Colorado
Health Care
Reform:
The Path
Ahead
Senator Irene Aguilar, MD
Where we’ve been
Distribution of Health Plan Enrollment for Covered Workers,
by Plan Type, 1988-2011
1%
1%
1%
1%
* Distribution is statistically different from the previous year shown (p<.05). No statistical tests were conducted for
years prior to 1999. No statistical tests are conducted between 2005 and 2006 due to the addition of HDHP/SO as a
new plan type in 2006.
Note: Information was not obtained for POS plans in 1988. A portion of the change in plan type enrollment for 2005
is likely attributable to incorporating more recent Census Bureau estimates of the number of state and local
government workers and removing federal workers from the weights. See the Survey Design and Methods section
from the 2005 Kaiser/HRET Survey of Employer-Sponsored Health Benefits for additional information.
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011; KPMG Survey of EmployerSponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), 1988.
Average Annual Premiums for Single and Family
Coverage, 1999-2011
* Estimate is statistically different from estimate for the previous year shown (p<.05).
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2011.
2012 Federal Poverty Levels
Family
Size
1
Parents
60% FPL
$ 6702
Children
Expanded
100% FPL
133% FPL
$11,170
2
$ 9078
3
$14,856
SCHIP
225%
$25,133
400%
PPACA
$44,680
$15,130
$20,123
$34,033
$60,520
$11,454
$19,090
$25,390
$42,953
$76,360
4
$13,830
$23,050
$30,657
$51,863
$92,200
5
$16,206
$27,010
$35,923
$60,773
108,040
6
$18,582
$30,970
$41,190
$69,683
123,880
2011: 48.6 Million Uninsured
Government
Insurance
4 Million
2011 Colorado:
829,180 uninsured
CO Medicaid =
560,722
16% of population
CHP + = 69,008
Colorado: Only 57.6% Adequately Insured
Impact of the Recession on
Colorado Medicaid
FY20072008
FY20082009
FY20092010
FY20102011
Colorado
Medicaid
Colorado
CHP+
Total
391,962
59,365
451,327
436,812
63,247
500,059
498,797
70,285
569,082
560,722
69,008
629,730
40%
Colorado Department of Health Care Policy & Financing
FY2011-12 Medical Premiums Expenditure and Caseload Report, August 2011
Where we’re going
PATIENT PROTECTION AND
AFFORDABLE CARE ACT
2010
Prohibited Rescission
Prohibited denial of coverage to children with
pre-existing conditions
Eliminated lifetime limits on coverage
Required Free Preventive Care
Allowed children under 26 to stay on parents’
plans
PATIENT PROTECTION AND
AFFORDABLE CARE ACT
2010
Small Business Health Insurance Tax Credits
Medicare donut hole rebate of $250
Pre-existing Condition Insurance Plan (Getting
US Covered) for uninsured
Required insurance companies to justify
premium increases
Strengthened Community Health Centers
PATIENT PROTECTION AND
AFFORDABLE CARE ACT
2011
Implemented Medical Loss Ratio of 80/85%
Prescription drug discounts for seniors
Free preventive care for seniors
Center for Medicaid & Medicare Innovation
Independent Payment Advisory Board
Community First Choice Program
PATIENT PROTECTION AND
AFFORDABLE CARE ACT
2012-2013
Value Based Purchasing in Medicare
Pilot Accountable Care Organizations
Streamline Administrative Function
Bundled Payments
Increase Medicaid payment for Primary Care
and preventive health services
PATIENT PROTECTION AND
AFFORDABLE CARE ACT
2014
 Prohibits discrimination due to pre-existing
conditions or gender
 Requires the purchase of Insurance (individual
mandate)
 Eliminate annual limits on insurance coverage
 Allows expansion of Medicaid to 133% FPL
 Premium Tax credits for 133 – 400% FPL
 Cost sharing subsidies for those at < 400% FPL
