Universal Healthcare Universal Healthcare In 2004, health care spending in the United States reached $1.9 trillion, and is projected to reach $2.9 trillion in 2009 The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $10,800 in 2005. Workers contributed $2,713, or 10 percent more than they did in 2004 (3).The annual premiums for family coverage eclipsed the gross earnings for a full-time, minimum-wage worker ($10,712). Universal Healthcare Health insurance expenses are the fastest growing cost component for employers. The average employee contribution to companyprovided health insurance has increased more than 143 percent since 2000. Average out-ofpocket costs for deductibles, co-payments for medications, and co-insurance for physician and hospital visits rose 115 percent during the same period Universal Healthcare # A recent study by Harvard University researchers found that the average out-ofpocket medical debt for those who filed for bankruptcy was $12,000. The study noted that 68 percent of those who filed for bankruptcy had health insurance. In addition, the study found that 50 percent of all bankruptcy filings were partly the result of medical expenses (12). Every 30 seconds in the United States someone files for bankruptcy in the aftermath of a serious health problem. % GDP for Health Care Expenses 16.0% 15.2% 14.0% 12.0% 11.0% 10.1% 9.9% 10.0% 8.0% 8.0% 7.9% 7.3% 6.0% 4.0% 2.0% 0.0% United States France Canada Germany United Kingdom Cuba $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Health Care Expenses Per Capita $5,711 $2,902$2,989 $3,001 $2,389 $2,244 $251 United States France Canada Germany United Kingdom Cuba 1
Universal Healthcare Universal healthcare is a system in which all residents of a geographic or political entity have their healthcare paid for, regardless of medical condition or financial status. -Wikipedia (2006). United States Statistics Infant Mortality Correlates very strongly with and is the one of the best predictors of state failure Indicator of country s level of health or development Rank 42 nd in the world (CIA Factbook 2006) Countries such as, South Korea, Cuba, Ireland, Italy, Jersey, rank higher than the US 6.43/1,000 (deaths/1,000 live births) Infant Mortality Rate 7 6.43 6 5.08 5 4.69 4.21 4.12 4 3.24 3 2 1 0 United States France Canada Germany United Kingdom 6.22 Cuba Life Expectancy 90 86 85 83 83 82 80 81 78 79 80 80 75 76 76 76 75 75 70 65 60 55 50 United States France Canada Germany United Kingdom Cuba Male Female Who has healthcare? 46.6 million Americans without health insurance (US Census Bureau, 2005) 2
United States Healthcare Public Health Insurance Medicare Basics: A federal program that covers individuals aged 65 and over, as well as some disabled individuals. Administration: A single-payer program administered by the government; performing the insurance function of reimbursement. Financing: Financed by federal income taxes, a payroll tax shared by employers and employees, and individual enrollee premiums (for parts B and D). Benefits: Medicare Part A covers hospital services, Medicare Part B covers physician services, and Medicare Part D offers a prescription drug benefit. [Medicare Part C refers to Medicare Advantage HMO s that administer Medicare benefits]. United States Healthcare There are many gaps in Medicare coverage, including incomplete coverage for skilled nursing facilities, incomplete preventive care coverage, and no coverage for dental, hearing, or vision care. Because of this, the vast majority of enrollees obtain supplemental insurance. Overall, seniors pay about 22% of their income for health care costs despite their Medicare coverage. Public Health Insurance Medicaid A program designed for the low-income and disabled. By federal law, states must cover very poor pregnant women, children, elderly, disabled, and parents. States have the option of expanding eligibility if they so choose. For example, states can choose to increase income eligibility levels. Administration: The states and the District of Columbia are responsible for administering the Medicaid program; as such, there are effectively fifty-one different Medicaid programs in the country. Medicaid Cont. Financing: Medicaid is financed jointly by the states and federal government through taxes. Every dollar that a state spends on Medicaid is matched by the federal government at least 100%. Nationwide, the federal government pays for 57% of Medicaid costs. Benefits: Medicaid offers a comprehensive set of benefits, including prescription drugs. Despite this, many enrollees have difficulty finding providers that accept Medicaid due to its low reimbursement rate. Public Health Insurance Other public systems S-CHIP: The State Children s Health Insurance Program covers children whose families make too much money to qualify for Medicaid but make too little to purchase private health insurance. VA: Federally administered program for veterans of the military. Health care is delivered in governmentowned VA hospitals and clinics. Funded by taxpayer dollars and offers extremely affordable or free care to veterans. United States Healthcare Private Health Insurance Employer-sponsored insurance Basics: Employer-sponsored insurance represents the main way in which Americans receive health insurance. Administration: Insurance plans are administered by private companies, both for-profit and non-for-profit. Financing: Employer-sponsored insurance is financed both through employers and employees. In 2005, the annual private employer-sponsored insurance premiums averaged $4,024 for single coverage and $10,880 for a family of four. 3
