Affordable Health Care Act

Small Business Dallas Position on the Affordable Care Act

Ensuring affordable and fair access to health care will accelerate growth and lower costs for small businesses. We support actions that recognize the right to health care for all small businesses and their employees, establish fair insurance costs and simplify the process of obtaining health care.

The recent health care reform bill moves us closer to addressing these goals. We favor rapid implementation of the new law, with an emphasis on ongoing changes that lower costs and ensure access for small businesses.

Small Business Dallas knows that we need policies that enable our business to grow locally and compete globally

FAQ about SBM Health Care Policy

Why is Small Business Dallas different in our advocacy of health care reform?

  • Everyone is concerned about health care costs. However, health care expenses are a larger issue for small businesses as compared to other organizations. Small businesses need the same access to affordable health care at the same costs as larger companies. Small businesses pay an average of 18 percent more per worker than large firms for the same health insurance policy. Also, 75% percent of employees view health insurance as a major job selection factor. Given that small businesses pay more for insurance (leaving less to pay wages) if they can afford it at all, this makes it very difficult to hire employees in a small company and makes it very difficult to start a business as well.
  • We need to level the playing field. Small Business Dallas is a unique advocate for change that benefits all small employers. Many health care providers, insurance companies and other groups are actively opposed to policies that will provide small businesses with full access to health care at fair costs.

What is the problem with health care for small businesses?

Small businesses pay more for health care, get less care for the same payments and are subsidizing tax breaks for large employers. While there are many factors that promote out-of-control increases in health care costs that affect us all, we believe that all businesses need to be treated under the same rules and have the same bargaining power. Currently, the system is stacked in favor of larger companies and large health care providers.

Think about it. Larger companies have lower insurance rates and lower health care costs than small businesses across the board, largely due to bargaining power that discriminates against smaller groups. Add to that the huge tax benefits and deductions built into current tax laws due to 100% deductibility of fat insurance plans that most small businesses can’t afford (although the tax credits in the Affordable Care Act will provide short-term help). This means that your business is actually subsidizing large businesses in the form of tax breaks and higher health care costs that you pay for!

Moreover, as noted by the American Journal of Medicine, medical costs account for over 60% of all bankruptcies. These events have increased over 50% since 2001, and small business owners fall right into the income group that gets hit the hardest here. Does that seem right to you?

What about quality of health care?

Small Business Dallas supports the practice of evidence-based medicine. That means that patients receive—and insurance companies pay for—treatments whose efficacy is proven by the preponderance of research, rather than treatments of questionable benefit. Evidence-based medicine is a position advocated by leading providers such as the Mayo Clinic and is specifically provided for in the Affordable Care Act. States like Vermont and Oregon are already implementing evidence-based medicine approaches.

Also, we support improved access to primary care for all Americans to prevent medical problems before they become major (expensive) issues – a proven way to lower costs.

What about improving health care in Dallas?

Although Dallas has relatively stronger health care than the rest of the country, we can do better.

  • Reduce the number of uninsured and underinsured. All small businesses that provide health care are being hit with a very large hidden tax- those who pay into the current system pay for the costs of the entire health care system in the form of higher taxes, higher insurance premiums and higher costs of delivery. There are no free rides when it comes to health care.
  • As a leader in medical technology, Dallas needs to invest more in medical research to lead the nation in delivering health care that works and costs less.
  • The combination of the ACA and the new Dallas Health Care Exchange are estimated to provide affordable insurance coverage to hundreds of thousands of currently uninsured people, many of whom own or work for small businesses.

How and where do I obtain health care?

One key is to simplify the process of obtaining insurance, which the Affordable Care Act actively promotes. Standardized, simple on-line application for insurance with full cost disclosure is finally on the way via the new Health Care Exchange which we actively support. You can do this with every other type of insurance already. Why not with health insurance?

Small business should be able to purchase insurance on a national basis where we are included in large pools. This will go a long way toward eliminating rate and benefit discrimination against small businesses.

Better yet, this revised system removes the disadvantage of tying employment to insurance coverage.

Imagine if anyone could start a small business or work for one without worrying about losing their insurance coverage, paying ridiculous rates or risking their family’s security by going “bare”? How many more jobs would that create and how much more innovation would we experience?

What about the ACA and the Dallas Health Care Exchange?

We promote the implementation of the Affordable Care Act (ACA) as a necessary step. The ACA says nothing about creating a single payer system or government takeover of the health care system.

