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Health Care in Obama’s 1st Year: More of the Same is not Reform – It’s a Placebo Leonard Rodberg, PhD Urban Studies Dept., Queens College/CUNY and NY Metro.

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Presentation on theme: "Health Care in Obama’s 1st Year: More of the Same is not Reform – It’s a Placebo Leonard Rodberg, PhD Urban Studies Dept., Queens College/CUNY and NY Metro."— Presentation transcript:

1 Health Care in Obama’s 1st Year: More of the Same is not Reform – It’s a Placebo Leonard Rodberg, PhD Urban Studies Dept., Queens College/CUNY and NY Metro Chapter, Physicians for a National Health Program PNHP-NY Speaker/Leadership Training Nov. 14, 2009

2 Current Reform Plans Focus on the Uninsured… Source: U.S. Census Bureau, Current Population Survey, 1988 to 2009 Annual Social and Economic Supplements. Numbers in millionsRecession 50 40 30 20 10 0 1987 1990 1993 1996 1999 2002 2005 2008 7.3 million 8.2 million 31.0 million Children All people 46.3 million 9

3 Percent 15.4% 29.0% 58.5% 66.7% 75.5% Government coverage Employment-based coverage Any private coverage Recession 62.1% 12.9% 23.3% Uninsured rate Note: The estimates by type of coverage are not mutually exclusive. Source: U.S. Census Bureau, Current Population Survey, 1988 to 2009 Annual Social and Economic Supplements. …But the Percent Uninsured has Hardly Changed at All 80 60 40 20 0 1987 1990 1993 1996 1999 2002 2005 2008 19

4 Why Health Care Is On the Agenda: Escalating Cost Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2009.

5 The Epidemic of Underinsurance Source: Too Great a Burden, Families USA, December 2007 Number of people spending more than 10% of income on health care (Millions)

6 Goals of Health Care Reform Reduce or eliminate uninsurance Improve coverage for those with insurance (i.e., reduce or eliminate underinsurance) Reduce the cost of health care Slow the increase in the cost of health care

7 Most People Get Their Coverage from the Private Sector… Source: Income, Poverty, and Health Insurance Coverage in the United States: 2008, Census Bureau, 2009 (180 million) (43 million) (46.3 million) (27 million)

8 But Most of the Money Comes from the Public Sector Private Insurance 34% Out of pocket 12% Other private funds (charity, etc.) 7% State and Local Government (existing Medicaid, other) 13% Federal Government (existing Medicare, Medicaid, other) 34% Source: Health Affairs, Feb. 2008; data for 2006

9 OBAMA’S FATEFUL CHOICE He wanted to “build on what works” He had two fundamental choices: 1) to build on the public sector (Medicare); or 2) to build on the private sector He chose to try to reach universal coverage by expanding private insurance

10 Progress(?) of US Health Reform Employer mandate Public option** Individual mandate* * “each eligible individual must enroll in an applicable health plan for the individual and must pay any premium required with respect to such enrollment.” (S.1775) ** “you can choose to enroll in the new public plan” Medicare ?? National Health Insurance

11 Everyone required to have insurance Employers must offer insurance or contribute Continued reliance on private insurance, with the option of a public plan “You can keep what you have” No regulation of insurance company premiums, deductibles, co-pays, or payment and denial practices Increases the system cost by hundreds of billions of dollars No cost savings or realistic way to control costs No change in the structure of health care finance The Mandate Model

12 The Congressional Plan New requirements for “qualified plans”  higher premiums Employment-based insurance unchanged -- Employers can change coverage and plan -- Insurers can change provider networks Employees must accept employer plan Starting in 2013, the uninsured and small employers can access an insurance “exchange” Subsidies (“affordability credits”) in the exchange up to 400% of the Federal poverty level Public plan available in the exchange only “Hardship waiver” for those who can’t afford premiums Expand Medicaid eligibility to all below 133% poverty

13 What Happened to the Public Plan? The Original “robust” Plan (“Medicare for Everyone Who Wants It”) Open enrollment Medicare-like, backed by the Federal Government 119 million members (Lewin) The Congressional Plan Restricted enrollment (only the uninsured) Self-sustaining, follow same rules as private insurers Perhaps 10 million members (3% of population) The 800-pound gorilla has turned into a mouse!

