1. Colorado Health Care Reform: The Path Ahead Senator Irene Aguilar, MD

2. Where we’ve been

3. Distribution of Health Plan Enrollment for Covered Workers, by Plan Type, 1988-2011 * 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 Employer- Sponsored Health Benefits, 1993, 1996; The Health Insurance Association of America (HIAA), 1988. 1%

4. 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.

5. 2012 Federal Poverty Levels Family Size Parents 60% FPL Children 100% FPL Expanded 133% FPL SCHIP 225% 400% PPACA 1$ 6702$11,170$14,856$25,133$44,680 2$ 9078$15,130$20,123$34,033$60,520 3$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$60,773108,040 6$18,582$30,970$41,190$69,683123,880

6. Government Insurance  4 Million CO Medicaid = 560,722 CHP + = 69,008 Government Insurance  4 Million CO Medicaid = 560,722 CHP + = 69,008 2011: 48.6 Million Uninsured 2011 Colorado: 829,180 uninsured 16% of population 2011 Colorado: 829,180 uninsured 16% of population

7. Colorado: Only 57.6% Adequately Insured

8. Colorado Medicaid Colorado CHP+ Total FY2007- 2008 391,96259,365451,327 FY2008- 2009 436,81263,247500,059 FY2009- 2010 498,79770,285569,082 FY2010- 2011 560,72269,008629,730 Colorado Department of Health Care Policy & Financing FY2011-12 Medical Premiums Expenditure and Caseload Report, August 2011 Impact of the Recession on Colorado Medicaid 40%

9. Where we’re going

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

20. Table 2: Estimate of ACA Effect, 2016 No ReformWith ACAACA Impact ESI2,630,0002,600,000-30,000 Small Firm ESI (1-50 employees)560,000540,000-20,000 Other ESI2,070,0002,060,000-10,000 Unreformed Non-group340,00060,000-280,000 Reformed Non-group0620,000 Tax Credit Recipients0470,000 Non-Recipients0150,000 Public Insurance550,000710,000160,000 Uninsured860,000400,000-460,000 Total4,390,000 Dr. Jonathan Gruber 9/16/11 → → →

21. Dr. Jonathan Gruber 9/16/11

23. 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).”Rand Corporation

24. *2005 data John A. Nyman, PhD University of Minnesota 24 US v. Other G7 Countries CanadaFranceGerm.ItalyJapanUKAvgUSA MD visits per capita 5.86.47.4 * 7.0*13.65.17.63.8 Hosp discharges per 100 pop 8.428.422.013.910.6*12.616.012.6 Avg hospital LOS 7.35.47.96.719.27.59.06.6 Hospital days per 100 population 144.083.2 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 10.011.210.59.08.18.59.615.8 LE at birth 80.7 79.881.2*82.479.1*80.778.1 Infant deaths per 1000 live births 5.03.8 3.7*2.65.04.06.7 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. * * *

25. Health Care Expenditure per Capita by Source of Funding, 2008 Adjusted for Differences in Cost of Living * 2007. Source: OECD Health Data 2010 (Oct. 2010). Dollars 7,538 4,079 3,737 3,696 3,540 3,470 3,353 3,129 2,683 5,003 4,627

26. American Ingenuity at Work

28. Drug Prices for 30 Most Commonly Prescribed Drugs, 2006–07 US is set at 1.0 Source: IMS Health.

30. New Hampshire Insurers Disparate Payments What is the Price? Range for What Insurance Pays to Health Care Provider Per Procedure ColonoscopyMammogramMRI (back) (Outpatient) Insurer A 1,353 - 4,611227 - 881645 - 2,790 Insurer B 1,270 - 3,121161 - 564640 – 2,292 Insurer C 1,195 - 3,524129 - 612732 - 2,659 Source: CMWF analysis of data retrieved October 2010 from: http://www.nhhealthcost.org/costByProcedure.aspx Advanced primary care networks

31. Variations Among Academic Medical Centers UCLAMass General Mayo Clinic CMS Inpatient Quality Score 81.585.990.4 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 17.7 42.2 12.9 23.9 Specialist/ Primary Care Ratio 2.91.0

32. 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.

33. 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. Chart 1: Medicare Spending per Beneficiary, by Hospital Referral Region, 2006 National Average = $8,304 $7,500 – $8,000 $8,000 – $9,000 > $9,000 $7,000 – $7,500 < $7,000 Not populated Research shows significant variation in health care spending.

34. Massachusetts: Private, Medicare & Medicaid Payment for Professional Procedures Min Price Max Price Office Visit $45$330 MRI Brain $104$646 Colon- oscopy $203$1,045 Private Payer Payment Variation Source: Massachusetts Division of Health Care Finance and Policy, Massachusetts Health Care Cost Trends: Price Variation in Massachusetts Health Care Services, May 2011.

36. 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 * 2006 Source: 2009 OECD Health Data (June 2009). Spending on Health Insurance Administration per Capita, 2007 * 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).

38. IOM: Best Care at Lower Cost

39. 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

40. 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. Concentration of Health Care Spending in the U.S. Population, 2008 (≥$44,338)(≥$16,336)(≥$9,148)(≥$6,074)(≥$4,374)(≥$825) (<$825) Percent of Total Health Care Spending

41. 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

43. A Uniquely Colorado Solution: The Colorado Health Care Cooperative

44. 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 It’s not a farm or electric cooperative.

46. 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.