Medicare: a Single Payer system in “crisis”? A Comparison to other U.S. Health Insurance Systems Oliver Fein, M.D. Chair, New York Metro Chapter Physicians for a National Health Program Professor of Clinical Medicine and Health Policy Associate Dean (Affiliations) Weill Cornell Medical College Workshop PNHP National Meeting New Orleans, LA November 15, 2014

DISCLOSURES Dr. Oliver Fein has no relevant financial relationships with commercial interests Dr. Oliver Fein is Chair of the NY-Metro Chapter and past President of Physicians for a National Health Program (PNHP), a non-profit educational and advocacy organization. He receives no financial compensation from PNHP.

PRESENTATION OUTLINE 1.Macroeconomics of Health Care 2.Medicare in Comparison to other U.S. Health Insurance Programs 3. Comparing Traditional Medicare to Medicare Advantage

NATIONAL HEALTH CARE EXPENDITURES Billions of dollars (% total for year) Category * Personal Health Care$ 23.3 (85%)$ 2,360.4 (84%) Public Health Activities$ 0.4 (1%)$ 75.0 (3%) Research and Construction $ 2.6 (10%)$ (6%) Other$ 1.2 (4%)$ (7%) TOTAL NHE$ 27.5 (100%)$ 2,793.4 (100%) Per Capita NHE$ 147$ 8, 915 NHE as percent of GDP5.2%17.2% * Data for 2012 from Health Affairs: January, 2014;33:67-77

PERSONAL HEALTH CARE EXPENDITURES Billions of dollars (% total for year) Category * Hospital care$ 9.2 (39%)$ (37%) Physician services$ 5.4 (23%)$ (24%) Dental$ 2.0 (9%)$ (5%) Other professional services$ 0.4 (2%)$ 76.4 (3%) Prescription drugs$ 2.7 (12%)$ (12%) Other medical products$ 2.3 (9%)$ 95.0 (4%) Nursing home and home health$ 0.9 (4%)$ (15%) Other$ 0.4 (2%)$ 0 (0%) Total Personal Health Care$ 23.3 (100%)$2,360.4 (100%) * Data for 2012 from Health Affairs: January, 2014;33:67-77

WHO PAYS FOR HEALTH CARE? 1 CategoryBillions of Dollars% of Total NHE (minus investments - $160B)$ 2,633.4(100%) Private Funds$ 882.1(34%)  Private health insurance$ 553.9(12%)  Out of pocket payments$ 328.2(13%) Public Funds$ 1,751.4(66%)  Medicare$ 572.5(22%)  Medicaid$ 421.2(16%)  Other Federal**$ 103.8(4%)  Other Federal and State***$ 290.8(11%)  Public Employee health benefits$ 167.6(6%)  Tax Subsidies$ 195.5(7%) Tax-Financed ($ per capita) $ 5,590 *Data for 2012 from Health Affairs: January, 2014, using the methodology described in Health Affairs 2002;21:88-98 **Includes VA, DOD, CHIP *** Includes IHS, federal public health, Worker’s Comp., SAMSA, School health, etc. 1 Woolhandler S, Himmelstein, DU. Paying for National Health Insurance—and Not Getting It. Health Affairs. 2002:21;88- 98

CONCLUSION #1 We are more than half way to a government financed health care system!

US Public Spending for Health Exceeds Total Spending in Other Nations Data are for 2011 Sources: OECD 2013; Health Affairs (4) healthcare spending per capita $8,950

MedicareMedicaid Private HI Employer-based Private HI Exchange-based Number enrolled Eligibility Means-based Comprehensive Coverage 1. Benefits 2. Deductibles (annual) 3. Co-payments Actuarial Value Type of Financing Progressiveness of Financing Administrative Costs Type of MD Payment Network Narrowness COMPARISON OF US HEALTH INSURANCE PROGRAMS

2014 Federal Poverty Guidelines Federally facilitated marketplaces will use the 2014 guidelines to determine eligibility for Medicaid and CHIP (this is effective February 10, 2014). Household Size 100% 133% 150%200% 250% 300%400% 1$11,670$15,521$17,505$23,340 $29,175 $35,010$46, ,730 20,92123,595 31,460 39,325 47,19062, ,790 26,32129,685 39,580 49,475 59,37079, ,850 31,72135,775 47,700 59,625 71,55095, ,910 37,12041,865 55,820 69,775 83,730111, ,970 42,52047,955 63,940 79,925 95,910127, ,030 47,92054,045 72,060 90, ,090144, ,090 53,32060,135 80, , ,270160,360

Metal ProductDeductibleInpatient Cost Share Outpatient Cost Share ED Cost Share Max Annual Out of Pocket Platinum$0$500$100 $2,000 Gold$600$1,000$100$150$4,000 Silver  Full Pay  FPL 200% - 250%  FPL 150% - 200%  FPL 100% - 150% $2,000 $1, $1, $ $ $5,500 $4,000 $2,000 $1,000 Bronze$3,00050% $6,350 Catastrophic*$6,400100% $6,400 TABLE 4: HOSPITAL COST SHARE AMOUNTS Subsidization of Cost Sharing Amounts (for copayments and deductibles): will be made for parties or below 250% of poverty (currently less than $28,725 for a single adults and $58,875 for a family of four). It is not clear how any provider will be in a position to know any member’s cost share obligations at the time of service. *Catastrophic policies cover 3 primary care visits per year at no cost. Catastrophic policies also cover the free preventive benefits (

Metal ProductPrimary Care MD Specialist MD Surgeon MD Platinum$15$35$100 Gold$25$40$100 Silver  Full Pay  FPL 200% - 250%  FPL 150% - 200%  FPL 100% - 150% $30 $15 $10 $50 $35 $20 $100 $ 75 $ 25 Bronze50% Catastrophic100% TABLE 4A: PHYSICIAN SERVICES COST SHARE AMOUNTS

CONCLUSION #2 U.S. Health Insurance system is very complex

COMPARISON Traditional Medicare Medicare Advantage

CONTACTS AND REFERENCES PNHP National: PNHP-NY Metro: Bodenheimer TS, Grumbach K. Understanding Health Policy: A Clinical Approach. McGraw-Hill (2012) Fein O, Birn AE. (editors). Comparative Health Systems. Am Jour Public Health (2003) 93: O’Brien ME, Livingston M (editors). 10 Excellent Reasons for National Health Care. New Press (2008) Potter W. Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. Bloomsbury (2010) Geyman, J. Health Care Wars: How Market Ideology and Corporate Power are Killing Americans. Copernicus Healthcare, Friday Harbor, Washington (2012) Himmelstein, DU, et. al. A Comparison of Hospital Administrative Costs in Eight Nations: US Costs Exceed All Others by Far. Health Aff (2014) 33: