annual Worker and Employer Contributions to Purchase Family Coverage in Maryland $14,634 $12,000 $10,000 $8,000 $6, % $10,596 $6,000 $4,000 $5, % $2,000 $0 $1,659 $4, / /2011 Employee Contribution Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April % Employer Contribution 5

6 In Maryland, the same pattern existing for individual coverage through ESI, with worker contribution rates more than doubling in a decade. $6,000 Average Annual Worker and Employer Contributions to Purchase Individual Coverage in Maryland $5,000 $4,000 $3,000 $2,000 $1,000 $0 $5, % $2,562 $3, % $2,029 $ % $1, / /2011 Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April Employee Contribution Employer Contribution 6

7 In Maryland, the percent of nonelderly (under age 65) covered through ESI fell from 80% to 68% in the last decade. Percent of Nonelderly (Ages 0-64) with ESI in Maryland 80% 70% 60% % 40% 30% 20% Dependent Policy Holder 10% 0% Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April

8 This fall in coverage through ESI was sharpest among the nonelderly (under 65) in lower income cohorts. Percent of Nonelderly (Ages 0-64) with ESI in Maryland 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Below 200% FPL 200 to 399% FPL 400 FPL Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April

9 Nationally, the same pattern existed: a significant drop in ESI coverage among the nonelderly, especially among the lower income cohorts. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Nonelderly coverage through ESI 39.3% 29.2% 79.0% 70.6% 90.7% 88.0% 69.7% 59.5% Below 200% FPL 200 to 399% FPL 400% and above FPL All Incomes Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April / /2011 9

10 Compared to the nation, ESI coverage in Maryland among the nonelderly fell more sharply below 400% FPL, and less sharply at 400% FPL and above. Nonelderly coverage through ESI 100% -3% -1% -8% -11% -12% 80% -10% 60% 40% -10% -16% 20% 0% -20% US Maryland US Maryland US Maryland US Maryland Below 200% FPL % FPL 400% and Above FPL All Incomes 1999/ /2011 Change Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April

11 Overall among the nonelderly, ESI coverage in Maryland fell more than the national average, but the rate of ESI coverage remains above the national average. 90% 70% 80% 66% 73% 64% 72% 60% 68% 80% 70% 60% 50% 40% 35% 40% 34% 38% 33% 37% 31% 35% 30% 20% 10% 34% 39% 32% 36% 32% 35% 29% 33% 0% US Maryland US Maryland US Maryland US Maryland 1990/ / / /2011 Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April Policyholder Dependent Total 11

12 Change in Employer-Sponsored Insurance, 1999/2000 to 2010/2011 (population under age 65) Among largest drops in country Source: State-Level Trends in Employer-Sponsored Health Insurance, A State-by-State Analysis. SHADAC. April

13 Over roughly the same time period, national enrollment among children in Medicaid and CHIP grew rapidly ( ) Millions of Children Medicaid CHIP SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of HCFA-2082, MSIS, and SEDS data, 2010.

14 National enrollment in Medicaid also grew rapidly in the Recession, adding more than 7 million to Medicaid between June 2007 and June Monthly Enrollment in Millions Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 SOURCE: Analysis for KCMU by Health Management Associates, using compiled state Medicaid enrollment reports

15 Due to all these dynamics, the last decade saw a huge shift from ESI to Medicaid and CHIP among the nonelderly in Maryland Other Private 5% Other Private 5% Uninsured 12% Medicaid 4% Uninsured 15% Employer 78% Other Public* 1% Employer 67% Medicaid 11% Other Public* 2% Any Public Payer: 5% Any Public Payer: 13% *Other Public includes Medicare and military-related coverage. Source: Maryland Health Care Commission. 15

16 In spite of these shifts, in 2011 Maryland continued to have more people covered through private payers than public payers, compared to the national average (all ages). United States Individual 5% Uninsured 16% Maryland Individual Market 5% Uninsured 13% Employer 49% Medicaid 16% Employer 57% Medicaid 12% Medicare 13% Other Public 1% Any Public Payer: 30% Source: Kaiser Family Foundation, State Health Facts. Medicare 12% Other Public 1% Any Public Payer: 25% 16

17 The percent distribution of National Health Expenditures continues to dramatically shift to public payers 68.2% 64.5% Federal State & Local Private Business Household Other Private Revenues 55.1% 44.9% 31.8% 35.5% Government Private 1987 (Total = $519.1 billion) Government Private Government Private 2000 (Total = $1,377.2 billion) 2010 (Total = $2,593.6 billion) Notes: Starting with the 2009 NHE data, CMS expanded their focus on spending by Type of Sponsor, which provides estimates of the individual, business, or tax source that is behind each Source of Funds category and is responsible for financing or sponsoring the payments. Federal and State & Local includes government contributions to private health insurance premiums and to the Medicare Hospital Insurance Trust Fund through payroll taxes, Medicaid program expenditures including buy-in premiums for Medicare, and other state & local government programs. Private Business includes employer contributions to private health insurance, the Medicare Hospital Insurance Trust Fund through payroll taxes, workers compensation insurance, temporary disability insurance, worksite health care. Household includes contributions to health insurance premiums for private health insurance, Medicare Part A or Part B, out-of-pocket costs. Other Private Revenues includes philanthropy, structure & equipment, non-patient revenues. Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group at (see Historical; NHE Web tables, Table 5).

18 2. Insurance Coverage Patterns in the Next Seven Years

19 Between now and 2020, Medicaid will grow with the expansion, Medicare will grow as boomers age into Medicare, and the Exchange enrollment will grow Population Insurance Coverage Status Medicaid Medicare Other Public Commercial Insurance Maryland Exchange Uninsured 1,088,032 1,128,677 1,156,494 1,185,380 1,207,779 1,227,410 1,243, , , , , , ,158 1,023, , , , , , , ,613 3,247,574 3,279,889 3,282,342 3,282,888 3,285,083 3,284,280 3,284, , , , , , , , , , , , , , ,352 Total Population 5,924,320 5,962,013 6,012,841 6,063,669 6,114,498 6,165,326 6,216,155 Source: Maryland Health Care Reform Simulation Model: July The Hilltop Institute. 19

20 By 2020, across all ages, only 51% of the state s population will be covered by ESI, with 38% covered by public payers -- 43% including individuals covered through the public MHBE Exchange 2% Uninsured 10% 2020 Exchange 5% Uninsured 6% Commercial Insurance and Exchange 55% Medicaid 18% Medicare 14% Commercial Insurance 51% Medicaid 19% Medicare 16% Other Public 3% Other Public 3% Source: Maryland Health Care Reform Simulation Model: July The Hilltop Institute. Any Public Payer: 35% Any Public Payer: 38% 20

21 Major Takeaways 1. Medicaid s rapid growth has been driven by many factors: policy expansions; the recession; and the huge erosion in ESI. 2. The payer mix has been shifting from private payers to public payers, which will continue after the ACA implementation occurs and as more boomers enter Medicare.

22 Charles J. Milligan, JD, MPH Deputy Secretary, Health Care Financing