PATIENT PROTECTION AND
AFFORDABLE CARE ACT
2014 (continued)
Ensuring coverage for individuals participating
in clinical trials
Increasing small business tax credits
Establishing affordable Insurance Exchanges
2015
Paying physicians based on value, not volume
Colorado Health Benefit Exchange
Established by Senate Bill 11 - 200
9 voting members and 3 ex-officio members
10 member Legislative Health Benefit
Exchange Implementation Review Committee
Independent public entity
Charged with developing, governing &
operating the Colorado Health Benefit
Exchange for the Individual Market and Small
Business Health Options Program
Colorado Health Benefit Exchange
Bring together buyers and sellers of insurance
through a portal
Provide navigators to help consumers
Determine eligibility and cost for subsidized
and no-cost individuals
Review and approve insurance products
(Qualified Health Plans )
Essential health Benefits Plan
Colorado’s Next Steps:
1. Exchange “Go Live” date of October 2013
 Identify ways to prevent “gaming” of exchange
2. Expand Medicaid to 133% of FPL
 Identify ways to reduce Medicaid “churn”
3. Focus on Cost Control
→
No Reform
With ACA
ACA Impact
2,630,000
2,600,000
-30,000
Small Firm ESI (1-50 employees)
560,000
540,000
-20,000
Other ESI
2,070,000
2,060,000
-10,000
Unreformed Non-group
340,000
60,000
-280,000
Reformed Non-group
0
620,000
620,000
Tax Credit Recipients
0
470,000
470,000
Non-Recipients
0
150,000
150,000
Public Insurance
550,000
710,000
160,000
Uninsured
860,000
400,000
-460,000
Total
4,390,000
4,390,000
ESI
→
→
Table 2: Estimate of ACA Effect, 2016
Dr. Jonathan Gruber
9/16/11
Dr. Jonathan Gruber
9/16/11
Since 2006, the cost of the state’s insurance program
has increased by 42 percent, or almost $600 million.
According to an analysis by the Rand Corporation, “in
the absence of policy change, health care spending in
Massachusetts is projected to nearly double to $123
billion in 2020, increasing 8 percent faster than the
state’s gross domestic product (GDP).”
US v. Other G7 Countries
Canada
France
Germ.
Italy
Japan
UK
Avg
USA
MD visits
per capita
5.8
6.4
7.4
7.0*
13.6
5.1
7.6
3.8
Hosp discharges
per 100 pop
8.4
28.4
22.0
13.9
10.6*
12.6
16.0
12.6
Avg hospital
LOS
7.3
5.4
7.9
6.7
19.2
7.5
9.0
6.6
144.0
83.2
Hospital days per
100 population
HC spending
per capita (PPP)
$3,696
$3,423
$3,464
$2,673
$2,581
$2,885
$3,120 $6,933
HC spending
as % of GDP
10.0
11.2
10.5
9.0
8.1
8.5
9.6
15.8
LE at birth
80.7
80.7
79.8
81.2*
82.4
79.1*
80.7
78.1
Infant deaths per
1000 live births
5.0
3.8
3.8
3.7*
2.6
5.0
4.0
6.7
John A. Nyman, PhD
University of Minnesota
*
*
2006 data from the OECD website accessed 23 Sept 2009: http://stats.oecd.org/index.aspx
The spending per capita numbers were converted from the currency of the country to US dollars by a PPP index.
*2005 data
*
24
Health Care Expenditure per Capita
by Source of Funding, 2008
Dollars
8,000
7,538
7,000
912
Adjusted for Differences in Cost of Living
Out-of-pocket spending
Private spending
Public spending
6,000
5,003
5,000
3,119
4,627
756
4,079
35
4,000
1,424
3,000
467
3,737
3,696
487
273
548
600
616
382
3,540
3,470
489
543
60
86
3,353
605
484
2,000
3,129
347
197
2,683
154
4,213
3,507
2,736
2,863
2,869
2,875
2,991
2,841
2,263
1,000
2,585
372
2,158
0
US
NOR
SWIZ
CAN
* 2007.
Source: OECD Health Data 2010 (Oct. 2010).
GER
FR
DEN*
SWE
AUS*
UK
NZ
American Ingenuity at Work
Drug Prices for 30 Most Commonly
Prescribed Drugs, 2006–07
US is set at 1.0
1.00
1.0
0.77
0.8
0.76
0.63
0.6
0.51
0.49
0.45
0.44
0.4
0.34
0.2
0.0
US
Source: IMS Health.
