The Implications of Health The Implications of Health Care ReformCare Reform

James P Brown, MDJames P Brown, MD

BasicsBasics

By 2014, no pre-existing conditions are By 2014, no pre-existing conditions are allowedallowed

Insurance premium rates may only vary Insurance premium rates may only vary by: Individual vs family, age of insured(not by: 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 rating area(established by state or HHS, area(established by state or HHS, reflecting relative risk in an area).reflecting relative risk in an area).

BasicsBasics

Wellness: premium discount for Wellness: premium discount for enrollment in and achieving goals of HHS enrollment in and achieving goals of HHS programs that monitor your progress programs that monitor your progress towards a healthier lifestyle. No towards a healthier lifestyle. No specification on penalty for noncompliancespecification on penalty for noncompliance

You can keep your plan, but only if it You can keep your plan, but only if it conforms to these standards by 2014conforms to these standards by 2014

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), Mental Pediatrics(includes oral and vision), Mental Health/Substance Abuse, Rehabilitation Health/Substance Abuse, Rehabilitation Services and Devices, Laboratory Services and Services and Devices, Laboratory Services and Prevention/Wellness/Chronic Disease Prevention/Wellness/Chronic Disease ManagementManagement

Deductible is <$2000/individual and <$4000 for Deductible is <$2000/individual and <$4000 for any other planany other plan

Qualified Health PlanQualified Health Plan

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

health benefits provided to a sample health benefits provided to a sample population. This value(x) becomes your population. This value(x) becomes your annual limitationannual limitation

Bronze Level-60% of xBronze Level-60% of xSilver Level-70% of xSilver Level-70% of xGold Level-80% of xGold Level-80% of xPlatinum Level 90% of xPlatinum Level 90% of x

Abortion CoverageAbortion Coverage Plans allow for public, but not Federal, funding of Plans allow for public, but not Federal, funding of

abortion. A plan covering abortion and a plan abortion. A plan covering abortion and a plan that does not cover abortion is required at each that does not cover abortion is required at each coverage levelcoverage level

HHS determines the amount of money needed HHS determines the amount of money needed to potentially provide every enrollee in a given to potentially provide every enrollee in a given plan with abortion services. The insurer must plan with abortion services. The insurer must set aside that money in a separate, abortion set aside that money in a separate, abortion services account. This money is supposed to services account. This money is supposed to come from premiums, not Federal funds. Of come from premiums, not Federal funds. Of course, Federal funds are used for everything course, Federal funds are used for everything else, so it becomes a semantic shell game.else, so it becomes a semantic shell game.

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 of Quality is determined by HHS. It requires use of

Evidence-Based Medicine(algorithms), use of Evidence-Based Medicine(algorithms), use of Medical Home Model, decreased Hospital Medical Home Model, decreased Hospital readmissions and promotion of Wellness readmissions and promotion of Wellness ProgramsPrograms

Ratings and prices will be posted online, as will Ratings and prices will be posted online, as will the names of the Hospitals and Providers, who the names of the Hospitals and Providers, who will also have a ratingwill also have a rating

Consumer Operated and Oriented Consumer Operated and Oriented Plans(CO-OPS)Plans(CO-OPS)

Groups of small businesses and/or Groups of small businesses and/or individuals that combine their premiums to individuals that combine their premiums to form a larger risk pool for insuranceform a larger risk pool for insurance

Prevents very small businesses and Prevents very small businesses and individuals from being wiped out by individuals from being wiped out by catastrophic events, and allows greater catastrophic events, and allows greater bargaining power with insurersbargaining power with insurers

Community HealthCare OptionCommunity HealthCare Option

Offers Essential Benefits onlyOffers Essential Benefits only If this becomes insolvent, refunding issues If this becomes insolvent, refunding issues

are not addressed until the next year’s are not addressed until the next year’s budget.budget.

