Types of Rx Drug Plans - Public Health Alliance of Colorado

							Health Care Costs
and the Long-Term
Fiscal Imbalance
Colorado Human Services Directors
           Association
          June 6, 2012
Overview

 The Federal Budget and Healthcare
  Costs
 The Affordable Care Act

 Reform Proposals

 What’s Coming Up




                                 2
Growth of Government
                                                                                               Federal Spending &
                                                                                           the Political Party in Power
                                      $3,500
                                                                 Democratic Controlled Congress                                                 Republican Controlled Congress                                                                              Patient Protection and
                                                                                                                                                                                                                                                            Affordable Care
                                                                 Split Congress                                                                 Republican President                                                                                        Act of 2010
                                                                                                                                                                                                                                              America Recovery and
                                                                 Democratic President                                                                                                                                                         Reinvestment Act of 2009
                                      $3,000
                                                                                                                                                                                                                              Medicare Prescription Drug,
                                                                                                                                                                                                                              Improvement, and Modernization Act
                                                                                                                                                                                                                              of 2003and the Invasion of Iraq
                                                                                                                                                                   End of Statutory Budget Controls 2002
                                      $2,500
  Billions of Constant 2005 Dollars




                                                                                                                                                                                         Deficit Reduction
                                                                                                                                                                                         Act of 1993
                                                                                                                                                                                                                         2001 Invasion
                                                                                                                                                                                  Budget Enforcement                     of Afghanistan
                                      $2,000                                                                                                                                      Act of 1990

                                                                                                                                             Gramm-Rudman-Hollings
                                                                                                                                             Balanced Budget and Emergency
                                                                                                                                             Deficit Control Act of 1985
                                      $1,500

                                                      End of WWII                                 Social Security Act of 1965
                                                                                                  (Medicare)
                                      $1,000
                                                                Korean Conflict            Vietnam Conflict
                                                                1950-53                    1960-75


                                       $500



                                         $0
                                               1945

                                                        1947

                                                               1949

                                                                      1951

                                                                             1953

                                                                                    1955

                                                                                           1957

                                                                                                   1959

                                                                                                          1961

                                                                                                                 1963

                                                                                                                        1965

                                                                                                                               1967

                                                                                                                                      1969

                                                                                                                                             1971

                                                                                                                                                    1973

                                                                                                                                                            1975

                                                                                                                                                                    1977

                                                                                                                                                                           1979

                                                                                                                                                                                  1981

                                                                                                                                                                                           1983

                                                                                                                                                                                                  1985

                                                                                                                                                                                                         1987

                                                                                                                                                                                                                1989

                                                                                                                                                                                                                       1991

                                                                                                                                                                                                                              1993

                                                                                                                                                                                                                                     1995

                                                                                                                                                                                                                                            1997

                                                                                                                                                                                                                                                   1999

                                                                                                                                                                                                                                                          2001

                                                                                                                                                                                                                                                                 2003

                                                                                                                                                                                                                                                                        2005

                                                                                                                                                                                                                                                                               2007

                                                                                                                                                                                                                                                                                      2009
                                                                                                                                                           Fiscal Years
Source: OMB, Budget, Historical Tables, Table 1.3—Summary of Receipts, Outlays, and Surpluses or Deficits (−) in Current Dollars,
Constant (FY 2005) Dollars, and as Percentages of GDP: 1940–2016
                    Composition of Federal Spending
                         (% of Total Outlays)
      Defense                                      Other Discretionary                         Medicare and Medicaid
      Social Security                              Other Mandatory                             Net Interest

                        7%                                                                    6%
                                                                                                          20%
          12%                                                                12%



                                                       42%


   15%
                                                                      20%
                                                                                                                19%

          4%


                          20%                                                                  23%

                         1970                                                                  2010
Source: CBO, Budget and Economic Outlook: Fiscal Years 2011 Through 2021, Historical Tables
Our Fiscal Future
 Variations in Healthcare
 Spending
Chart 1: Medicare Spending per Beneficiary, by Hospital Referral Region, 2006




                                                                                               National Average = $8,304
                                                                                                   < $7,000
                                                                                                   $7,000 – $7,500
                                                                                                   $7,500 – $8,000
                                                                                                   $8,000 – $9,000
                                                                                                   > $9,000
                                                                                                   Not populated


      Source: The Dartmouth Atlas of Health Care. (2009). The Policy Implications of Variations in Medicare
      Spending Growth. Link: http://www.dartmouthatlas.org/atlases/Policy_Implications_Brief_022709.pdf.
      Note: Data adjusted for age, race, and sex but not price. Category definitions as in source document.
The ACA Dominos …

                       GI and
                     Community
                       Rating

    Cost cuts,
    Prevention,                  Mandates
   Workforce, etc.




          Exchanges          Subsidies


                                            8
            Impact of ACA on Insurance
            Coverage
                                 Pre-ACA   2016   2022
Pre-ACA          Medicaid/CHIP     34      32     32
                 Employer          153     159    162
                 Non-group         24      28     30
                 Uninsured         53      56     54
                 Total             267     273    282
Post-ACA (+/-)   Medicaid/CHIP             17     17
                 Employer                   -4     -3
                 Non-group                  -2     -3
                 Exchanges                 20     22
                 Uninsured                 -30    -33
# of Uninsured                    55m      26m    27m
% of Eligible                     81%      93%    93%
Comparison of Pre and Post
ACA Premium Contributions*
60.0%

50.0%

40.0%

30.0%
                                           Pre-ACA
20.0%                                      Post-ACA
10.0%

0.0%




        *As % of Income for Single Adult      10
Status of ACA
Implementation



Immediate    Delivery    Coverage
 Benefits    Reforms    Expansions
  2010      2011-2014   2014-2017




                              11
Simpson-Bowles Plan

                            Discretionary
                           Spending Caps




                                               Tax Reform to
    Social Security                            Reduce Rates
      Solvency                                    & Raise
                                                 Revenue




              Additional                 Long-term
              Mandatory                 Medicare “Doc
               Savings                   Fix” & IPAB



                                                               12
The Ryan Budget



• Medicare Premium
                                     Taxes          • Social Security
  Support                                             Reforms
• Medicaid Block           • Eliminate Corporate    • Discretionary
  Grants                     Tax                      Spending Caps
• Individual Tax Credits   • Eliminate Deductions
                           • Lower Rates

      Healthcare                                              Other




                                                                        13
       Key Medicaid Reform
       Proposals
             Proposal               Simpson-   White   Rep.    CBO
                                     Bowles    House   Ryan   Options
Global cap on Medicaid spending        √                √
growth/Block Grants
Reform/reduce FMAP formula                       √              √

Reduce cap on State Medicaid           √         √
provider fees
Increase reliance on managed care      √                √
in Medicaid
Permit reductions in Medicaid                           √
eligibility thresholds


Expedite Medicaid waiver process       √
The “Fiscal Cliff”

                    -$607 Billion in 2013
                                        Bush Tax Cuts &
                                        AMT
             $123                       Payroll Tax

 $11                        $221        Other Tax Extenders
       $26
                                        Sequester
 $65
                                        Unemployment
              $65                       Benefits
                      $95
                                        Medicare Payments


                                                     15
The Next Six Months


                         Sequester
          Expiring
         Tax Cuts,
            etc.


                     Debt Limit
                       Vote




         25 Day Lame Duck
              Session

                                     16
    THANK YOU

          Billy Wynne
Senior Vice President & Principal
   Health Policy Source, Inc.
bwynne@healthpolicysource.com