The Affordable Care Act (Obamacare) and the Single Payer Alternative Leonard Rodberg Professor and Chair, Urban Studies Department, Queens College and.

The Affordable Care Act (Obamacare)

and the Single Payer Alternative

Leonard Rodberg

Professor and Chair, Urban Studies Department, Queens College

andResearch Director, NY Metro Chapter,

Physicians for a National Health Program

November 2015

The Affordable Care Act 2010“A f***** big deal” – Joe Biden

Yes, more people have insurance

…and Millions Are Still Uninsured Millions

Note: The uninsured include about 5 million undocumented immigrants. Source: Congressional Budget Office.

51 51 51 52 53 53 5451

2323232328

35

50 50

0

20

40

60

80

2012 2013 2014 2015 2016 2017 2018 2019

Pre-ACA ACA (Projected)

* Estimate is statistically different from estimate for the previous year shown (p<.05).

SOURCE: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2014.

Why Health Care Was On the Agenda: Escalating Cost

…and costs are still out of control

While…• Millions still have no coverage.• High deductibles and co-pays keep those

with coverage from actually using it.• Billing-related administrative waste still

consumes 20-30% of our health care dollar.

What the Affordable Care Act (Obamacare) Did:

It established the principle that the federal government has the responsibility to see that everyone has access to health care.

What It Didn’t Do:It failed to achieve either cost control or universal access.

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USFRSWIZGERCANNETHNZDENSWEUKNORAUS

Total health expenditures as percent of GDP

Source: OECD Health Data 2010 (Oct. 2010).

It doesn’t have to be this way. Every other country covers all their citizens,

and spends half of what we do.

What Makes the Difference?Unlike in the US -- in these countries

government has a central role in• Funding the system• Overseeing and regulating it.

Our own Medicare program for seniors shows the benefits of a government-funded, regulated system • Reliable financing• Slower cost growth• Transparent coverage decisions.

Most Americans Get Their Coverage from the Private Sector…

Medicare

Medicaid

Military

Uninsured

Individual Private

Insurance

Employer-based Private

Insurance

Source: Health Insurance Coverage in the United States: 2013, Census Bureau, 2014

(169.0 million)

(49.0 million)

(54.1 million)

(42.0 million)

(34.5 million)

(14.1 million)

State and Local Govt (existing Medicaid, other)

13%Other private funds (charity, etc.)7%

Federal tax subsidy9%

Private Insurance25% Federal Government

(existing Medicare, Medicaid, other)

34%

Out-of-pocket12%

But Most of the Money Comes from the Public Sector

Out of pocket 12%

Other private funds (charity, etc.) 7%

State and Local Government(existing Medicaid, other) 13%

Federal Government(existing Medicare, Medicaid, other) 34%

Source: Health Affairs, Feb. 2010; data for 2009

Private Insurance 34%

(Federal tax subsidy)

In Deciding on a Plan,the President Made a Fateful Choice• He could have chosen to

(1) build on the public sector, which now

provides more than half the money, or

(2) expand the private sector.• He chose to build his program by

(1) enlarging Medicaid for the poor, and

(2) expanding private insurance for the rest of us

The New Reform Plan: Affordable Care Act (ACA)

• Continued reliance on private insurance• Employment-based insurance unchanged • Market competition determines

premiums, co-pays, and deductibles• Experimental pilot programs try to

reduce costsResult: About 10% of the population will

get covered, the rest will see little change.

• Starting in 2014, online insurance “marketplaces” offer private insurance to individuals and employers

• Citizens and legal immigrants required to purchase private insurance or sign up for Medicaid.

• Premium subsidies up to 400% poverty level • Medicaid for all below 138% poverty level• “Hardship waiver” if premium too expensive

can remain uninsured!

