Using What Works: Medicare, Medicaid, and the State Children s Health Insurance Program as a Base for Health Care Reform

Transcription

1 Using What Works: Medicare, Medicaid, and the State Children s Health Insurance Program as a Base for Health Care Reform Karen Davis and Cathy Schoen President and Senior Vice President The Commonwealth Fund kd@cmwf.org Invited Testimony House Committee on Energy and Commerce Subcommittee on Health September 18, 2008

2 Health Insurance Coverage Million Uninsured, 2007 Uninsured (15%) Employer Military (55%) (1%) Military (1%) Uninsured (17%) Employer (62%) Individual (5%) Medicaid (10%) Individual (6%) Medicaid (11%) Medicare (13%) Medicare (2%) Total population Under-65 population Source: Authors estimates based on S. R. Collins, C. White, and J. L. Kriss, Whither Employer-Based Health Insurance? The Current and Future Role of U.S. Companies in the Provision and Financing of Health Insurance (New York: The Commonwealth Fund, Sept. 2007) and analysis of the Current Population Survey, March 2008, by Bisundev Mahato of Columbia University.

3 Percentage of Uninsured Children Has Declined Since Implementation of SCHIP While Uninsured Working-Age Adults Have Increased, Percent of Population Group Uninsured Adults (Ages 18-64) * Note: Census methodology changed with the 2000 ASEC, which collected data for Population controls and implementation of the verification question led to lower estimates of the uninsured. Source: Calculated from DeNavas-Walt C, Proctor B, and Smith J. Income, Poverty, and Health Insurance Coverage in the United States: Washington: Census Bureau, Non-elderly Children (Ages 0-17)

4 Uninsured Rates, By State, Two-year Average, MA 7.9 TX %-11% 11%-13.8% 13.8%-17.25% 17.25%-24.8% Source: DeNavas-Walt C, Proctor B, and Smith J. Income, Poverty, and Health Insurance Coverage in the United States: Washington: Census Bureau, 2008.

5 Uninsured by Household Income, $75,000 or more 9.1 million 20% Less than $25, million 30% $50,000-$74, million 19% $25,000-$49, million 32% Total Uninsured Population = 45.7 Million Source: DeNavas-Walt C, Proctor B, and Smith J. Income, Poverty, and Health Insurance Coverage in the United States: Washington: Census Bureau,

6 Uninsured by Federal Poverty Level, %+ FPL 11.8 million 26.0% Less than 100% FPL 11.5 million 25.3% % FPL 8.9 million 19.5% % FPL 13.3 million 29.2% Total Uninsured Population (Persons in Poverty Universe) = 45.6 Million Source: US Census Bureau, Current Population Survey, Annual Social and Economic Supplement,

7 Employer-Provided Health Insurance, by Income Quintile, Percent of population under age 65 with health benefits from employer 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 88% 88% 87% 87% 87% 87% 86% 86% 85% 84% 84% 83% 82% 82% 77% 77% 75% 74% 74% 72% 72% 62% 60% 57% 55% 54% 54% 53% 29% 26% 25% 23% 23% 22% 22% Highest Quintile Fourth Third Second Lowest quintile Source: E. Gould, The Erosion of Employment-Based Insurance: More Working Families Left Uninsured, EPI Briefing Paper No. 203 (Washington, D.C.: Economic Policy Institute, Nov. 2007). 7

8 Employer Coverage Continues to Be Major Source of Coverage for Employees of Larger Firms 8 Percent of firms offering health benefits Total workers workers workers workers workers Source: S. R. Collins, C. White, and J. L. Kriss, Whither Employer-Based Health Insurance? The Current and Future Role of U.S. Companies in the Provision and Financing of Health Insurance (New York: The Commonwealth Fund, Sept. 2007). Data: The Kaiser Family Foundation/Health Research and Educational Trust, Employer Health Benefits, 2000 and 2007 Annual Surveys.

9 Single Premium by Size of Firm, Adjusted for Actuarial Value 9 Dollars $4,000 $3,500 $3,000 $3,383 $3,150 $3,579 $3,354 $3,146 $3,205 $3,134 $2,500 $2,000 $1,500 $1,000 $500 $0 All small All large (1-49) (50 or Employees Employees Employees Employees Employees more) Source: J. Gabel, R. McDevitt, L. Gandolfo et al., Generosity and Adjusted Premiums in Job-Based Insurance: Hawaii Is Up, Wyoming Is Down, Health Affairs, May/June (3):

10 Percent of Children and Adults with Employer-Sponsored Coverage, by Poverty 10 Percent with coverage through their own or other employer Children Children Children Adults* Adults* Adults* <100% FPL % 200%+ FPL <100% FPL % 200%+ FPL FPL FPL FPL = federal poverty level. *Adults age 19 and over; children are age 18 and under. Source: Analysis by S. Glied and B. Mahato of Columbia University of the 2006 Current Population Survey.