CAN
GER
SWIZ
UK
AUS
NETH
FR
NZ
New Hampshire
Insurers Disparate Payments
What is the Price? Range for What Insurance
Pays to Health Care Provider Per Procedure
Colonoscopy
Mammogram
MRI (back)
(Outpatient)
Insurer A
1,353 - 4,611
227 - 881
645 - 2,790
Insurer B
1,270 - 3,121
161 - 564
640 – 2,292
1,195 - 3,524
129 - 612
732 - 2,659
Insurer C
Advanced
primary care
networks
Source: CMWF analysis of data retrieved October 2010 from:
http://www.nhhealthcost.org/costByProcedure.aspx
Variations Among Academic
Medical Centers
UCLA
CMS Inpatient
Quality Score
81.5
Mass
General
85.9
Mayo
Clinic
90.4
Source: Elliot Fisher, Dartmouth Medical School
Care Delivery & Spending, last 6 months of life
Total Medicare
Spending
$50,522
$40,181
$26,330
Hospital Days
Physician Visits
19.2
52.1
2.9
17.7
42.2
1.0
12.9
23.9
1.0
Specialist/
Primary Care
Ratio
Insurance company profits
First Half 2011
Aetna
11%
Cigna
7.4%
Wellpoint
7.8%
United
7.7%
In the first quarter of 2011, the combined profits of the
five companies which cover one-third of the U.S.
population, surged 14% to $3.6 billion.
If the trend holds, they'll earn a record $14.4 billion in
profits in 2011.
Research shows significant variation in
health care 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.
Massachusetts: Private, Medicare & Medicaid
Payment for Professional Procedures
Private Payer
Payment Variation
Min
Price
Max
Price
Office
Visit
$45
$330
MRI
Brain
$104
$646
Colonoscopy
$203
$1,045
Source: Massachusetts Division of Health Care Finance and Policy, Massachusetts Health Care Cost
Trends: Price Variation in Massachusetts Health Care Services, May 2011.
High U.S. Insurance Overhead:
Insurance-Related Administrative Costs
•
Fragmented payers + complexity = high
transaction costs and overhead costs
– McKinsey estimates adds
$90 billion per year*
•
Insurance and providers
– Variation in benefits; lack of
coherence in payment
– Time and people expense for
doctors/hospitals
$600
Spending on Health Insurance Administration
per Capita, 2007
$516
$500
$400
$300
$247
$220
$200
$198 $191
$140
$86
$100
$76
$0
US
FR
SWIZ
NETH
GER
CAN
* 2006
Source: 2009 OECD Health Data (June 2009).
* McKinsey Global Institute, Accounting for the Costs of U.S. Health Care: A New Look at Why Americans
Spend More (New York: McKinsey, Nov. 2008).
AUS*
OECD
Median
IOM: Best Care at Lower Cost
Paying for Health Care:
Insurance is the Wrong Model
 1913: Few received medical care
 Life Expectancy 59.7 years
 2008: Everyone receives medical care

√
√
√
√
√
√
√
Life Expectancy 78.0 years
Preconception, Prenatal, Perinatal
Childhood & Adolescence
Adulthood & Senior Care
Chronic Disease Management
Catastrophic illness
Disability
Death
Percent of Total Health Care
Spending
Concentration of Health Care Spending in the
U.S. Population, 2008
(≥$44,338)(≥$16,336) (≥$9,148) (≥$6,074) (≥$4,374) (≥$825)
(<$825)
Note: Dollar amounts in parentheses are the annual expenses per person in each percentile. Population is the civilian noninstitutionalized
population, including those without any health care spending. Health care spending is total payments from all sources (including direct
payments from individuals, private insurance, Medicare, Medicaid, and miscellaneous other sources) to hospitals, physicians, other providers
(including dental care), and pharmacies; health insurance premiums are not included.
Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare
Research and Quality, Medical Expenditure Panel Survey (MEPS), 2008.
Distribution of Medicaid enrollment &
expenditures by eligibility category,
FY 2010-2011
SOURCE: CO Department of Health Care Policy & Financing, Executive Budget Request, Nov. 1, 2011
A Uniquely Colorado Solution:
The Colorado Health Care
Cooperative
What is a Health Care
Cooperative?
A nongovernmental, nonprofit, member- owned
and operated corporation
Residents of Colorado are the owner-members
The cooperative operates for the benefit of
Coloradans—providing quality health care for all,
while saving members’ money
Martin Luther King, Jr.
Cowardice asks the question: is it safe?
Expediency asks the question: is it politic?
Vanity asks the question: is it popular?
But conscience asks the question: is it right?
And there comes a time when one must
take a position that is neither safe,
nor politic, nor popular- but one must
take it simply because it is right.