Traits ESI dominant Regulation concentrated on smaller markets 3 rd, 4 th, 5 th party payment Pays bills, provides admin infrastructure Annual contracts Delegated decisions = less transparency
Trends ESI declining Excess health care cost growth Relatively low profit margins Variety (not always most important variation) Occasionally manages care Desired, yet unpopular blame-magnet
Key History Fueled health care growth (too much of a good thing?) Tax exclusion (1943, 1954) McCarran-Ferguson (1945) Medicare, Medicaid (1965) ERISA (1974) HIPAA (1996) Managed care backlash Consumer-driven health care
Affordable Care Act Health Insurance Reform? More regulatory control, redistribution Individual mandate -- the glue Employer mandate -- limit budget exposure & coverage disruption, set qualified insurance State exchanges -- base for expansion Income-based subsidies – the lure Medicaid – lower cost loss leader Rate compression (modified community rates) Pre-existing conditions (guaranteed issue) Essential health benefits
ACA Implementation Early Appetizers, Warning Shots AFDS (dependent slacker) coverage First-dollar preventive benefits No pre-ex limits for kids Minimum loss ratios No lifetime limits, annual limit phase-out Rate review kibitzing Patients Bill of Rights redux Watering down grandfathering protection Waivering on mini-med plans
Coming Attractions (2014) Defining essential benefits Certifying (any?) state exchanges by Jan 2013 Passing out coverage expansion subsidies Most regs for fully insured coverage Larger employers drop coverage? With or without individual mandate? What about those promised premium savings?
Alternatives to Old Status Quo? Back to basics insurance regulation (solvency, transparency, information, competition, contracts) State competition in ins reg (PASL plus) Retargeting subsidies (high-risk pools, Medicaid) Usable value info beyond health insurance Leveling the ESI/individual playing field Mainstreaming more Medicaid beneficiaries Defined contribution financing for taxpayer subsidies
To Be Reconsidered & Determined… Can willing buyers & sellers reach agreements? Stop hiding the real price tags Longer-term insurance commitments Customization/standardization continuum How much & when should health status matter? Incentives for individual health behavior change Cashing out broad-based subsidies Framing clearer insurance choices Maximizing value options for different levels of resources & preferences Lowering barriers to entry & exit