11 Adults Ages Who Are Uninsured and Underinsured, By Poverty Status, Insured all year, not underinsured Uninsured during year Underinsured* 100% 80% % 14 40% 20% % Total Under 200% of 200% of poverty or poverty more *Underinsured defined as insured all year but experienced one of the following: medical expenses equaled 10% or more of income; medical expenses equaled 5% or more of incomes if low-income (<200% of poverty); or deductibles equaled 5% or more of income. Data: 2007 Commonwealth Fund Biennial Health Insurance Survey Source: Schoen C, Collins SR, Kriss JL, Doty MM. How many are underinsured? Trends among U.S. adults, 2003 and Health Aff (Millwood) Jul-Aug;27(4):w Epub 2008 Jun 10.

12 Problems with Medical Bills or Accrued Medical Debt Increased, Percent of adults ages with medical bill problems or accrued medical debt Total Low income Moderate income Middle income High income Note: Income refers to annual income. In 2005 and 2007, low income is <$20,000, moderate income is $20,000 $39,999, middle income is $40,000 $59,999, and high income is $60,000 or more. Source: The Commonwealth Fund Biennial Health Insurance Surveys (2005 and 2007).

13 13 Uninsured Adults and Adults with Gaps in Coverage Have Lower Rates of Cancer Screening Tests, 2007 Percent of adults ages Total Insured all year Insured now, time uninsured in past year Uninsured now Received Pap test Received colon cancer screening Received mammogram Note: Pap test in past year for females ages 19 29, past three years age 30+; colon cancer screening in past five years for adults ages 50 64; and mammogram in past two years for females ages Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

14 Uninsured and Underinsured Adults with Chronic Conditions Are More Likely to Visit the ER for Their Conditions 14 Percent of adults ages with at least one chronic condition* Total Insured all year, not underinsured Insured all year, underinsured Insured now, time uninsured in past year Uninsured now Skipped doses or did not fill prescription for chronic condition because of cost** Visited ER, hospital, or both for chronic condition *Hypertension, high blood pressure; heart disease; diabetes; asthma, emphysema, or lung disease. **Adults with at least one chronic condition who take prescription medications on a regular basis. Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

15 An Estimated 116 Million Adults Were Uninsured, Underinsured, Reported a Medical Bill Problem, and/or Did Not Access Needed Health Care Because of Cost, Adequate coverage and no bill or access problem 61.4 million 35% Medical bill/ debt problem 17.7 million 10% Medical bill/debt and cost-related access problem 54.4 million 31% Uninsured anytime during the year or underinsured 17.6 million 10% Cost-related access problem 25.9 million 15% 177 million adults, ages Source: The Commonwealth Fund Biennial Health Insurance Survey (2007).

16 16 Medicare: Working for Elderly and Disabled Americans

17 Only Two Percent of Premiums in Medicare and Medicaid Are Spent on Non-Medical Expenditures 17 Percent of premiums spent on non-medical expenditures Non-group 25 40% Small group 15 25% Large group 5 15% Medicaid 2% Medicare 2% Source: K. Davis, B. S. Cooper, and R. Capasso, The Federal Employees Health Benefit Program: A Model for Workers, Not Medicare (New York: The Commonwealth Fund, Nov. 2003); M. A. Hall, The geography of health insurance regulation, Health Affairs, March/April 2000; 19(2): ;

18 Access to Physicians for Medicare Beneficiaries and Privately Insured People, Percent Routine Care 83 Illness or Injury Never had a delay to appointment Medicare Privately Insured Source: MedPAC Report to the Congress: Medicare Payment Policy, March 2006, p. 85. Primary care Specialist No problem finding physician

19 Access Problems Because of Cost 19 Percent of adults who had any of four access problems 1 in past year due to cost 75 61* * 39* 40* 35* 25 17* 15 0 Ages Ages 65+ Medicare, 65+ Employer, Individual, Medicaid, Medicare, Uninsured, Note: Adjusted percentages based on logistic regression models; age groups controlled for health status and income; insurance status controlled for health status, income, and prescription coverage. 1 Did not fill a prescription; did not see a specialist when needed; skipped medical test, treatment, or follow-up; did not see doctor when sick. * Significant difference at p<.01 or better; referent categories are ages and Medicare 65+. Source: K. Davis and S.R. Collins, Medicare at Forty, Health Care Financing Review, Winter (2):53 62.

