Tricia Brooks, MBA from Georgetown University\'s Center of Children and Families PPACA implementation presentation for Indiana

1. Health Care Reform!
State of Play: !
Whatʼs at Stake for Indiana?!
TRICIA BROOKS
GEORGETOWN UNIVERSITY HEALTH POLICY INSTITUTE
CENTER FOR CHILDREN AND FAMILIES
INDIANA HEALTH INSURANCE EXCHANGE SYMPOSIUM
OCTOBER 11, 2011
"

2. Why Does America and
Indiana Need Health Reform?!
Itʼs About Getting Better
Results from our Health Care
Expenditures!

3. Total Health Expenditure per Capita,
U.S. and Selected Countries, 2008
$8,000 $7,538
$7,000
$6,000
Per Capita Spending - PPP Adjusted
$5,003
$5,000 $4,627
$3,970 $4,063 $4,079
$4,000 $3,677 $3,696 $3,737
$3,353 $3,470
$3,129
$2,870 $2,902
$3,000 $2,729
$2,000
$1,000
$0
Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database). doi: 10.1787/data-00350-en
(Accessed on 14 February 2011).
Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are PPP
adjusted.

4. Total Health Expenditure as a Share of GDP,
U.S. and Selected Countries, 2008
18%
16.0%
16%
14%
12% 11.1% 11.2%
As Percentage of GDP
10.4% 10.5% 10.5% 10.7%
9.9%
10% 9.0% 9.1% 9.4%
8.5% 8.5% 8.7%
8.1%
8%
6%
4%
2%
0%
Source: Organisation for Economic Co-operation and Development (2010), "OECD Health Data", OECD Health Statistics (database).
doi: 10.1787/data-00350-en (Accessed on 14 February 2011).
Notes: Data from Australia and Japan are 2007 data. Figures for Belgium, Canada, Netherlands, Norway and Switzerland, are OECD estimates. Numbers are
PPP adjusted.

5. Indiana Spending on Health Care
2004!
Per Capita Health Percent of GDP"
Care Expenditures"
16
6000
14.4
$5,383
$5,295
13.3
14
5000
12
4000
10
3000
8
6
2000
4
1000
2
0
0
United
States
Indiana
United
States
Indiana
Source: 2004 Kaiser State Health Facts

6. Life Expectancy Growth Slows;
US Ranks 37th!
2009"
90
2008"
80
80
83
82.3
80.4
80.3
78.2
78.6
70
70
77.7
60
60
50
50
40
40
30
30
20
20
10
10
0
0
Japan
United
Germany
Switzerland
United
States
United
States
Indiana
Kingdom
Source: Organisation for Economic Co-operation Source: 2008 Kaiser State Health
and Development (2009), "OECD Health Data” Facts

7. Infant Mortality
Deaths per 1000 Live Births!
8
7.8
7
6.8
7
6.5
6
6
5
4.7
5
4
4
3.5
4
3
2.6
3
2
2
1
1
0
0
Japan
United
Germay
Switzerland
United
States
United
Indiana
Kingdom
States
Source: Organisation for Economic Co-operation Source: 2008 Kaiser State Health
and Development (2010), "OECD Health Data” Facts

8. Without Health Care Reform,
Where Would Indiana Be Heading?!

9. Based on these recent headlines…!

10. 102% Increase in Business Premiums
Drop in ESI by 9%!
Employer
Spending
on
%
Insured
through
Employer-­‐
Health
Care
Sponsored
Insurance
in
Millions
63.3%
64.0%
+
102.4%
$25,000
62.0%
60.6%
$20,000
+
44.5%
60.0%
57.7%
58.0%
$15,000
56.0%
$10,000
54.0%
$5,000
52.0%
$0
50.0%
2009
2014
2019
2009
2014
2019
Source: B. Garret, et all, “The Cost of Failure to
Enact Health Reform: Implications for States,”
the Urban Institute, 2009 (Worse Case Scenario)!

11. 150,000 more people are uninsured
and unable to pay for health care!
Uncompensated
Care
Costs
Number
of
Uninsured
In
Millions
1,000,000
968,000
$2,500
$2,214
950,000
$2,000
904,000
$1,551
900,000
$1,500
$1,163
850,000
820,000
$1,000
800,000
750,000
$500
700,000
$0
2009
2014
2019
2009
2014
2019
Source: B. Garret, et all, “The Cost of Failure to Enact Health
Reform: Implications for States,” the Urban Institute, 2009!

