The Implications of Health Care Reform

8/9/2019 The Implications of Health Care Reform

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The Implications of HealthThe Implications of Health

Care ReformCare ReformJames P Brown, MDJames P Brown, MD


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BasicsBasics

By 2014, no pre-existing conditions areBy 2014, no pre-existing conditions areallowedallowed

Insurance premium rates may only varyInsurance premium rates may only varyby: Individual vs family, age of insured(notby: Individual vs family, age of insured(not>3:1), tobacco use(not>1.5:1) and rating>3:1), tobacco use(not>1.5:1) and ratingarea(established by state or HHS,area(established by state or HHS,

reflecting relative risk in an area).reflecting relative risk in an area).


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BasicsBasics

Wellness: premium discount forWellness: premium discount forenrollment in and achieving goals of HHSenrollment in and achieving goals of HHSprograms that monitor your progressprograms that monitor your progress

towards a healthier lifestyle. Notowards a healthier lifestyle. Nospecification on penalty for noncompliancespecification on penalty for noncompliance

You can keep your plan, but only if itYou can keep your plan, but only if it

conforms to these standards by 2014conforms to these standards by 2014


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Qualified Health PlanQualified Health Plan

Essential services are: Ambulatory care, ER,Essential services are: Ambulatory care, ER,

Inpatient Care, Maternity/Well Baby Care,Inpatient Care, Maternity/Well Baby Care,

Pediatrics(includes oral and vision), MentalPediatrics(includes oral and vision), Mental

Health/Substance Abuse, RehabilitationHealth/Substance Abuse, RehabilitationServices and Devices, Laboratory Services andServices and Devices, Laboratory Services andPrevention/Wellness/Chronic DiseasePrevention/Wellness/Chronic Disease

ManagementManagement

Deductible is


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Qualified Health PlanQualified Health Plan

Coverage Levels-determined by HHSCoverage Levels-determined by HHSUses Actuarial Value-cost of essentialUses Actuarial Value-cost of essential

health benefits provided to a samplehealth benefits provided to a sample

population. This value(x) becomes yourpopulation. This value(x) becomes yourannual limitationannual limitation

Bronze Level-60% of xBronze Level-60% of x

Silver Level-70% of xSilver Level-70% of xGold Level-80% of xGold Level-80% of xPlatinum Level 90% of xPlatinum Level 90% of x


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Abortion CoverageAbortion Coverage

Plans allow for public, but not Federal, funding ofPlans allow for public, but not Federal, funding ofabortion. A plan covering abortion and a planabortion. A plan covering abortion and a planthat does not cover abortion is required at eachthat does not cover abortion is required at eachcoverage levelcoverage level

HHS determines the amount of money neededHHS determines the amount of money neededto potentially provide every enrollee in a givento potentially provide every enrollee in a givenplan with abortion services. The insurer mustplan with abortion services. The insurer mustset aside that money in a separate, abortionset aside that money in a separate, abortion

services account. This money is supposed toservices account. This money is supposed tocome from premiums, not Federal funds. Ofcome from premiums, not Federal funds. Ofcourse, Federal funds are used for everythingcourse, Federal funds are used for everythingelse, so it becomes a semantic shell game.else, so it becomes a semantic shell game.


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American Health Benefit ExchangeAmerican Health Benefit Exchange

Will offer acceptable Health Plans by 2014Will offer acceptable Health Plans by 2014 Plans will be rated at each coverage levelPlans will be rated at each coverage level Rating is on basis of quality and priceRating is on basis of quality and price

Quality is determined by HHS. It requires use ofQuality is determined by HHS. It requires use ofEvidence-Based Medicine(algorithms), use ofEvidence-Based Medicine(algorithms), use ofMedical Home Model, decreased HospitalMedical Home Model, decreased Hospitalreadmissions and promotion of Wellnessreadmissions and promotion of WellnessProgramsPrograms