Yay! A whole new version of Medicaid Yay! A whole new version of Medicaid that is even more financially unstablethat is even more financially unstable

BasicsBasics States may arrange Health Care Compacts States may arrange Health Care Compacts

between states, or nationwide, that allows for an between states, or nationwide, that allows for an insurance plan across state lines. The rules of insurance plan across state lines. The rules of the plan are subject to the laws of the state the plan are subject to the laws of the state where it is originally written. HHS must ok all where it is originally written. HHS must ok all compactscompacts

Individual Mandate-arrives in 2014, everyone Individual 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 is whichever is greater. It says the mandate is justified on the basis of being vital to commerce justified on the basis of being vital to commerce and the economy. What will SOTUS say?and the economy. What will SOTUS say?

The Medical Home ModelThe Medical Home Model

All non-acute medical care will occur at All non-acute medical care will occur at home. Hospitals and others will set up home. Hospitals and others will set up “acceptable” organizations to deliver care “acceptable” organizations to deliver care at home, teach caregivers how to care for at home, teach caregivers how to care for patients, and be available at night for help. patients, and be available at night for help. This may or may not be run by MD’s, and This may or may not be run by MD’s, and the type and amount of treatment provided the type and amount of treatment provided will be determined by HHSwill be determined by HHS

Medical SchoolsMedical Schools

More training in diversity, cultural competence More training in diversity, cultural competence and “heritage literacy”and “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, in Public Health track in medical school where, in

exchange for subsidies, the Surgeon General exchange for subsidies, the Surgeon General determines your residency.determines your residency.

Unused residency spots will be redistributed as Unused residency spots will be redistributed as primary care spots. There is a clear bias against primary care spots. There is a clear bias against specialists(unless, of course, you need one)specialists(unless, of course, you need one)

OverviewOverview Everyone needs insurance, and each plan is designed Everyone needs insurance, and each plan is designed

around stealth rationingaround stealth rationing Wellness will be used to penalize all who don’t conformWellness will be used to penalize all who don’t conform Evidence-Based Medicine uses computer-based Evidence-Based Medicine uses computer-based

algorithms to attempt to reduce complex problems into algorithms to attempt to reduce complex problems into simple if-then statements. These are the guidelines. If simple if-then statements. These are the guidelines. If they are not followed, then the doctor will be paid less they are not followed, then the doctor will be paid less and his/her rating will suffer because of a lack of and his/her rating will suffer because of a lack of “Quality.” 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, before at 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 there only A and B are available for you. Incidentally, if there is a lawsuit, the Feds will say that these are only is a lawsuit, the Feds will say that these are only guidelines. Who wants to practice this kind of medicine?guidelines. Who wants to practice this kind of medicine?

2010-It Begins2010-It Begins

HHS provides a $5billion high-risk pool for HHS provides a $5billion high-risk pool for uninsured patients with pre-existing uninsured patients with pre-existing conditionsconditions

10% tax on indoor tanning salons-7/110% tax on indoor tanning salons-7/1Dependents to stay on parent’s ins. to 26Dependents to stay on parent’s ins. to 26Small Business Tax Credit-Gov’t will pay Small Business Tax Credit-Gov’t will pay

up to 35% of employer’s contribution to up to 35% of employer’s contribution to purchasing health insurance for new purchasing health insurance for new employeesemployees

20102010

Medicare cuts to inpatient Psychiatric Medicare cuts to inpatient Psychiatric HospitalsHospitals

Elimination of Specialist Reimbursement Elimination of Specialist Reimbursement for Consultationfor Consultation

HHS begins cuts on overvalued medical HHS begins cuts on overvalued medical servicesservices

HHS publicly reports hospital-acquired HHS publicly reports hospital-acquired conditions and establishes Medical conditions and establishes Medical Reimbursement Data CentersReimbursement Data Centers

2011-It Worsens2011-It Worsens $250 reimbursement to Medicare Part D beneficiaries $250 reimbursement to Medicare Part D beneficiaries

whose 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 benefit Employers must disclose the value of the benefit

provided by the employer for the employees health provided by the employer for the employees health coverage on the W-2 formcoverage on the W-2 form