Affordable Care Act or ACA:The Health Reform Law of the Land

Underinsurance is Now the Norm

What’s Covered

… and Costs Keep On Rising

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

ACA (CMS Actuary)

Current projection

ACA (Commonwealth Fund)

National Health Expenditures (trillions)

Notes: * Modified current projection estimates national health spending when corrected to reflect underutilization of services by previously uninsured. Source: D. M. Cutler, K. Davis, and K. Stremikis, Why Health Reform Will Bend the Cost Curve, Center for American Progress and The Commonwealth Fund, December 2009. Estimated Financial Effects of PPACA as Amended, Richard Foster, CMS Actuary, April 2010

$4.67$4.5

6.4% annual growth

6.6% annual growth

6.0% annual growth

$4.7

National Health Expenditures as Percent of GDP 17.8 17.9 18.0 18.2 18.8 19.3 19.8 20.2 20.5 21.0

Principal Consequences

• Little change for most people

• Those using the marketplaces face costly premiums, deductibles and copays and limited choice of doctors and hospitals

• Millions remain uninsured and underinsured

• Costs continue to rise

How Canadians Get Health Care• Provinces pay for all health care, with

federal government contributing a “single payer” system• No co-pays or deductibles• Doctors bill the province once a month• Hospitals receive an annual budget• Funded through federal and provincial

taxesResult: 100% of the population covered,

spend 10% of GDP on health care

The Public Route to Health Care Reform: Conyers’ Expanded and Improved Medicare for All Single Payer HR 676

• Extend Medicare to cover everyone• Comprehensive benefits, free choice of provider• No cost-sharing (no deductibles, no co-pays)• Public agency pays the bills• Funded through progressive taxes• Costs no more than we are now spending

Single PayerReform in New York State: Gottfried-Perkins

New York Health BillUniversal coverage: everybody in, nobody out!

• Comprehensive benefits• No co-pays or deductibles • Free choice of doctor and hospital• All payments from a single state fund• Covering everyone while spending less

Who Would Be Eligible?• Every resident of New York State• No barriers due to age, sex, income,

employment, or health status• No premiums• No co-pays• No deductibles

New York Health #1

Comprehensive Benefits• Primary and preventive care• Inpatient and outpatient hospital care• Care coordinator assists in navigating the

system, receiving necessary care• Prescription drugs• Dental, vision, & hearing care• Free choice of doctor, including primary

care physician & specialists, and hospital

New York Health #2

New York Health #3

Who Will Run It?• Administered by NYS Dept of Health• Overseen by broadly-representative Board of Trustees including consumers and providers

How Will It Be Paid For?• Insurance premiums eliminated• Graduated payroll assessment, 80%/20% paid

by employer/employee• Graduated assessment on upper-bracket non-

wage income (dividends, rents, capital gains)• Federal funds from Medicare, Medicaid, ACA

(needs Federal waiver in 2017) • All funds placed in NY Health Trust Fund

New York Health #4

Medical Care Administration

9%

Insurer Billing8%

Other Insurer Costs and Profit

11%

Hospital Billing4%

Medical Care64%

Physician Billing 5%

Source: James G. Kahn et al, The Cost of Health Insurance Administration in California: Estimates for Insurers, Physicians, and Hospitals, Health Affairs, 2005

Allocation of Spending for Hospital and Physician Care Paid through Private Insurers

Big Savings from Unified System:Billing and insurance overhead now

consume nearly 30 cents of every dollar

28%

Spending throughprivate insurers

Covering Everyone while Saving Money!

Additional costs

Covering the uninsured and poorly-insured +1.4%

Elimination of cost-sharing and co-pays +3.9%

Enhanced Medicare & Medicaid fees +3.8%

Savings

Reduced insurance administrative costs -9.9%

Reduced physician & hospital admin costs -7.2%

Bulk purchasing of drugs & devices -5.7%

Reduced fraud -1.9%

Source: Economic Analysis of the NY Health Act, Gerald Friedman, April 2015

4.011.210.826.0 -28.6

-20.7

-16.3

- 5.4 -71.0

2019 $B

Total Costs +9.1%

Total Savings -24.7% Net Savings -15.6% - 45

How to Pay for It

Nearly Everyone Would Save Money

Mexican Universal Health Care

https://www.youtube.com/v/N938k6lIugY