Call it Health Reform 101.
Two University of Minnesota health-policy experts today translated federal health-care reform efforts for the state Senate Health and Human Services Budget Division.
If you’re trying to figure out the key provisions of proposed federal legislation and their pros and cons, these easily digestible presentations are for you.
First, a caution from presenter Lynn Blewett, director of the State Health Access Data Assistance Center at the U: “As we go through this, there’s a lot of devil in the details, and there aren’t a lot of details in the bills.”
You can see Blewett’s slide show, “Update on National Health Reform: A Moving Target,” below.
‘Tackling the Tough Topics’
The other presenter was Jean Marie Abraham, who recently returned to the U after a year as senior economist on health care for the president’s Council of Economic Advisers. Her slide show, “Tackling the Tough Topics: The public plan option, employer pay or play, and paying for health care reform,” can be viewed below.
“All of the bills have an insurance exchange, all have an individual mandate, all have guaranteed issue, and all have premium subsidies,” Blewett said.
Two of the three main bills have a public insurance option and an employer mandate. It’s important to note, she said, that Senate Finance Committee Chairman Max Baucus’ draft proposal lacks the employer mandate and public option and his committee has control over financing for the Senate bill containing those provisions.
“There are 46 million uninsured, and even with these access expansions there’s still going to be a significant number of uninsured,” Blewett noted. The Kennedy bill in the Senate would reduce the number to 36 million, and the House Tri-Committee bill to 17 million. No estimate is available for the Baucus draft legislation.
Without reform 53 million could be uninsured in 10 years
But if no health reform is enacted, 53 million Americans could be uninsured by 2019 according to Congressional Budget Office projects, said Blewett, whose center calculates uninsured rates in Minnesota.
In explaining the differences between a public option, an insurance exchange and a “pay or play” employer mandate, Abraham cited a few issues that arose for the Council of Economic Advisers. One is how workers’ compensation would be affected if they’re offered choices through their employer plan and an insurance exchange.
Another is how an employer might behave with the “pay or play” incentive in an employer mandate and the availability of generous subsidies through an insurance exchange. “A savvy HR manager might ask whether … a firm can lower its compensation costs and make workers better off, and the firm better off, while dropping employer-sponsored insurance and paying the penalty,” she said.
Employer incentive dynamics
While there’s not enough research to “model the overall impact of employer dropping,” she said, “the incentive to drop employer-sponsored insurance will increase as the generosity of the subsidy increases and the pay or play tax decreases.”
There are two rationales behind a public insurance option, which seems to be in one day and out the next in national reform discussions, Abraham said. “The first is to increase consumer choice. If one does polling of voters, individuals for the most part are not particularly pleased with private health insurance. … The second, perhaps more economically important rationale, is it has the potential to drive down costs” of administration and providers.
“Proponents of a public option argue that it may help to deal with some of the issues arising as a result of increased concentration of market powers by insurers and physician groups in metro areas,” she said. “We’ve seen this in the past decade. In many local markets, insurers have tremendous market power. A study by the AMA [American Medical Association] found that 76 percent of 313 MSAs had at least one insurer with more than 50 percent of market share.”