Ratings and prices will be posted online, as willRatings and prices will be posted online, as willthe names of the Hospitals and Providers, whothe names of the Hospitals and Providers, whowill also have a ratingwill also have a rating


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Consumer Operated and OrientedConsumer Operated and Oriented

Plans(CO-OPS)Plans(CO-OPS)Groups of small businesses and/orGroups of small businesses and/or

individuals that combine their premiums toindividuals that combine their premiums toform a larger risk pool for insuranceform a larger risk pool for insurance

Prevents very small businesses andPrevents very small businesses andindividuals from being wiped out byindividuals from being wiped out bycatastrophic events, and allows greatercatastrophic events, and allows greater

bargaining power with insurersbargaining power with insurers


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Community HealthCare OptionCommunity HealthCare Option

Offers Essential Benefits onlyOffers Essential Benefits only

If this becomes insolvent, refunding issuesIf this becomes insolvent, refunding issues

are not addressed until the next yearsare not addressed until the next yearsbudget.budget.

Yay! A whole new version of MedicaidYay! A whole new version of Medicaidthat is even more financially unstablethat is even more financially unstable


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BasicsBasics

States may arrange Health Care CompactsStates may arrange Health Care Compactsbetween states, or nationwide, that allows for anbetween states, or nationwide, that allows for aninsurance plan across state lines. The rules ofinsurance plan across state lines. The rules ofthe plan are subject to the laws of the statethe plan are subject to the laws of the state

where it is originally written. HHS must ok allwhere it is originally written. HHS must ok allcompactscompacts Individual Mandate-arrives in 2014, everyoneIndividual Mandate-arrives in 2014, everyone

must be insured, it will appear on your tax form.must be insured, it will appear on your tax form.The penalty is $695 or 2.5% of your income,The penalty is $695 or 2.5% of your income,whichever is greater. It says the mandate iswhichever is greater. It says the mandate is

justified on the basis of being vital to commercejustified on the basis of being vital to commerceand the economy. What will SOTUS say?and the economy. What will SOTUS say?


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The Medical Home ModelThe Medical Home Model

All non-acute medical care will occur atAll non-acute medical care will occur athome. Hospitals and others will set uphome. Hospitals and others will set upacceptable organizations to deliver careacceptable organizations to deliver care

at home, teach caregivers how to care forat home, teach caregivers how to care forpatients, and be available at night for help.patients, and be available at night for help.

This may or may not be run by MDs, andThis may or may not be run by MDs, and

the type and amount of treatment providedthe type and amount of treatment providedwill be determined by HHSwill be determined by HHS


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Medical SchoolsMedical Schools

More training in diversity, cultural competenceMore training in diversity, cultural competenceand heritage literacyand heritage literacy

More spots allowed for underserved minoritiesMore spots allowed for underserved minorities

Emphasis on primary care, rural careEmphasis on primary care, rural care Public Health track in medical school where, inPublic Health track in medical school where, in

exchange for subsidies, the Surgeon Generalexchange for subsidies, the Surgeon Generaldetermines your residency.determines your residency.

Unused residency spots will be redistributed asUnused residency spots will be redistributed asprimary care spots. There is a clear bias againstprimary care spots. There is a clear bias againstspecialists(unless, of course, you need one)specialists(unless, of course, you need one)


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OverviewOverview

Everyone needs insurance, and each plan is designedEveryone needs insurance, and each plan is designedaround stealth rationingaround stealth rationing

Wellness will be used to penalize all who dont conformWellness will be used to penalize all who dont conform Evidence-Based Medicine uses computer-basedEvidence-Based Medicine uses computer-based

algorithms to attempt to reduce complex problems intoalgorithms to attempt to reduce complex problems intosimple if-then statements. These are the guidelines. Ifsimple if-then statements. These are the guidelines. Ifthey are not followed, then the doctor will be paid lessthey are not followed, then the doctor will be paid lessand his/her rating will suffer because of a lack ofand his/her rating will suffer because of a lack ofQuality. This is where your health care will be rationed,Quality. This is where your health care will be rationed,at a level where only your doctor would know that, beforeat a level where only your doctor would know that, before

the guidelines, you were eligible for A,B and C. But now,the guidelines, you were eligible for A,B and C. But now,only A and B are available for you. Incidentally, if thereonly A and B are available for you. Incidentally, if thereis a lawsuit, the Feds will say that these are onlyis a lawsuit, the Feds will say that these are onlyguidelines. Who wants to practice this kind of medicine?guidelines. Who wants to practice this kind of medicine?