20 Previously Uninsured Medicare Beneficiaries with History of Cardiovascular Disease or Diabetes Have Much Higher Self-Reported Hospital Admissions After Entering Medicare Than Previously Insured 20 Number of hospital admissions per 2-year period Uninsured before age 65 Continuously insured before age Source: J. M. McWilliams et al., Use of Health Services by Previously Uninsured Medicare Beneficiaries, New England Journal of Medicine 357;2, Jul

21 Rating of Current Insurance 21 Percent of adults who rated their current insurance as excellent or very good * 68 44* 41* 54* 52* 20 0 Ages Ages 65+ Medicare, 65+ Employer, Individual, Medicaid, Medicare, Note: Adjusted percentages based on logistic regression models; age groups controlled for health status and income; insurance status controlled for health status, income, and prescription coverage. * Significant difference at p<.01 or better; referent categories are ages and Medicare 65+. Source: K. Davis and S.R. Collins, Medicare at Forty, Health Care Financing Review, Winter (2):53-62.

22 Percent of Adults Ages Who Are Very/Somewhat Interested in Receiving Medicare Before Age 65, by Insurance Status and Income 22 Percent of adults ages and not on Medicare Somewhat interested Very interested Total Employer Individual Uninsured Less than $25,000 $25,000 $39,999 $40,000 $59,999 $60,000 or more Source: S. R. Collins, et al., Will You Still Need Me? The Health and Financial Security of Older Americans: Findings from The Commonwealth Fund Survey of Older Adults, Commonwealth Fund, June 2005.

23 Bending the Curve: Fifteen Options that Achieve Savings Cumulative 10-Year Savings 23 Producing and Using Better Information Promoting Health Information Technology -$88 billion Center for Medical Effectiveness and Health Care Decision-Making -$368 billion Patient Shared Decision-Making -$9 billion Promoting Health and Disease Prevention Public Health: Reducing Tobacco Use -$191 billion Public Health: Reducing Obesity -$283 billion Positive Incentives for Health -$19 billion Aligning Incentives with Quality and Efficiency Hospital Pay-for-Performance -$34 billion Episode-of-Care Payment -$229 billion Strengthening Primary Care and Care Coordination -$194 billion Limit Federal Tax Exemptions for Premium Contributions -$131 billion Correcting Price Signals in the Health Care Market Reset Benchmark Rates for Medicare Advantage Plans -$50 billion Competitive Bidding -$104 billion Negotiated Prescription Drug Prices -$43 billion All-Payer Provider Payment Methods and Rates -$122 billion Limit Payment Updates in High-Cost Areas -$158 billion Source: C. Schoen et al., Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending, Commonwealth Fund, December 2007.

24 Total National Health Expenditures, Projected and Various Scenarios 24 Dollars in trillions * Selected individual options include improved information, payment reform, and public health. Source: C. Schoen et al., Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending, The Commonwealth Fund, December Data: Lewin Group estimates.

25 25 Medicaid/SCHIP: Working for Most at Risk Americans

26 Medicaid s Role for Selected Populations 26 Percent with Medicaid Coverage: Poor Near Poor 23% 40% Families All Children 27% Low-Income Children 51% Low-Income Adults Births (Pregnant Women) 20% 41% Aged & Disabled Medicare Beneficiaries People with Severe Disabilities 19% 20% People Living with HIV/AIDS Nursing Home Residents 44% 65% Note: Poor is defined as living below the federal poverty level, which was $17,600 for a family of 3 in SOURCE: Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, and Urban Institute estimates; Birth data: NGA, MCH Update.

27 Medicaid Enrollees and Expenditures by Enrollment Group, Elderly 10% Disabled 14% Adults 26% Children 50% Elderly 28% Disabled 42% Adults 12% Children 18% Enrollees Expenditures on benefits Total = 59 million SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on 2005 MSIS data. Total = $275 billion

28 Thirty-five Percent of Medicaid Spending Goes to Long-Term Care 28 Community-based 9.3% Nursing Home 20.4% Non-LTC Medicaid 65.2% ICF/MR 5.1% Note: ICF/MR = intermediate care facilities for the mentally retarded Source: MEDSTAT HCBS

29 Medicaid Financing of Safety-Net Providers 29 Public Hospital Net Revenues by Payer, 2004 Health Center Revenues by Payer, 2006 Self Pay/ Other 7% Self Pay 7% Other 9% Medicare 20% Commerica l 24% Medicaid 35% State/Local Subsidies 14% Private 7% Medicare 6% Federal Grants 22% Medicaid 37% State/Local 13% Total = $29 billion Total = $8.1 billion SOURCE: Kaiser Commission on Medicaid and the Uninsured, based on America s Public Hospitals and Health Systems, 2004, National Association of Public Hospitals and Health Systems, October KCMU Analysis of 2006 UDS Data from HRSA.

