Introduction to the U.S. Health Insurance Marketplace

Transcription

1 Introduction to the U.S. Health Insurance Marketplace 1 E V O L U T I O N A N D R E F O R M D A L E A. R E H K A M P W E E K F O U R R E V I S E D S P R I N G

2 Overview Week One: Level Setting Marketplace Principles, Establishing a Global and Historical Context Week Two: Attempts at Health Care Market Transformation Part 1 Medicare, Managed Care Week Three: Attempts at Health Care Market Transformation Part HSA, PPACA Week Four: Innovation - Emerging Issues Looking Ahead 2

3 Just another thought 3

4 Level Set: If You Remember Nothing Else 4 Premium = (Cost) Claims + Administration (Eligible) Premium Rate Setting Method: Community Rated Experience Rated Unit Cost Utilization (Volume / Selection) Claim Reserves Claim Payment Member Service Sales/Marketing Network Management Care Management Margin/Profit

5 Health Care Spending Source: Health Care Costs 101: Reaching a Spending Plateau?, CHCF November 2015

6 Reform: Health Security Act, PPACA and Beyond 6

7 Health Security Act 0f 1993 (Hillarycare) 7 Key Elements: Universal coverage Mandatory enrollment Established minimum coverage and maximum outof-pocket levels Establishment of regional alliances of providers Introduced subisidies for low income individuals Plan to be administered by states

8 Organized Industry Resistance to Reform Circa If they choose, we lose Source: Health Insurance Association of America ad campaign

9 Health Care Spending Source: Health Care Costs 101: Reaching a Spending Plateau?, CHCF November 2015

10 Medicare Reform Part D 10 Source: KFF -

11 Medicare Reform Part D Final bill the result of intense negotiations Republicans in control Final House vote infamous longest roll-call in history Did not address drug importation Cost projections later disputed (budget cost a key process element) OMB projected new law would cost 35% more than stated 11

12 Medicare Reform Part D - Resistance 12 "We must be realistic about the cost of this new entitlement program. For anyone who believes this bill will cost a maximum of $400 billion over the next ten years, I have some ocean front property in Gila Bend, Arizona to sell you. Senator John McCain Press Release: June 26, 2003

13 Medicare Reform Part D And the Winners Are? 13 Low-income Medicare beneficiaries who don t have supplemental insurance Employers, Managed care plans, rural health care providers, teaching hospitals (received $125 billion in short-term subsidies) Drug manufacturers which would see higher demand and won on: No direct administration of benefits by Federal government No explicit cost control measures No legalization of drug re-importation

14 2006 Medicare Part D Begins 14 Source: KFF -

15 Pre- ACA: Reform Context 15 Source: The Leaders Project, August 2009, BipartisanPolicy.org

16 ACA Insurance Provisions 16 March 23, 2010

17 ACA Three Goals (?) Expand access to affordable and comprehensive health insurance; 2. Improve the quality and efficiency of care; 3. Constrain rising health costs.

18 ACA Changes to Private Insurance 18 Guaranteed Availability end to pre-existing condition limits Minimum essential coverage required Premiums allowed to vary based on age, geographic area, tobacco use and family size Young adults allowed to remain on parent s coverage up to age 26 ends pre-ex for kids Prohibits lifetime limits rescinding coverage except in cases of fraud New health plans required to cover certain preventive services Rate increases subject to review Minimum loss ratios subject to consumer rebate

19 Impact of Penalties Under Individual Mandate 19 Covered by Health Insurance?

20 ACA - American Health Benefit Exchanges 20 Open to citizens and legal immigrants Plan benefits must meet minimum standards Premium subsidies for % of poverty level Cost sharing subsidies for % of poverty level

21 ACA Employer Requirements 21 Employers with more than 50 employees with at least one employee receiving subsidy on the exchange: Must offer coverage or pay fee Pay to offset cost of employees who select subsidized coverage

22 Why the Cadillac Tax? Responsible Consumers? 22 The so-called "Cadillac tax" is an excise tax on employers that offer high-cost health plans to their employees. Begin to limit excessive tax-advantaged plans.

