Health Reform: Where we are now. Impact on Pharma. Medicaid and Government Pricing Congress May 15, 2013 Grace-Marie Turner Galen Institute
Nov 22, 2014
Health Reform: Where we are now.Impact on Pharma.
Medicaid and Government Pricing Congress
May 15, 2013Grace-Marie Turner
Galen Institute
Americans agreed on goals for health reform
The U.S. needs health reform to:– make coverage more affordable– assure quality, and– expand access to insurance
Most people rate their own coverage as good or excellent
They want stability. Change was for others.
www.galen.org
But many say the ACA changes too much
40% view the law unfavorably
35% of Americans now view the Affordable Care Act favorably
Cost continues to be the biggest concern
www.galen.org
Kaiser Health Tracking Poll, April 2013 http://kff.org/health-reform/poll-finding/kaiser-health-tracking-poll-april-2013/
The Red Tape Tower
Source: Sarah Kliff, “Is ObamaCare too much work for the Obama administration?” The Washington Post, November 12, 2012, http://www.washingtonpost.com/blogs/wonkblog/wp/2012/11/12/is-obamacare-too-much-work-for-the-obama-administration/.
An ACA State Exchange
NOTE: Don’t know/Refused answers not shown.SOURCE: Kaiser Family Foundation Health Tracking Poll (conducted March 5-10, 2013)
Majority Say They Don’t Understand How ACA Will Impact Them, Including Two-Thirds
of Uninsured and Low-IncomeDo you feel you have enough information about the health reform law to understand how it will impact you personally, or not?
Household income less than $40,000
Uninsured (under age 65)
Total
30%
33%
41%
68%
67%
57%
Yes, have enough information No, do not have enough information
Source: Avik Roy, “Fact-Checking the Obama Campaign's Defense of its $716 Billion Cut to Medicare,” Forbes: The Apothecary, August 16, 2012, http://www.forbes.com/sites/aroy/2012/08/16/fact-checking-the-obama-campaigns-defense-of-its-716-billion-cut-to-medicare/.
The health law in one graph
Source: “Health Reform Poses Biggest Challenges to Companies with the Most Part-Time and Low-Paid Employees,” Mercer LLC, August 8, 2012, http://www.mercer.com/press-releases/1472805.
Employers implementing workforce changesw Mercer study on what employers expect
Employers and health coverage
1. Employers with <50 FTE EE’s have no 3k/2k penalty
2. But employers offering qualified and affordable coverage may actually be hurting their employees
Example
Generous Subsidies in ExchangesExamples:
A person earning $42,000 a year with a family of 4 qualifies for $14,759 in new health insurance subsidies
A single person earning $20,600 qualifies for $5,156 in new health insurance subsidies
But only if employer doesn’t offer coverage or if it’s not “affordable” (ie costs >9.5% of income)
www.galen.org
Cost of Insurance, Family of 4
Impact of new rating rules
James T. O’Connor, Milliman, for America’s Health Insurance Plans. Comprehensive Assessment of ACA Factors That Will Affect Individual Market Premiums in 2014. http://www.ahip.org/MillimanReportACA2013/ Accessed 4-26-13
How to qualify for subsidies
Source: Sen. John Cornyn, Facebook, March 22, 2013, http://www.facebook.com/photo.php?fbid=10151499130834424&set=a.112318184423.92543.75755694423&type=3&l=83fcd3ca01&permPage=1
www.galen.org
Medicaid and the states
Health Insurance Coverage ofthe Nonelderly Population, 2011
266.4 Million
SOURCE: KCMU/Urban Institute analysis of 2012 ASEC Supplement to the CPS.
Private Non-group
5.7%
Source: Avalere State Reform Insights, Updated April 22, 2013
*AR is proposing to use Medicaid funds to pay for premium assistance through exchanges, pending federal approval;
TN has indicated interest in expansion
Key issues facing Pharma
Medicaid expansion
Drug rebates expanded to Duals
Success of coordinated care for duals
Supply chain integrity
Accountable Care Organizations
Drug benefits in the new Exchanges
Government’s ability to pay its bills
www.galen.org
Source: Kaiser Family Foundation. www.kff.org
SOURCE: Kaiser Family Foundation analysis of the Bureau of Labor Statistics Consumer Expenditure Survey Interview and Expense Files, 2002-2009, “Health Care on a Budget, The Financial Burden of Health Spending by Medicare Households, An Updated Analysis of Health Care Spending as a Share of Total Household Spending,” June 2011.
Health Insurance Spending
Prescription Drug Spending
Average Health Insurance and Prescription Drug Spending As a Share of Total
Household Spending by Medicare Households, 2002-2009
Part D: Many see it as a model
The Congressional Budget Office said that spending for the prescription drug benefit declined by nearly 40% compared to initial estimates of its 10-year cost
It is saving seniors money as well. The average monthly drug premium is about $30, far below the $53 forecast originally.
Federal spending as a % GDP
www.galen.org
Some realities:
States have a big role
Seeking ways improve their markets
Enhanced competition and more choices of affordable coverage
Medicaid expansion or other state-based options such as Florida Health Choice Plus
ACA implementation
www.galen.org
What we know for sure
• CHOICE: Americans value innovation, diversity and choice to accommodate 300 million people
• VALUE IN HEALTH SPENDING: Break down payment silos to realize the promise of personalized medicine and achieve cost saving
• FOCUS ON THE PATIENT: Doctors and patients, not government, should make health care decisions
A market-based solution“Defined contributions” for health coverage
A system that puts doctors and patients in charge of medical decisions
Slowing spending while preserving choice and quality
Restructuring financing for a 21st century health sector
• Medicare
• Medicaid
• Private Insurance
www.galen.org
Health insurance market
2013 questions
Will Exchanges be ready by Oct 1?
Will there be bi-partisan support for delay?
Will people enroll after they see the cost?
Will the number of uninsured be higher as people understand guaranteed issue?
Will private exchanges fill a market need?
www.galen.org
The future?The global move toward consumerism is real, driven by greater patient demand for more control over decisions.
People will seek more affordable options outside the ACA’s centralized control.
Grace-Marie Turner
Galen Institute
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