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2010-It Begins2010-It Begins

HHS provides a $5billion high-risk pool forHHS provides a $5billion high-risk pool foruninsured patients with pre-existinguninsured patients with pre-existingconditionsconditions

10% tax on indoor tanning salons-7/110% tax on indoor tanning salons-7/1Dependents to stay on parents ins. to 26Dependents to stay on parents ins. to 26Small Business Tax Credit-Govt will paySmall Business Tax Credit-Govt will pay

up to 35% of employers contribution toup to 35% of employers contribution topurchasing health insurance for newpurchasing health insurance for newemployeesemployees


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20102010

Medicare cuts to inpatient PsychiatricMedicare cuts to inpatient PsychiatricHospitalsHospitals

Elimination of Specialist ReimbursementElimination of Specialist Reimbursement

for Consultationfor ConsultationHHS begins cuts on overvalued medicalHHS begins cuts on overvalued medical

servicesservices

HHS publicly reports hospital-acquiredHHS publicly reports hospital-acquiredconditions and establishes Medicalconditions and establishes MedicalReimbursement Data CentersReimbursement Data Centers


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2011-It Worsens2011-It Worsens

$250 reimbursement to Medicare Part D beneficiaries$250 reimbursement to Medicare Part D beneficiarieswhose benefits run out-this is a one-time paymentwhose benefits run out-this is a one-time payment

Employers must disclose the value of the benefitEmployers must disclose the value of the benefitprovided by the employer for the employees healthprovided by the employer for the employees healthcoverage on the W-2 formcoverage on the W-2 form

Medicare Advantage cuts beginMedicare Advantage cuts begin Cant use HSA, FSA, HRA or MSA for OTC prescriptionsCant use HSA, FSA, HRA or MSA for OTC prescriptions Wealthier seniors(85K/170K) pay higher premiums, notWealthier seniors(85K/170K) pay higher premiums, not

indexed to inflationindexed to inflation

Medicare cuts for reimbursement for seniors usingMedicare cuts for reimbursement for seniors usingAdvanced Imaging(CT/MRI)Advanced Imaging(CT/MRI) Seniors cant purchase power wheelchairs unless theySeniors cant purchase power wheelchairs unless they

rent first for 13 monthsrent first for 13 months


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20112011

11 Billion over 5 years for Community11 Billion over 5 years for CommunityHealth CentersHealth Centers

Medicare cuts to Nursing Homes, Long-Medicare cuts to Nursing Homes, Long-term Hospitals and Inpatient Rehabilitationterm Hospitals and Inpatient Rehabilitation

10% Medicare bonus for Primary Care10% Medicare bonus for Primary CarePhysicians and General SurgeonsPhysicians and General Surgeons


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2012-An Election Year2012-An Election Year

Medicare cuts to Hospice, Dialysis and InpatientMedicare cuts to Hospice, Dialysis and InpatientPsychiatric CarePsychiatric Care

Medicare will decrease spending by switching to anMedicare will decrease spending by switching to anHMO called an Accountable Care Organization(groupsHMO called an Accountable Care Organization(groupsof hospital, doctors, nurses and ancillary care personnelof hospital, doctors, nurses and ancillary care personnelthat will bid competitively to provide care. Thisthat will bid competitively to provide care. Thisessentially requires physicians to be employed byessentially requires physicians to be employed byhospitals)hospitals)