Private Health Insurance Cont. Benefits: Benefits vary widely with the specific health insurance plan. Some plans cover prescription drugs, while others do not. The degree of cost-sharing varies considerably. United States Health Insurance Private non-group Basics: The individual market covers part of the population that is self-employed or retired. In addition, it covers some people who are unable to obtain insurance through their employer. Administration: Plans are administered by private insurance companies. Private Non-Group Cont. Financing: Individuals pay an insurance premium for coverage. Risk in the individual market depends only on the health status of the individual, in contrast to the group market, in which risk is spread out among multiple individuals. As such, low-risk, healthy patients will have a low premium, whereas the opposite is true for high-risk, sick patients. The individual market also allows health insurance companies to deny people coverage based on preexisting conditions. Benefits: Benefits vary widely with the specific health Untied States Healthcare FINANCING OF THE U.S. HEALTH CARE SYSTEM The financing of health care centers around two streams of money: the collection of money for health care (money going in), and the reimbursement of health service providers for health care (money going out). Private insurance companies and the government share these two functions. Financing Healthcare Individuals and businesses Taxes: Both individuals and businesses pay income taxes to the government. In addition, there is a payroll tax on employers and employees to finance Medicare. Premiums: Businesses pay all or most of the premium for employer-based insurance for employees, and employees pay the remainder. On the individual market, individuals pay for all premiums out of pocket. Direct or out-pocket payments: This is a direct payment to a provider for health care services Financing Healthcare Cont. Government Medicare, Medicaid, S-CHIP, and the VA: The government uses money generated from taxes to reimburse providers who take care of patients enrolled in these programs. Public employees premiums: The government also uses tax dollars to pay private insurers a health insurance premium for federal employees and other public employees. Tax subsidy: There is a tax subsidy of employerbased insurance. Employers are able to deduct the cost of health insurance premiums as a cost. This eliminates approximately $100 billion in taxes each year 4
Financing Healthcare Cont. Private insurers Private insurers accept premiums from individuals, businesses, and the government. In turn, they reimburse providers for taking care of patients with private insurance. Health service providers Providers take care of individuals and are reimbursed for their services by private insurance companies and the government. What are others doing? Socialized Who: Britain, U.S. Veterans Administration How it works: Government hires doctors and runs the hospitals and clinics Who Pays: Government Who Picks the Doctor: Patient Who is covered: Everyone W.H.O. Rank: Britain - 24 What are others doing cont? Single-Payer Who: Canada How it works: Doctors have private practices, hospitals may be owned by nonprofits or by government. Government pays the bills based on fee structures negotiated with health care providers. Who Pays: Government Who picks the doctor: Patient Who is covered: Everyone W.H.O. Rank: Canada 35 What are others doing cont? Nonprofit Multi-layer Who: France How it works: Medical practices and hospitals are private (nonprofit or for-profit). Nonprofit, regulated "sickness" funds collect payments and pay health care bills under the terms of a negotiated fee structure. Who Pays: Payroll contributions (compulsory) from employers and employees. Funds cover 75% of medical bills. Remainder comes from government, patients, and supplemental insurance. Who picks the doctor: Patient Who is covered: 99% of population W.H.O. Rank: France 4 What are we doing? Who: United States How it works: Individuals or employers purchase coverage from mostly for-profit insurance companies. The elderly, disabled, veterans, some children, some low income people are covered through public programs. Who Pays: Employers and individuals pay premiums. Most plans require co-pays and deductibles, and some costs are excluded. Government subsidizes employer plans through tax breaks and covers some families through publicly funded programs. Who Chooses Doctor: Choice restricted by insurer; penalties may apply for seeing "out-of-network" provider. Some providers don't take Medicaid or Medicare. What are we doing cont? Who is covered: Those with insurance, those covered by the Veterans Administration (which works like socialized medicine), Medicaid, and Medicare (which function like single-payer systems). Those with chronic illness or preexisting conditions may not be able to find coverage at any price. About 50 million have no insurance, including nine million children. W.H.O. Rank: United States 72 5