30 Barriers to Health Care Among Nonelderly Adults, by Insurance Status, Percent of adults (age 19 64) reporting in past 12 months: No Regular Source of Care 10% 10% 54% Postponed Seeking Care because of Cost 6% 11% 26% Uninsured Needed Care but Did Not Get It Could Not Afford Prescription Drug 3% 4% 9% 14% 23% 23% Medicaid/Other Public Private NOTE: Respondents who said usual source of care was the emergency room were included among those not having a usual source of care. SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of 2006 NHIS data.

31 Children s Access to Care, by Health Insurance Status, Employer/Other Private Medicaid/Other Public Uninsured 37% 30% 23% 17% 17% 12% 12% 13% 4% 2% 4% 4% 2% 1% 2% 2% 7% 4% No Usual Place of Care Postponed Seeking Care Due to Cost Needed Care but Did Not Get it Due to Cost Last MD Contact >2 Years Ago Unmet Dental Need Last Dental Visit >2 Years Ago NOTE: MD contact includes MD or any health care professional, including time spent in a hospital. Data is for all children under age 18, except for dental visit and unmet dental need, which are for children age Respondents who said usual source of care was the emergency room were included among those not having a usual source of care. All estimates are age-adjusted. SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of National Center for Health Statistics, CDC Summary of Health Statistics for U.S. Children: NHIS, 2006.

32 Medicaid s Spending on Health Services Is Lower Than That of Private Coverage 32 Expenditures ($) on health services for people without health limitations in private coverage and Medicaid Private Medicaid Inpatient Office-based doctor Outpatient/ER Prescription Dental/other Source: Hadley J., Holahan J., Is health care spending higher under Medicaid or private insurance? Inquiry Winter;40(4):

33 Community Care of North Carolina: Medical Homes Can Save Health Care Costs 33 Asthma Initiative: Pediatric Asthma Hospitalization Rates (April 2000 December 2002) Inpatient admission rate per 1000 member months 8.2 Access I 5.3 Access II & III 14 networks, > 3,200 MDs, >800,000 patients $3 PMPM to each network Hire case managers/medical management staff $2.50 PMPM to each PCP to serve as medical home and participate in disease management Care improvement: asthma, diabetes, screening/referral of young children for developmental problems, and more! Case management: identify and facilitate management of costly patients From July 1, 2003 through June 30, 2006, actuarial studies conducted by Mercer documented that CCNC saved the state over $473 million dollars [September 2007]. Source: L. A. Dobson, Presentation to ERISA Industry Committee, Washington, DC, Mar. 12, 2007 (Updated 6/13/08)

34 34 Private Insurance: Employer Coverage Works Better Than Individual Markets

35 Risk Pooling and Employer Premium Contributions 35 Lower the Cost of Health Benefits for Adults with Employer Coverage Relative to Those with Individual Market Coverage Percent of adults ages insured all year with private insurance 75 Annual out-of-pocket premium $6,000 or more 50 Annual out-of-pocket premium $3,000 $5, Total Employer Individual Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families, The Commonwealth Fund, September 2006.

36 Individual Market Is Not an Affordable Option for Many People 36 Adults ages with individual coverage or who thought about or tried to buy it in past 3 years who: Total Health Problem No Health Problem <200% Poverty 200%+ Poverty Found it very difficult or impossible to find coverage they needed 34% 48% 24% 43% 29% Found it very difficult or impossible to find affordable coverage Were turned down or charged a higher price because of a pre-existing condition Never bought a plan Source: S. R. Collins, J. L. Kriss, K. Davis, M. M. Doty, and A. L. Holmgren, Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Well-being of American Families, The Commonwealth Fund, Sept 2006.

37 Health Care Costs Concentrated in Sick Few Sickest 10% Account for 64% of Expenses 37 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Distribution of health expenditures for the U.S. population, by magnitude of expenditure, % 5% 10% 50% U.S. population 24% 49% 64% 97% Health expenditures Expenditure Threshold (2003 Dollars) $36,280 $12,046 $6,992 $715 Source: S. H. Zuvekas and J. W. Cohen, Prescription Drugs and the Changing Concentration of Health Care Expenditures, Health Affairs, Jan/Feb (1):