MD Compare website set up to compare physicians byMD Compare website set up to compare physicians byreadmission rates, quality standards, averagereadmission rates, quality standards, average

reimbursement and cost-effectivenessreimbursement and cost-effectiveness HHS sets up hospital pay-for-quality program and beginsHHS sets up hospital pay-for-quality program and begins

a value-based MD modifier for reimbursementa value-based MD modifier for reimbursement


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2013-The Death of Private Practice2013-The Death of Private Practice

of Medicine in Americaof Medicine in America Payments to Hospitals, physicians, nurses and ancillaryPayments to Hospitals, physicians, nurses and ancillary

personnel bundled as one payment to Hospital(requirespersonnel bundled as one payment to Hospital(requiresuniversal physician employment and likely unionization)universal physician employment and likely unionization)

Medicare Wage Tax increases 0.9% if earn 200K/250KMedicare Wage Tax increases 0.9% if earn 200K/250K

3.8% Medicare Tax on unearned, non-active business3.8% Medicare Tax on unearned, non-active businessincome if earn 200/250Kincome if earn 200/250K

Threshold for deduction of Medical Expenses as % ofThreshold for deduction of Medical Expenses as % ofincome is raised from 7.5 to 10%income is raised from 7.5 to 10%

Co-ops beginCo-ops begin Tax on Medical Device Manufacturers beginsTax on Medical Device Manufacturers begins Makers of drugs, devices and biologicals must report onMakers of drugs, devices and biologicals must report on

transfer of value to MDs, groups and teaching hospitalstransfer of value to MDs, groups and teaching hospitals


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20142014

Noninsurance Penalty beginsNoninsurance Penalty begins Exchanges in placeExchanges in place Insurers must cover everyone with no pre-Insurers must cover everyone with no pre-

existing conditionsexisting conditions Independent Medicare Advisory Board formsIndependent Medicare Advisory Board forms

and makes recommendations to decreaseand makes recommendations to decreaseMedicare costsMedicare costs

More Medicare cuts to Home HealthMore Medicare cuts to Home Health All private insurance plans are taxed(if they goAll private insurance plans are taxed(if they go

bankrupt, here comes the Public Option)bankrupt, here comes the Public Option)


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2015-Had Enough Yet2015-Had Enough Yet

More Medicare cuts to Home HealthMore Medicare cuts to Home Health

IPAB starts to decrease Medicare costs(byIPAB starts to decrease Medicare costs(byrationing)rationing)

Disproportionate Share MedicareDisproportionate Share Medicarepayments(to hospitals that accept a lot ofpayments(to hospitals that accept a lot ofpublic aid and charity cases) arepublic aid and charity cases) aredecreaseddecreased


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20162016

States can set up Interstate InsuranceStates can set up Interstate InsurancePlans if HHS approvesPlans if HHS approves


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20172017

Pay-for-quality program for all physicansPay-for-quality program for all physicans


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20182018

Cadillac Tax on high-cost plans-40% taxCadillac Tax on high-cost plans-40% taxon benefits above:10,200 for individuals,on benefits above:10,200 for individuals,and 27,500 for families or individuals whoand 27,500 for families or individuals who

are in a unionare in a union


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SummarySummary

Insurance companies likely forced out ofInsurance companies likely forced out ofthe Health Insurance Business within 5-8the Health Insurance Business within 5-8yearsyears

Medicare will be an HMOMedicare will be an HMO

Physicians will be unionized employeesPhysicians will be unionized employees

Non-acute care will occur at home, andNon-acute care will occur at home, andwill be provided by nurses and Physicianwill be provided by nurses and Physician

AssistantsAssistants


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Now What?Now What?

Nothing is inevitableNothing is inevitable

The Founders gave us ballot boxes toThe Founders gave us ballot boxes toconquer tyrannyconquer tyranny

DefundDefund

RepealRepeal

Real ReformReal Reform

Documents

The Implications of Health Care Reform