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Joseph R. AntosWilson H. Taylor Scholar in Health Care and Retirement PolicyAmerican Enterprise Institute
Health Reform: Déjà Vu All Over Again?
Health Care Forecast Conference
University of California, Irvine
February 25, 2010
And speaking of vu…
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Growing problem of obesity
House
7/14 – TriComm – 1,018 pages
10/29 – HR 3962 – 1,990 pages
11/7 – Engrossed bill – 2,016 pages
Senate
6/9 – HELP – 615 pages
10/19 – SFC – 1,502 pages
11/18 – Reid HR 3590 – 2,074 pages
12/24 – Engrossed bill – 2,409 pages
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So many pages, so little time
Perfectibility of regulation— if not of man
Attempt to solve every conceivable problem
Solution Problem Solution …
But the bills are incomplete
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Scores of new advisory and regulatory bodies
Obama plan continues this strategy
Conflicting policy objectives
Expand insurance coverage—cut the deficit
Expand benefits—lower costs
Allow everyone to keep what they have—change what insurance is required to do
Promote choice—keep most people in ESI
Lower premiums—eliminate underwriting
Cut Medicare payments—maintain program benefits
Promote economic growth—tax business
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Building blocks of House, Senate bills
Health insurance exchange
Insurance regulation
Mandates
Subsidies
Medicare cuts
Tax increases
Earmarks
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Broad similarities
Big money Coverage: House $891 B, Senate $871 B Medicare cuts: H $453 B, S $438 B Taxes1: H $806 B, S $638 B
Big regulation Mandates – individual and employer Guaranteed issue, no pre-ex, no rescissions, rating bands,
minimum benefit package, medical loss ratio Insurance exchanges Tax credits, Medicaid expansion “Nice” ideas: ACOs, medical home, bundled payment,
prevention, CER, quality measures, fraud/abuse, FOBs, etc.
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1Excludes tax credits which reduce net revenue: H $25 B, S $140 B
Major disagreements
Millionaire’s tax vs. Cadillac tax H: 5.4% surcharge, income>$1 M (joint)
– $460.5 B S: 40% excise tax, coverage>$8,500/$23,000
– $148.9 B, supplemented by add’l 0.9% HI payroll tax on wages>$250,000 (joint) ($86.8 B), insurer fee ($59.6 B), Pharma fee ($22.2 B), others
National vs. state-level insurance exchange
Public option vs. none
Permanent fix, SGR vs. none H: $209 B—but hidden in separate bill
Part D donut hole phase-out vs. one-time fill-in H: Rx discount + duals rebate; S: Discount + $500 reduction
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Other differences
2:1 Age rating 3:1
No Young invincibles Yes
2.5% of AGI in 2013 Individual penalty $750 in 2016
Payroll tax 2-8% Employer penalty $3000/employee getting tax credit
Greater for income<300% FPL
Individual subsidy Greater for income 300-400% FPL
To 150% FPL Medicaid expansion To 133% FPL
No Medicare commission Yes
Non-health $43.1B Taxes Tanning $2.7B
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Why the stalemate?
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The Republicans are our opposition. The Senate is our enemy. Rep. Anthony Weiner (D-N.Y.), January 27 after SOTU