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Team 9 US Health Care

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Illya Chen

The document discusses major problems facing the US health care system and reforms under the Patient Protection and Affordable Care Act (ACA). It notes that prior to the ACA, nearly 50 million Americans were uninsured, costs were rising faster than other countries, and government programs like Medicare and Medicaid accounted for over half of all health care spending. The ACA aims to expand coverage, eliminate limits on plans, cover pre-existing conditions, and create health insurance marketplaces or exchanges. However, shortfalls remain like individuals and businesses still preferring lower costs. Recommendations include raising penalties in the individual mandate and making the exchanges function more like a real market.

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US Health Care What are the major problems facing the market and how is Patient Protection and Affordable Care Act trying to reform it? Actuarial Practice Presentation: Team 9 (Aayush Rai, Tien Hoong Soh, Yiqing Chen, Lingzhi Zhan, Lim Wise, Yijing Feng) 1
Overview 2
Stakeholders What is Health Insurance? Provider EmployerLife Sciences Organisation Payer Consumer 3
Not for Profit Hospitals 58% Government Hospitals 21% For Profit Hospitals 21% Who provides the Health Care? Providers take care of individuals. They are reimbursed for their services by private insurers and the government. 4 Source: Kaiser Report, 2011
Employer- sponsored 55% Private 10% Medicare 15% Medicaid 16% Military Health Insurance 4% Where does the Insurance come from? As per the US Census Bureau, 49.9 million residents, 16.3% of the population, were uninsured in 2010. 5 Source: US Census Bureau, 2011
Challenges Pre Obamacare 6
Driver of inequality in the United States 7 Source: OECD, Brookings Institute 2013 3.2 7.2 4.1 13.6 4.5 8.3 5.4 16.7 Aggregate health care spending (%GDP) 2000 2008 Finland South Korea USASingapore
Uninsured Americans (millions) 34.7 38.4 50.7 0 10 20 30 40 50 1990 2000 2009 Households are priced out of the market 8 Source: US Census Bureau, 2011
Defence 21% Discretionary 17% Other Mandatory 13% Net Interest 6% Medicare & Medicaid 23% Social Security 22% U.S budget 2012 (% Total budget) Others 39% Medicare & Medicaid 31% Social Security 29% Projected U.S budget 2024 (% Total budget) Diminishing revenue raising capabilities 9 Source: Congressional Budget Office Projection, 2013
Reforms 10
What are Medicare and Medicaid? Law ties reimbursement and readmission rates Tax reforms Medicare 58% Medicaid 31% Others* 11% 2013 Federal costs on Health Care Others*- Military Health Sys.; Childrens Health Ins.; Veterans Health Admin. Cost 11 Source: Congressional Budget Office Projections, 2013
End to limits on plans Coverage for pre-existing conditions Young Adult Coverage Free Preventive Services Create a new marketplace - Exchange Encourage employers to provide coverage Access 12
Shortfalls 13
Individuals and companies prefer to pay less Individual Mandate Employer Mandate Competitive disadvantage for businesses Penalties might be insufficient 2014 1.0% of income or $95 per person 2015 2.0% of income or $325 per person 2016 onwards 2.5% of income or $695 per person and adjusted for inflation 14 Source: US Internal Revenue Service (IRS), 2013
Recommendations 15
Raise individual penalties Make it a real market Health care supermarkets Federalisation of state-built exchanges Voucher system Increase disposable income Instil discipline 16
Conclusion 17
Enacted in 2010 Achievements Shortfalls Improvements 570 580 635 696 725 787 819 854 943 570 571 617 652 675 732 748 771 845 500 550 600 650 700 750 800 850 900 950 1000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MedicareSpending(in$Billions) PPACA effect on Medicare Spending, 2010-2019 Projections without reform Projections with reform 18 Source: L. Nemani, Medicare: An Insight, 2012
References Stakeholders: https://www.nfib.com/cribsheets/individual-mandate/ Hospitals by ownership type: http://kff.org/other/state-indicator/hospitals-by-ownership/#table Insurance sponsorship: http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2012/Table8.pdf OECD Nations Healthcare Spending: http://www.oecd.org/statistics/datalab/health.htm Singapore Healthcare Spending: http://www.brookings.edu/blogs/up-front/posts/2013/05/06-singapore-health-care-system-haseltine Congressional Budget Office Data and Projections: http://www.cbo.gov/publication/42905 Federal cost on health care: http://www.usfederalbudget.us/federal_budget_estimate_vs_actual_2013_XXbs1n_10#usgs302 Penalties on individual mandate: https://www.nfib.com/cribsheets/individual-mandate/ Income, Poverty, and Health Insurance Coverage 2012: http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2012/index.html Medicare: An Insight, Patient Protection Affordable Care Act (PPACA) Provisions, Inherent Challenges and Critical Success Factors: http://www.corporatewellnessmagazine.com/article/medicare-an-insight-patient-protection-affordable-care-act-ppaca-provisions-inherent- challenges-and-critical-success-factors.html 19
Thank you! Q&A? 20

