Healthcare Reform (ACA) Update Greater Magnolia Chamber of Commerce

Transcription

1 Healthcare Reform (ACA) Update Greater Magnolia Chamber of Commerce FREDDY WARNER System Executive, Public Policy & Government Relations Memorial Hermann Health System March 27, 2014

2 PRESENTATION OUTLINE Healthcare Reform Dynamics Healthcare Reform By the Numbers Texas Impacts Election Cycle Federal and State Impacts Political Climate

3 Current System - Unsustainable Healthcare Funding Mechanism unsustainable: Federal Deficit too high Medicare: largest single threat to the federal budget State Budget Impact Medicaid largest threat Employer-Sponsored Coverage Declining since Mid-1970s: Economists say rate of change will not sustain the current model: In ~ 10 years, the average cost to cover a family of 4: $32,000 annually

4 Current System - Unsustainable Current Health Insurance Market and Regulatory Structure provides coverage predominantly for healthy people: To implement insurance reforms, HCR law must compel people to take personal responsibility and change behavior If people must participate in the system to ensure its viability, they need affordable options Meaningful reform must include tools to manage the cost of medical care over time

5 Impact of EMTALA Emergency Medical Treatment & Active Labor Act Guaranteed access to health care established long before PPACA - Previous administrations/congress never established funding mechanism to pay for it EMTALA enacted by Democratic House and Republican Senate, and signed into law by President Ronald Reagan in 1986 Without reform, EMTALA requirements demand more than hospitals can give without significant cost-shifting

6 Healthcare Reform By the Numbers 16 M of the 32 M: Expansion of MEDICAID Not in Texas Total (2019) US Medicaid Population: 42.3 M 16 M of the 32 M: Access Through Health Insurance Exchanges Not in Texas 23 M Residents without insurance in 2019: 15 M Legal Residents 8 M Undocumented

7 Healthcare Reform By the Numbers $940B over 10 Yrs (CBO Score ) > $1 T CBO Upward Revision of Cost B (2010) $138 B Deficit Reduction 1 st 10 Yrs (CBO) $1.2 T Deficit Reduction 2 nd 10 Yrs (CBO) CBO vs. CMS Office of the Actuary CBO: Federal Spending Actuary: Federal & National Spending Coverage Expanded to 32 M Legal Residents

8 Healthcare Reform By the Numbers 50% - New Taxes, Fees & Penalties 50% - Cuts to Medicare & Medicaid Increases Medicare Part A (Hospital Insurance) Tax Rate by 0.9% (to 2.35%) on earnings over $200K/250K (2013) Assesses 3.8% Tax on Passive/Unearned Income for $200K/250K earners (2013) Individual Mandate (2014) Supreme Court Challenge Employer Mandate (2014) - Delayed

9 Healthcare Reform By the Numbers 10% tax on Tanning Services (2010) Pharmaceutical Industry Annual Fee (2011) 2.3% tax on Medical Devices (2013)* Health Insurance Industry Annual Fee (2014)* 40% excise tax on High-Value, Employer- Provided health insurance plans (2018)* Cadillac Plans Aggregate Value Exceeding $10,200 (Ind.) or $27,500 (Family) MOST will be subject to it * Pending 2014 Congressional Legislative Action

10 Healthcare Reform Texas Impacts 2014 Current Estimate for MEDICAID/CHIP Caseload: 4.1 M Anticipated Caseload Under Reform: 6.3 M 2.2 M Additional Enrollees Factor: HHSC Understates Estimates of Enrollment Increases State Cost Estimate (General Revenue) for : +$27 B Impact of No Medicaid Expansion? HHSC Agencies Infrastructure Needs State Healthcare Workforce Needs

11 Individual Mandate Purchase Insurance or Pay penalty: Year Penalty 2014 Greater of $95 or 1% of income 2015 Greater of $325or 2% of income 2016 Greater of $695 or 2.5% of income 2017 Greater of $695(plus COLA) or 2.5% of income US Supreme Court Upheld (June 2012) Motivate Personal Responsibility?

12 Employer Mandate Beginning 2014, employers with more than 50 fulltime workers that do not offer coverage and have at least one worker who receives the premium assistance tax credit must pay a fee of $2,000 for each full-time employee (first 30 employees are exempt from the calculation) Delayed until 2015 Employers with more than 200 employees would be required to automatically enroll employees into health insurance plans offered by the employer Temporary reinsurance program created for employers providing coverage to retirees over age 55 who are not eligible for Medicare

13 Health Insurance Exchanges State-Run Exchanges facilitate purchase health insurance for Individuals; and Small Business Health Options Program (SHOP Exchange) for small businesses (Was 2014 Now 2015) Individuals and small employers eligible to participate 2017, states may allow Large Employers to participate Insurance Companies may offer coverage outside of Exchange (Federal) HHS Establishing Exchanges for States Declining (Federal) HHS Will Determine Insurance Coverage according to five benefit levels: Perry Said Texas will Not Create Exchange Abbott? Davis? 2015 Legislature?

14 Does the ACA Bend the Cost Curve? Current Payment System based on volume, not quality (e.g., safety, outcomes) Health industry leaders believe the Fee for Service (FFS) system is ineffective and believe payment reform should include financial incentives that reward right behaviors ( Pay for Performance ) FFS Model Encourages Profitable Services In most communities, hospitals, physicians and long-term care providers operate independently; thus coordination and collaboration is suboptimal

15 How to Bend the Cost Curve Delivery System Reforms Can Reduce Costs: Accountable care organizations (ACO) - integrated hospital and physician networks, sharing in savings generated by providing high-quality, lower-cost care Bundled Payments payments for a complete episode of illness vs. separate payments by provider and/or procedure Value-Based Purchasing quality vs. quantity Readmission, Hospital-Acquired Infection Penalties

16 Healthcare Reform TEXAS Impacts 2013 Legislative Session: Budget Cycle Medicaid As Key Factor in Shortfall Perry Says No Medicaid Expansion Perry Says No Health Insurance Exchange 2015 Legislature? Healthcare Workforce Issues Urban Vs Rural Issues Health Information Technology: Transition to EMR/EHR Undocumented Remain Unaddressed (EMTALA)

17 2014 Election, Political, & Legislative Dynamics 2013 Congress Senate House Repeal, Replace, Amend (60-Vote Threshold or 51-Vote Reconciliation ) Remember the Fiscal Cliff? (American Tax Relief Act) Sequestration (Deficit Reduction Strategy) Continuing Resolution (NO Federal Budget) Debt Ceiling Negotiations March 2014 Doc Fix Medicare Reimbursement Rate Schedule (Physicians v. Hospitals) March 31, 2014

18 Election, Political, & Legislative Dynamics Texas Impacts: Public Education v. Health & Human Services ($) 2 nd Positive Budget Cycle Tea Party Impact New Revenue? Rainy Day Fund? Supplemental Payments for Safety Net Hospitals Treating Medicaid & Indigent Impact of 2014 Election Cycle Congressional/Federal State Legislative

19 QUESTIONS