1. Robert E Goff

3. The Uncomfortable Reality That scares anyone that understands it

4. Health Insurance costs have been squeezed out of what would and could have been employee wage increases

5. Employee wages have been, adjusted for inflation, declining

6. Yet employee contributions to insurance premiums has been increasing - squeezing out other spending

7. Employer provided coverage is dropping Small employers eliminate coverage offering especially for low paid worker If not subject to mandate – under 50 The nature of who pays for coverage is changing

8. Employers are moving to DEFIEND CONTRIBUTION Away from DEFIEND BEENFIT Offering a fix contribution, letting the employee decide the coverage levels, copays, deductibles, etc How employer provided health insurance is sold is changing – private exchanges

9. Health Reform and what it brings

10. Health Reform Has Been Happening Small business tax credit Prohibitions against lifetime benefit caps & rescissions Phased-in ban on annual limits Annual review of premium increases Public reporting by insurers on share of premiums spent on non-medical costs Preventive services coverage without cost-sharing Young adults on parents’ plans Insurers must spend at least 85% of premiums (large group) or 80% (small group / individual) on medical costs or provide rebates to enrollees HHS must determine if states will have operational exchanges by 2014; if not, HHS will operate them State Insurance Exchanges Medicaid expansion Small business tax credit increases Insurance market reforms including no rating on health Essential benefit standard Individual requirement to have insurance Employer shared responsibility penalties Penalty for individual requirement to have insurance phases in (2014-2016) Option for state waiver to design alternative coverage programs (2017) Employer mandate kicks in 2015 States adopt exchange legislation and begin implementing exchanges Phased-in ban on annual limits

11. In 2011 Health Insurance Companies Became Public Utilities Insurers must spend on medical expenses at least 85% of premiums (large group) or 80% (small group/individual) Or provide rebates to enrollees Premium increases subject to state rate review and approval

12. Health Plans in the worst possible position Public Policy demands premium “restraint”  If there is a surplus – must refund it  If there is a deficient – must absorb it  Better to have a surplus than a loss Driving benefits for surplus  Cost of care controls  Deductibles  Narrow Networks  Ending OON  Try to grow revue outside of insurance

13. For providers its ugly too….. Hospitals - There is no future in bricks and mortar One-third of hospitals will close by 2020

14. Number of self-employed physicians is declining Employed physicians are increasing Groups are increasing Consolidation of means of care delivery Increasing number of physician extenders being utilized Physicians assistants Nurse practitioners Nature of the provider community is changing Increasing options to physicians services Minute clinics Telemedicine Urgent care

15. Physician payments aren’t fairing much better IMD – implantable medical devices

17. The end of junk policies To be phased out, or eliminated now Policies must contain “Essential Benefits” But…. Exceptions Catastrophic plans Student health policies Self-insured benefits Fixed benefit plans / Indemnity plans (pay a fixed amount per encounter) Grandfathered – where allowed Benefits: The Good News For Consumers

18. Children to age 26 under parents policies No pre-existing conditions exclusions Removal of all lifetime limits or caps on health coverage No cancellation a policy without proving fraud No denial of claims without appeal Benefits: Good News Essential Benefits close many holes in coverage Barriers to accessing policies removed

19. No cost sharing on preventive services More Good news – Limits on cost sharing BronzeSilverGoldPlatinum Deductibles Individual$3000$2000$600-0- Family$6000$4000$1200-0- Out-of-pocket cap Individual$6350$5500$4000$2000 Family$12700$11000$8000$4000

20. Up to $45,960 Up to $62,040 Up to $78,120 Up to $94,200 Up to $110,280 Subsidies will be provided to people with family income between 100% and 400% of the federal poverty level (The federal poverty level varies by family size. In 2013, it is $11,490 for a single adult and $23,550 for a family of 4.) The most that these families buying subsidized coverage in an exchange, will pay towards a health insurance premium will range from 2.0% of income at 100% of poverty to 9.5% of income at 400% of poverty Still more Good News - Subsidies to purchase coverage Family Size

21. Bronze Silver Gold Platinum Differing deductibles Differences are Price Network Good News: Standard Benefits Packages

22. And now some bad news Reality Some will find that subsidies lower the cost of their coverage. Many will find increases in premium

23. Benefits: They are not complete

24. Health Exchange productsCommercial products Few carry a rider for Out-of- network benefits No Out-of-Network Coverage (New York market) Market adequacy standards in NY is the Medicaid standard Bad News: Benefits are tied to narrow or in-networks of providers

25. And its even more than deductibles

26. Its deductibles and cost-sharing BronzeSilverGoldPlatinum Deductibles Individual$3000$2000$600-0- Family$6000$4000$1200-0- Out-of-pocket cap Individual$6350$5500$4000$2000 Family$12700$11000$8000$4000

27. 64% of commercial plans nationally carry a high deductible ($1,000 - $3000) Major corporations are tying deductibles to income $3000 to $10,000 The most popular products of the HIX are expected to carry large deductibles By 2015 30% Of Medical Costs Are Expected To Become The Responsibility Of The Patient

28. And the patient pays and pays….

29. 80% of self-pay accounts are never paid in full 50% of patient financial responsibilities become bad debts 31% of physicians say they lose revenue due to uncollected patient responsibilities The ability to collect the full amount of patient financial responsibility drops to less than 20 percent after the patient has left the physician’s office. Increasing Patient Responsibility 29 Robert E. Goff

30. By 2015 30% Of Medical Costs Are Expected To Become The Responsibility Of The Patient Deductibles Out-of-pocket under the cap Non-covered benefits Out-of-network services Every provider will have the issue of collecting that patient portion What is there to collect

31. Payers are trying to get in on managing/collecting the patient portion United/InstaMed® Aetna – WellMatch® Both of these combine registered credit cards of patients with automated identification and billing of the patient portion when the insurance portion is processed Meet Your New Competition

32. What the future holds Mass Confusion, Mass Destruction And/or Mass Disruption?

33. Questions? Robert E Goff Robert.goff@nyumc.org Thank you for your attention