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Team 9 US Health Care

  • 1. US Health Care What are the major problems facing the market and how is Patient Protection and Affordable Care Act trying to reform it? Actuarial Practice Presentation: Team 9 (Aayush Rai, Tien Hoong Soh, Yiqing Chen, Lingzhi Zhan, Lim Wise, Yijing Feng) 1
  • 3. Stakeholders What is Health Insurance? Provider EmployerLife Sciences Organisation Payer Consumer 3
  • 4. Not for Profit Hospitals 58% Government Hospitals 21% For Profit Hospitals 21% Who provides the Health Care? Providers take care of individuals. They are reimbursed for their services by private insurers and the government. 4 Source: Kaiser Report, 2011
  • 5. Employer- sponsored 55% Private 10% Medicare 15% Medicaid 16% Military Health Insurance 4% Where does the Insurance come from? As per the US Census Bureau, 49.9 million residents, 16.3% of the population, were uninsured in 2010. 5 Source: US Census Bureau, 2011
  • 7. Driver of inequality in the United States 7 Source: OECD, Brookings Institute 2013 3.2 7.2 4.1 13.6 4.5 8.3 5.4 16.7 Aggregate health care spending (%GDP) 2000 2008 Finland South Korea USASingapore
  • 8. Uninsured Americans (millions) 34.7 38.4 50.7 0 10 20 30 40 50 1990 2000 2009 Households are priced out of the market 8 Source: US Census Bureau, 2011
  • 9. Defence 21% Discretionary 17% Other Mandatory 13% Net Interest 6% Medicare & Medicaid 23% Social Security 22% U.S budget 2012 (% Total budget) Others 39% Medicare & Medicaid 31% Social Security 29% Projected U.S budget 2024 (% Total budget) Diminishing revenue raising capabilities 9 Source: Congressional Budget Office Projection, 2013
  • 11. What are Medicare and Medicaid? Law ties reimbursement and readmission rates Tax reforms Medicare 58% Medicaid 31% Others* 11% 2013 Federal costs on Health Care Others*- Military Health Sys.; Childrens Health Ins.; Veterans Health Admin. Cost 11 Source: Congressional Budget Office Projections, 2013
  • 12. End to limits on plans Coverage for pre-existing conditions Young Adult Coverage Free Preventive Services Create a new marketplace - Exchange Encourage employers to provide coverage Access 12
  • 14. Individuals and companies prefer to pay less Individual Mandate Employer Mandate Competitive disadvantage for businesses Penalties might be insufficient 2014 1.0% of income or $95 per person 2015 2.0% of income or $325 per person 2016 onwards 2.5% of income or $695 per person and adjusted for inflation 14 Source: US Internal Revenue Service (IRS), 2013
  • 16. Raise individual penalties Make it a real market Health care supermarkets Federalisation of state-built exchanges Voucher system Increase disposable income Instil discipline 16
  • 18. Enacted in 2010 Achievements Shortfalls Improvements 570 580 635 696 725 787 819 854 943 570 571 617 652 675 732 748 771 845 500 550 600 650 700 750 800 850 900 950 1000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 MedicareSpending(in$Billions) PPACA effect on Medicare Spending, 2010-2019 Projections without reform Projections with reform 18 Source: L. Nemani, Medicare: An Insight, 2012
  • 19. References Stakeholders: https://www.nfib.com/cribsheets/individual-mandate/ Hospitals by ownership type: http://kff.org/other/state-indicator/hospitals-by-ownership/#table Insurance sponsorship: http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2012/Table8.pdf OECD Nations Healthcare Spending: http://www.oecd.org/statistics/datalab/health.htm Singapore Healthcare Spending: http://www.brookings.edu/blogs/up-front/posts/2013/05/06-singapore-health-care-system-haseltine Congressional Budget Office Data and Projections: http://www.cbo.gov/publication/42905 Federal cost on health care: http://www.usfederalbudget.us/federal_budget_estimate_vs_actual_2013_XXbs1n_10#usgs302 Penalties on individual mandate: https://www.nfib.com/cribsheets/individual-mandate/ Income, Poverty, and Health Insurance Coverage 2012: http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2012/index.html Medicare: An Insight, Patient Protection Affordable Care Act (PPACA) Provisions, Inherent Challenges and Critical Success Factors: http://www.corporatewellnessmagazine.com/article/medicare-an-insight-patient-protection-affordable-care-act-ppaca-provisions-inherent- challenges-and-critical-success-factors.html 19