Medicare Advantage cuts begin Medicare Advantage cuts begin Can’t use HSA, FSA, HRA or MSA for OTC prescriptionsCan’t use HSA, FSA, HRA or MSA for OTC prescriptions Wealthier seniors(85K/170K) pay higher premiums, not Wealthier seniors(85K/170K) pay higher premiums, not

indexed to inflationindexed to inflation Medicare cuts for reimbursement for seniors using Medicare cuts for reimbursement for seniors using

Advanced Imaging(CT/MRI)Advanced Imaging(CT/MRI) Seniors can’t purchase power wheelchairs unless they Seniors can’t purchase power wheelchairs unless they

rent first for 13 monthsrent first for 13 months

20112011

11 Billion over 5 years for Community 11 Billion over 5 years for Community Health 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 Care 10% Medicare bonus for Primary Care Physicians and General SurgeonsPhysicians and General Surgeons

2012-An Election Year2012-An Election Year Medicare cuts to Hospice, Dialysis and Inpatient Medicare cuts to Hospice, Dialysis and Inpatient

Psychiatric CarePsychiatric Care Medicare will decrease spending by switching to an Medicare will decrease spending by switching to an

HMO called an Accountable Care Organization(groups HMO called an Accountable Care Organization(groups of hospital, doctors, nurses and ancillary care personnel of hospital, doctors, nurses and ancillary care personnel that will bid competitively to provide care. This that will bid competitively to provide care. This essentially requires physicians to be employed by essentially requires physicians to be employed by hospitals)hospitals)

MD Compare website set up to compare physicians by MD Compare website set up to compare physicians by readmission rates, quality standards, average readmission rates, quality standards, average reimbursement and cost-effectivenessreimbursement and cost-effectiveness

HHS sets up hospital pay-for-quality program and begins HHS sets up hospital pay-for-quality program and begins a value-based MD modifier for reimbursement a value-based MD modifier for reimbursement

2013-The Death of Private Practice 2013-The Death of Private Practice of Medicine in Americaof Medicine in America

Payments to Hospitals, physicians, nurses and ancillary Payments to Hospitals, physicians, nurses and ancillary personnel bundled as one payment to Hospital(requires personnel bundled as one payment to Hospital(requires universal 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 business 3.8% Medicare Tax on unearned, non-active business

income if earn 200/250Kincome if earn 200/250K Threshold for deduction of Medical Expenses as % of Threshold for deduction of Medical Expenses as % of

income 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 on Makers of drugs, devices and biologicals must report on

transfer of value to MD’s, groups and teaching hospitalstransfer of value to MD’s, groups and teaching hospitals

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 forms Independent Medicare Advisory Board forms

and makes recommendations to decrease and makes recommendations to decrease Medicare costsMedicare costs

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

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

2015-Had Enough Yet2015-Had Enough Yet

More Medicare cuts to Home HealthMore Medicare cuts to Home Health IPAB starts to decrease Medicare costs(by IPAB starts to decrease Medicare costs(by

rationing)rationing)Disproportionate Share Medicare Disproportionate Share Medicare

payments(to hospitals that accept a lot of payments(to hospitals that accept a lot of public aid and charity cases) are public aid and charity cases) are decreaseddecreased

20162016

States can set up Interstate Insurance States can set up Interstate Insurance Plans if HHS approvesPlans if HHS approves

20172017

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

20182018

Cadillac Tax on high-cost plans-40% tax Cadillac Tax on high-cost plans-40% tax on benefits above:10,200 for individuals, on benefits above:10,200 for individuals, and 27,500 for families or individuals who and 27,500 for families or individuals who are in a unionare in a union

SummarySummary

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

Medicare will be an HMOMedicare will be an HMOPhysicians will be unionized employeesPhysicians will be unionized employeesNon-acute care will occur at home, and Non-acute care will occur at home, and

will be provided by nurses and Physician will be provided by nurses and Physician AssistantsAssistants

Now What?Now What?

Nothing is inevitableNothing is inevitableThe Founders gave us ballot boxes to The Founders gave us ballot boxes to

conquer tyranny conquer tyranny DefundDefundRepealRepealReal ReformReal Reform