12. These trends are why Indiana
and America need the
Affordable Care Act!

13. Transforming
the
Health
Care
System
through
The
Affordable
Care
Act
• Coverage
expansions
–
both
public
and
private
• Simplified,
streamlined,
coordinated
enrollment
• Quality
and
cost-­‐containment
measures
• Workforce
investment

14. Thanks to the ACA….!

15. 1 million young adults gained
coverage in the past year!
Including Emily E from
MI. Emily was born with
Common Variable
Immune Deficiency,
leaving her with virtually
no immunities. She was
worried about what
would happen when she
graduated college and
whether she would be
able to get coverage. !
Source: Young Invincibles Website!

16. 1.3 million seniors saved an
average of $517 on prescriptions!
Clifton A from MD was
one of 1.8 million seniors
who got help paying for
prescriptions as the ACA
phases out the “donut
hole.” ! Source: WBAL-TV !
!
o 32,258 Indiana seniors
receive discounts
averaging $537!
o 88,802 received $250
rebate! Source: HHS,
www.healthcare.gov!

17. 162,000 children are helped by
elimination of pre-existing exclusions!
When Mario S from CO
was 3, she was diagnosed
with an AVM (arteriovenous
malformation) in her brain.
She went through 23
procedures to correct the
problem. At 14, Maria was
in good health but she
couldnʼt get coverage
because of her pre-existing
condition. !
Source: Georgetown Center for Children and Families,
“Weathering the Storm” and CBS News !

18. Consumers Gain Many
Other Protections!
o 10,700 did not see their coverage rescinded!
o 20,400 people didnʼt hit their lifetime maximum!
o 41 million Americans, including 19 million seniors,
received no-cost preventive care!
o More of your insurance premium dollar must go to
health care, not overhead, advertising or profits
(80% in individual plans/85% in group) !
o Insurers canʼt raise individual or business premiums
by more than 10% without justification and scrunity!

19. Significant Investment in
Health Care Innovation!
o Workplace health grants!
o Community transformation grants!
o Strengthening community health centers and
school based health clinics (IN $1.5 million)!
o Demonstration projects to improve quality
and reduce costs!
o Better coordination of care for dual eligibles!
o Payment reform !
o See more at www.healthcare.gov!

20. 544,000 Hoosiers Will
Gain Coverage in 2014!
1,000,000
18.00%
870,000
15.9%
900,000
16.00%
800,000
14.00%
700,000
12.00%
600,000
10.00%
500,000
8.00%
400,000
326,000
6.0%
6.00%
300,000
200,000
4.00%
100,000
2.00%
-­‐
0.00%
Before
Health
Reform
A[er
Health
Reform
Before
Health
Reform
A[er
Health
Reform
Source: Urban Institute “Health Reform Across States:
Increased Insurance Coverage and Federal Spending
on the Exchanges and Medicaid,” March 2011

21. Significant
Federal
Investment
in
Indiana’s
Health
Care
Economy
Medicaid
Expansion
Exchange
Subsidies,
2014
-­‐
2019
2014
-­‐
2019
(in
millions)
(in
millions)
State
6000
$4,939
Share
5000
$478
4000
$14,255
3000
Federal
94.1%
2000
Share
$8,535
1000
0
Premium
Tax
Credits
Cost-­‐Sharing
Reduc`ons
Source: Kaiser Commission on Medicaid and the Source: Urban Institute “Health Reform Across States:
Uninsured, “Medicaid Coverage and Spending in Health Increased Insurance Coverage and Federal Spending
Reform: National and State-by-State Results for Adults at on the Exchanges and Medicaid,” March 2011
or Below 133% FPL.

22. Why do state cost estimates
vary so widely?!
NaPonal
EsPmates
of
State
Budget
Impacts
Vary
Widely
CBO
CMS
Urban
(H&H)
Urban
(D&B)
Lewin
$20
-­‐$33
21.1
$-­‐40.9
-­‐106.80
Estimates are based on many assumptions:!
o Take-up rates and crowd-out estimates!
o Unknown issues before federal guidance (i.e. 209b)!
o Time periods covered!
o Administrative costs, particularly relating to IT!
o Specific elements of cost, savings and revenues!
! Source: Kaiser Commission on Medicaid and the Uninsured,
“State Budgets Under Federal Reform: The Extent and Causes
of Variations in Estimated Impacts,” February 2011!