14 What Will Insurance Cost? In Massachusetts, Insurance Still Costly and Care Unaffordable Family Characteristics Annual Income Annual Cost Deductible* 30-year old individual $32,496 or more $2,650 $2,000 30-yr old couple w/2 children $66,156 or more $9,429 $3,500 55-year old couple $43,716 or more $11,289 $4,000 * Also physician & hospital co-pays Source: (Boston Area, Sept 2009)

15 How Will the Plan be Paid For? Why are Government funds needed? To subsidize the purchase of private insurance by low-income people To pay for Medicaid expansions Where will those funds come from? Taxes on employment-based insurance Reductions in Medicare reimbursements Cut subsidies to Medicare Advantage plans Reduced waste and fraud in Medicare and Medicaid

16 How Much is Needed? The plan assumes added costs =< $1 Trillion over seven years or $130 billion/yr (5% of current health care spending) Number of Uninsured Remaining: 17-25 million [ Source: Congressional Budget Office] Number of Underinsured: 50 million+ Even a Trillion dollars is not enough! Total cost of making health care affordable: $200-300 billion/year

17 What Will Control Costs under the Congressional Plan? Nothing in the Plan directly contains costs. Instead, it relies on: Competition among insurance companies Computerization Chronic disease management Payment reforms (e.g., medical home, “bundling”) Reducing waste and abuse “We do not see the sort of fundamental changes that would be necessary to reduce federal health spending by a significant amount” --Douglas Elmendorf, Dir, Congressional Budget Office

18 The Bottom Line on the Plan If it does pass in some form, it would: Make the world’s most expensive system even more costly Not achieve universal coverage Not make affordable insurance available Leave millions underinsured Not control the continuing growth in cost Why? Because it doesn’t really change the way we pay for health care.

19 Way Too Hard cartoon

20 The Public Route to Real Health Care Reform: Conyers’ Expanded and Improved Medicare for All HR 676 All private insurance and Medicaid replaced with Improved Medicare Everyone covered via automatic enrollment Comprehensive benefits Free choice of doctor and hospital Doctors and hospitals remain independent Financed through progressive taxes Costs no more than we are now spending

21 Sanders (& McDermott): American Health Security Act S 703 (HR 1200) 1.Automatic enrollment 2.Comprehensive benefits 3.Operated by States using Federal standards 4.Free choice of doctor and hospital 5.Doctors and hospitals remain independent 6.Public agency processes and pays bills 7.Financed through payroll taxes

22 Billing and Insurance: Nearly 30% of All Health Care Spending 28%

23 Covering Everyone with No Additional Spending Additional costs Covering the uninsured and poorly-insured +6.4% Elimination of cost-sharing and co-pays +5.1% Savings Reduced hospital administrative costs -1.9% Reduced physician office costs -3.6% Reduced insurance administrative costs -5.3% Bulk purchasing of drugs & equipment -2.8% Primary care emphasis & reduce fraud -2.2% Source: Health Care for All Californians Plan, Lewin Group, January 2005 134 107 241 -21 -76 -111 -59 -46 -313 $ B Total Costs +11.5% Total Savings -15.8% Net Savings - 4.3% - 73

24 How Single Payer Could Be Paid For: One Example from a Recent Study of a California Plan

25 Single payer offers real tools to contain costs Budgeting, especially for hospitals Capital investment planning Emphasis on primary care, coordination of care, and alternative ways of paying for services Bulk purchasing

26 CONCLUSIONS A system based in private insurance plans -- will not lead to universal coverage -- will not create affordable insurance A Medicare for All System -- can provide comprehensive services -- it will cost no more than we spend now -- can control costs going into the future If a mandate plan is passed, the problems of the health care system will not go away. Real health care reform will continue to be essential.

27 We Can’t Wait Another 16 Years! We Need Real Health Care Reform Before the Premium Takes All our Income! Source: American Family Physician, November 14, 2005 Today

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