M2.4 - Health Reform in the United States

health reform

• there have been numerous health reform attempts in the U.S.

  • prior to 2010, all attempts at national health reform to create universal or near-universal coverage have failed

  • some successes at the state level

difficulty of reform in the U.S.

• individualistic culture

• dislike of big government

• lack of consensus

• federal system rules and structure make it difficult to achieve major reform

• states generally home to social welfare issues

• powerful interest groups against national health reform

• path dependency

key failed attempts at national health reform

• 1912 Progressive Party candidate Teddy Rosevelt supported social insurance platform that included health insurance

• 1915 American Association for Labor Legislation proposal for working class health insurance

• President Truman supported national health reform upon taking office, won re-election on national health insurance platform in 1948

• President Nixon initial health reform proposal in 1969 and revised proposal in 1972

• President Clinton Health Security Act in 1993

the patient protection and affordable care act (PPACA)

• why did the affordable care act pass when so many prior attempts had failed?

  • commitment and leadership

  • learned lessons from past failures

  • political pragmatism

  • “a reasonable and logical way of doing things or of thinking about problems that is based on dealing with specific situations instead of an ideas and theories”

the PPACA

• four key provisions

  • individual mandate (repealed, Dec 2017)

  • employer mandate

  • health insurance exchange

  • expansion of medicaid

the affordable care act (ACA)

• individual mandate

• controversy

• repealed effective Jan 1, 2019

• employer mandate

• state health insurance exchanges/marketplaces

• private insurance market changes

• medicaid expansion

individual mandate

• most people have to purchase health insurance or pay a penalty starting in 2014

• exemptions for certain populations and based on affordability

controversy

• too much government interference in private lives?

• constitutional?

employer mandate

• employers with 50 or more employees must provide affordable health insurance or pay a penalty

  • insurance is affordable if it has an actuarial value of at least 60% or is not more than 9.5% of an employee’s income

  • penalty is per employee after first 30 employees

state health insurance exchanges/marketplaces

• american health benefit exchanges for individuals

• small business health options program for small businesses

• must offer essential health benefits

• four cost levels for plans based on actuarial value

  • bronze, silver, gold, platinum

essential health benefits

• ambulatory patient services

• emergency services

• hospitalization

• maternity and newborn care

• mental health and substance use disorder services, including behavioral health treatment

• prescription drugs

• rehabilitative and habilitative services and devices

• laboratory services

• preventive and wellness services and chronic disease management

• pediatric services, including oral and vision care

private insurance market changes

• no pre-existing condition exclusion

• dependent coverage to age 26

• preventive services without cost sharing

• prohibitions against lifetime and annual coverage limits

• no rescission without fraud

• new appeals process

• premium rate reviews

• guaranteed issue and renewability

• rate variation limits

• essential health benefits

• wellness plans

• some plans may be grandfathered in and not subject to all of these changes

medicaid expansion

• some states have expanded their Medicaid programs to cover all people with household incomes below a certain level. others haven’t

  • in all states: Medicaid qualification based on income, household size, disability, family status, and other factors. eligibility rules differ between states

  • in states that have expanded Medicaid coverage: may qualify based on income alone. qualify if household income is below 133% of the federal poverty level. a few states use a different income limit.

premium and cost sharing subsidies (FYI)

• premium tax credits available for individuals who purchase insurance in an exchange and have income between 133%-400% of poverty

• cost sharing subsidies available for individuals who purchase insurance in an exchange and have income up to 250% of poverty

• to qualify, must be a US citizen or legal resident, not eligible for any type of public insurance, and not have access to employer-sponsored insurance

other financing health reform

• changes to medicare provider reimbursement

• changes to medicare advantage reimbursement

• medicare part A increases for high earners

• changes in medicare part D subsidies

• changes in medicare employer subsidy

• changes in disproportionate share payments

• increase medicaid prescription drug rebate paid by manufacturers

• income tax code changes

• health industry fees

• tax on high cost health insurance plans