23. Health
Reform
Will
Boost
State
Economy
• Federal
and
state
investment
• Increased
purchase
of
insurance
by
individuals
• Savings
in
uncompensated
care
offset
state
costs
and
other
direct
service
costs
• Direct
economic
impact
• Jobs
and
wages
• Spending
and
taxes
• More
financially
stable
families

24. States are Moving Forward!

25. Not Using Planning Grants!

26. Exchange Activity in the States!
Legislative Activity" Other Paths" Federal Grants"
o 15 States o 4 Executive o 7 Innovator (-2)!
Enacted! Order! o 50 Planning (-3)!
o 4 Pending! o 7 Study o 17 Establishment!
o 2 Existing! Commissions! • 8 where legislation
stalled!
• 2 states in 26
states filing
lawsuits!
• More applied at
end of September!

27. Can Indiana risk waiting for legal
challenges to overturn ACA?!
District Court (26)" Appeals Court (8)"
o 3 determined some parts of o Upheld only that individual
law unconstitutional! mandate is unconstitutional !
• FL overturned all of law as
non-severable!
o Vacated lower court decision !
• VA overturned only individual o 4 upheld dismissals!
mandate! o 2 pending !
• PA ruled parts
• Oral arguments scheduled!
unconstitutional!
o 6 ruled law constitutional!
o 9 dismissed for lack of Supreme Court to hear the
standing/procedural! case this term ""
o 8 pending! o Ruling likely by mid-2012.!
Source: http://www.kaiserhealthnews.org/Stories/2011/
March/02/health-reform-law-court-case-status.aspx!

28. What Should Indiana
Be Doing Now?!

29. Determine Governance Structure!
o New or existing state agency, quasi-state
agency or non-profit organization!
• Majority of governing body cannot have conflict
of interest!
o Apply for tier 2 establishment grant!
• 3 more rounds quarterly until June 29, 2012!
• Provides all implementation operational costs
through 2014!

30. Evaluate Basic Health Option!
o Builds on public programs for those with
income 133-200% FPL!
• Potential to build on HIP with changes!
o Funded by 95% of premium tax credits,
cost-sharing reductions!
o Potential advantages!
• Minimize transitions between programs!
• More affordable, comprehensive for
consumers!

31. Create a Strong Process for
Ongoing Stakeholder Engagement!
o Required by proposed regulation and as a
condition of funding!
o Planning, implementation, evaluation and
on-going!
o More than surveys, forums and disclosure!
o It should be a partnership between state,
industry, consumers, providers and other
stakeholders!

32. Coordinate with Medicaid/CHIP!
o Single, streamlined application!
o Exchange establishes eligibility for all Insurance
Affordability Programs!
• Medicaid, CHIP, BHP, Exchange Premium Tax Credits
and Cost-Sharing Reductions!
o Single eligibility system or shared eligibility service!
o Data matches to confirm eligibility!
• Federal Data Services Hub!
o Single web-portal with real-time decision!
• Also access over phone, in-person, via mail!

33. Develop IT Infrastructure!
o Unprecedented but time-limited federal
financial participation!
• 90% development costs – Medicaid (ends 2015)
with 75% for ongoing operational costs!
• 100% Exchange infrastructure (3 more rounds)!
• Expedited review process!
• Waiver of certain cost-allocation rules across
programs!
o Complex, time-consuming project to execute!

34. What happens if Indiana
doesnʼt move forward?!

35. There Will Be a Federally-Run
Exchange in Indiana!
o The federal exchange will conduct eligibility
and enrollment activities for Medicaid/CHIP!
o Indiana will lose the opportunity to finance
a state-of-the art, consumer-friendly, data-
driven IT infrastructure that will enhance
the efficiency and accuracy of existing
health programs!

36. States Need Exchanges!
o ….Even if the courts or Republicans
succeed at unraveling the law,
companies and states are likely to keep
moving ahead with exchanges because
they recognize that individual insurance
shoppers and small businesses have
long been at a disadvantage, lacking the
negotiating power of large companies
that can demand better prices. ! Former HHS Secretary Mike Leavitt!
"Any number of events could interrupt" the development of
exchanges, he said. "But, we'd still have the problem of pooling
[customers to create leverage for better prices]. And we have a
distribution system that is more expensive than we can afford."!
Source: Kaiser Health News!

37. Georgetown Health Policy Institute
Center for Children and Families!
o Tricia Brooks, Senior Fellow!
• pab62@georgetown.edu !
• 202-365-9148!
o Visit our Website: http://ccf.georgetown.edu/!
o Read Say Ahhh! Our child health policy blog:
http://www.theccfblog.org/!
o Friend us on Facebook: www.facebook.com/georgetownccf !