23 ACA Competition and the Co-Op Health Plans 23 Formed as compromise over public option Objective was to introduce competition via new non-profit entities Start-up funds (loans) provided - loan pool immediately faced cutbacks To qualify entity must be member governed and community focused not existing insurance companies Of 147 applications 24 organizations in 23 states were selected to enter the market in 2013 open enrollment period (for 1/1/14)

24 ACA Co-Op Heath Plans 24 Source: Why Are Many Co-Ops Failing? Commonwealth Fund, December 2015

25 ACA - CO-OP Market Positioning 25

26 ACA Co-Op Plans Key Policy Decisions 26 Source: Why Are Many Co-Ops Failing? Commonwealth Fund, December 2015

27 ACA Co-Op Health Plans Failing 27 Key value proposition/assumption being tested: Lower administrative costs will lead to market success Market entry rate setting leads to failure Unexpected illness burden selection problems Competitiveness of unit cost questioned Note: Relationship to proposed selling insurance across state lines solution

28 Impact of Network (Unit ) Cost 28 Source: Industry marketing material

29 ACA: Accountable Care Organizations (ACOs) Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve. 29 Source:

30 ACA - ACO Shared Savings Results 30 Source: The Affordable Care Act s Payment and Delivery System Reforms: A Progress Report at Five Years Commonwealth Fund May 2015

31 Let s Take a Break 31

32 Health Care Spending Source: Health Care Costs 101: Reaching a Spending Plateau?, CHCF November 2015

33 Quality Transparency 33 Source: GAO Health Care Transparency Actions Needed, October 2014

34 GAO Assessment of CMS Tools 34 Source: GAO Health Care Transparency Actions Needed, October 2014

35 Medicare: Hospital Compare 35 Source: CMS- MLN Connects National Provider Call: Overall Hospital Quality Star Ratings on Hospital Compare, August 13, 2015

36 Hospitals Fight Quality Rating 36 Hospitals reviewed the ratings earlier this year. Only 87 of more than 3,600 U.S. hospitals got the highest five-star rating, according to the American Hospital Association. Just over half of the hospitals fell within the three-star range. A total of 142 got one star. Modern Healthcare April 20, 2016 CMS delays release of Hospital Compare overall star ratings AHA News Now Apr 20, 2016 Lawmakers want CMS to delay publishing five-star hospital quality ratings (60 Senators) By Shannon Muchmore April 12, House members urge CMS to delay overall hospital quality star ratings AHA News Now Apr 18, 2016 Consumers Interest In Provider Ratings Grows, And Improved Report Cards And Other Steps Could Accelerate Their Use Health Affairs, April 2016

37 ACA Impact on Hospital Care 37 Source: The Affordable Care Act s Payment and Delivery System Reforms: A Progress Report at Five Years Commonwealth Fund May 2015

38 Transparency: Medicare Health Plan Star Ratings 38 Source: Medicare.gov

39 Rewards: Medicare Value Based Reimbursement 39

40 ACA Payment Reforms 40 Source: The Affordable Care Act s Payment and Delivery System Reforms: A Progress Report at Five Years Commonwealth Fund May 2015

41 Looking Ahead: Population Health, ACOs and Deja Vu 41 Source: The Integration of Finance and Delivery of Health Care, Marc Malloy, November 2015

42 Looking Ahead: Medicare to Face Funding Pressure 42 Source: Kaiser Family F foundation A Primer on Medicare, March 2015

43 HC Consumerism 43

44 Consumerism: High Deductible Health Plans 44 Source: PWC HRI Medical Cost Trend: Behind The Numbers 2016, June 2015

45 Consumerism: High Deductible Health Plans 45 Source: PWC HRI Medical Cost Trend: Behind The Numbers 2016, June 2015

46 Consumerism: D2C 46 Note: November 2015 AMA Calls for End to D2C Drug Advertising Source:

47 Access: Medical Tourism Types of Medical Tourism Outbound - U.S. patients traveling to other countries to receive medical care 2. Intrabound - U.S. patients traveling within the U.S. to receive medical care outside their geographic area, typically to a Center of Excellence in another state/region e.g. Lowes/Cleveland Clinic

48 Looking Ahead: Dealing With High Cost Drugs Example Impact of Hepatitis C Drugs 48 Source: Milliman The Impact of New Hepatitis C Drug Therapy on Individual Medicare Part D Spending, July 2014

49 Looking Ahead: Addressing Medicare Polypharmacy and Opioid Use 49 Source: Medpac June 2015 Report to Congress Medicare and the Health Care Delivery System

50 Looking Ahead: Drug Shortages 50 Source: FDA - Strategic Plan for Preventing and Mitigating Drug Shortages, October 2013

51 Looking Ahead: Addressing Medicare Fraud 51 Upcoding Risk Scores Source: The Center for Public Integrity,

52 Looking Ahead: Addressing Medicare Fraud 52 Source:

53 Individual Marketplace New Products

54 Questions? 54