Examples of Countries with Universal Healthcare Argentina, Australia, Canada, Denmark, Greece, Ireland, Israel, Italy,, New Zealand, Portugal, Russia, Saudi Arabia, South Korea, Sri Lanka, United Kingdom Mexico, South Africa & Thailand currently in the process of implementing National Health Insurance in People have different plan depend on their work styles Percentage of population covered by each insurance style Plan Health Insurance Sailors' Insurance Mutual Benefit Society National Health Insurance Insured People who work at appointed General offices or companies Part time workers and other general Other workers who are not fit in other work related insurances People who are employed by ship owners as sailors Public officials and People who work at private schools People who are not categorized to any of above 40% 8% 24% 28% Health Insurance (General) 31million Health Insurance (Other) 36million Sailors' Insurance/Mutua l benefit Society 10million National Health Insurance 50million 6
A family of 2 parents and 2 children living in city A. Husband s income is $20,000 and the tax for assets is $500. Income Ration Assets Ration Per Capita Sum Prorated Sum 9.60% 9.30% $28.31 $21.94 Income Ration:($20,000-$3300)x0.096= $1603.20 Assets Ration: $500x0.093 = $ 46.50 Per Capita Sum: $28.31x4 = $1132.40 Prorated Sum $ 21.94 Health Insurance Premium for this year $ 3001.50 Employment Related Insurance High Medical Expenses Employer and employee are responsible to pay for insurance premium together Toyota Employee 19.5/1000 Employer 42.5/1000 Insurance Premium of employees whose monthly income is $1650(Anuall: about $20,000) is $31.20/month: $374.40/year. Monthly income: $5600 or more Monthly income: less than $5600 People whose taxes are exempted because their incomes are low First 3 months $1505 + (Medical Expense Charged - $5000) x 0.01 $801 + (Medical Expense Charged - $2670) x 0.01 $354 4th month and after $834 $444 $246 Example 1 Example 2 Satomi was hospitalized. It cost $5,000 and she paid $1,500 at the window. This was first time for her to go to a hospital this year. Her co-pay is $801+ ($5,000 - $2,670) x 0.01 = $824.30 So, she will get refund of $1,500 - $824.30 = $675.70 Satoko went to hospital. She paid $230 at the window. Her husband Kenji also went to hospital. He paid $180 at the window. He also paid $35 for the medicine. This was first month to go to hospitals for them and they receive tax exemption. They will get refund of ($230 + $180 + $35) - $354 = $91 7
Infant Mortality Rate in Infant Death Infant mortality rate Life Expectancy 14,000 9 12,000 8 7 10,000 6 8,000 5 6,000 4 4,000 3 2 2,000 1 0 0 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Should the Government provide universal health care for all American? No! It will reduce the quality of treatment. Higher taxes and spending cuts in other areas. Government-controlled health care would lead to a decrease in patient flexibility. Just because Americans are uninsured doesn t meat they can t receive health care. Government-mandated procedures will likely reduce doctor flexibility and lead to poor patient care Reduced pay to doctors dissuading from profession Healthy people have to pay for the sick. People will do little to save medical cost. Citizens do not curb drug costs and doctor visits thus increasing costs Loss of insurance industry jobs Should the Government provide universal health care for all American? Yes! The number of uninsured citizens has grown to over 46 million. Health of all citizens benefits a nation economically Health care has become increasingly unaffordable for businesses and individuals Provides coverage to all regardless of ability to pay People can get same health care wherever they go. We can eliminate wasteful inefficiencies. Medical professionals can concentrate on healing the patient. It will encourage patients to practice preventive medicine and inquire about problems early when treatment will be light. Profit driven care leads to more deaths and is more expensive Profit adversely affects the cost and quality of healthcare. Options for funding universal care Mix of private and public funding Ex. Europe Most from tax revenue Single Payer: a single entity, usually government, acts as the administrator to collect all health care fees and payout all health care costs Ex. Canada Health Security Act 1993 Proposed by President Bill Clinton Would have provided all Americans and legal residents with health benefits Every citizen would have received a Health Security Card that guaranteed comprehensive benefits (that could never be taken away) 8
Comprehensive Benefits Includes hospital care, emergency services, preventative care, mental health and substance abuse services, family planning, pregnancy related care, hospice care, home health and extended care services following acute illness, ambulance services, outpatient laboratory and diagnostic services, prescription drugs, outpatient rehabilitation, medical equipment, vision and hearing care, periodic medical check ups, preventative dental care, children immunizations, routine lab work Health Security Act 1993 Principles of health care reform: Security: Guarantee of comprehensive benefits for all Americans Savings: Control rising health care costs for consumers, business and nation Quality: Improve quality of health care Choice: Increase choices for customers Simplicity: Reduction of paperwork and a simplified system Responsibility: Make everyone responsible for health care Health Security Act 1993 Focus of plan Coverage regardless of change of employer, employment status, marital status or medical condition Most continue to receive coverage through work Workers have choice of health care plan Employers contribute to the purchase of health coverage for both full and part time employees Medicare beneficiaries still receive benefits If we have time, let s talk about it! Should we? What type of program? Can our government manage it? What will it do to our Taxes/expenses? What will be the impact on our health care workers?? 9