A proven factor in providing affordable health care is standardization of benefits and costs. The United States has experienced much higher health care cost increases (over 100% in the last ten years alone per the Centers for Medicare and Medicaid Services) than any other industrialized country in the world. All of the industrialized countries other than us offer essentially universal coverage at far lower costs than in our country. How did they do it? These countries offer a surprising mix of programs, with the most successful delivered through an entirely private health care system, just like we have in the USA. First, those programs standardize and control administration and overhead costs. Second, they pay providers based on evidence-based criteria. That evidence includes measuring the cost of a given treatment versus actual outcomes measured scientifically.

This approach works. Every other industrialized country in the world has their health care costs under control- per the OECD we spend 2-and-a-half times more per person for health care than the rest of the industrialized world . Their citizens also have much higher satisfaction with their health care systems than we do in the United States – and across many measurements they have better health care outcomes than we do too.

For Dallas’s part in implementing the ACA, we favor the new Health Insurance Exchange as long as it is run for the benefit of the citizens and businesses it is intended for instead of the insurance companies and other players who created the current expensive mess in the first place. That means the governing board should have no members with conflicts of interest and the state should actively select and manage the insurance providers who participate.

If the ACA and Dallas Exchange don’t achieve the goals of increasing access and lowering costs, we support regional insurance exchanges as the next step to a standardized national system.

For further analysis of the ACA, see Beyond the Affordable Care Act, at http://growthandjustice.org/sites/2d9abd3a-10a9-47bf-ba1a-fe315d55be04/uploads/03-28-2012_Beyond_the_Affordable_Care_Act__Web_.pdf

Compiled by C Dircz, Small Business Dallas January 2013

Summary of Dallas & USA Health Care, 2012.

Costs

USA. The cost of health care in the United States increased to $2.6 trillion annually for 2010, up from $256 billion spent in 1980.[1] Health care spending accounted for 17.9% of Gross Domestic Product (GDP) in 2010. [5] As shown here, over 50% of all health care spending goes to physicians and hospitals.

Pie

Total = $2.3 Trillion- National Health Expenditures, 2010

Source: Martin A.B. et al., “Growth In US Health Spending Remained Slow in 2010; Health Share of Gross Domestic Product Was Unchanged from 2009,” Health Affairs, 2012.

Since 2001, employer-sponsored health coverage payments have increased by 113%. During the last 10 years, inflation has gone up about 23% [19], while average employee incomes have basically remained flat.

Health care spending is higher in the United States than in any other developed country, by far the highest share in the OECD and almost eight percentage points higher than the OECD average of 9.5%. Following the United States were the Netherlands, France and Germany, which allocated respectively 12.0%, 11.8% and 11.6% of their GDP to health. The United States spent 7,960 USD on health care per capita in 2009, two-and-a-half times more than the OECD average of 3,223 USD (adjusted for purchasing power parity). Following the United States were Norway and Switzerland which spent over 5,000 USD per capita. Americans spent more than twice as much as relatively rich European countries such as France, Belgium and the United Kingdom. [4]

The United States is the only industrialized country that does not have universal health coverage for all citizens. In most countries, health spending is largely financed out of taxes or social security contributions, with private insurance or ‘out-of-pocket’ payments playing a significant but secondary role. This is not the case in the United States which, together with Chile, are the only OECD countries where the government plays the smallest role in financing health spending (Mexico was removed from this list in 2008 and now offers universal health care). The public share of health expenditure in the United States was 47.7% in 2009, a much lower percentage than the OECD average of 71.7%. However, the level of health spending in the United States is so high that public (i.e. government) spending on health care per capita is greater than in all other OECD countries, except Norway and the Netherlands. [4]

Uninsured/underinsured

According to the United States Census Bureau, in 2009 there were 50.7 million people in the US (16.7% of the population) who were without health insurance. However, as many as 80 million people are without health insurance during at least part of the year. [3] Most of the uninsured in the US are citizens (78%).[5] according to the State of MN, an estimated 490,000 Dallasns were uninsured in 2011, [6] Dallas has one of the lowest rates of uninsured people at 9%, Texas has the highest rate. See Exhibit 1 for state breakouts.

The costs of treating the uninsured must be absorbed by providers as charity care, passed on to the insured via cost-shifting and higher health insurance premiums, or paid by taxpayers through higher taxes. On the other hand an argument has been made that the uninsured often subsidize the insured because the uninsured use fewer services and are sometimes billed unfairly. 60 Minutes and others have reported that “hospitals charge uninsured patients two, three, four or more times what an insurance company would pay for the same treatment.” On average, per capita health care spending on behalf of the uninsured (not spending paid for by the uninsured) is a bit more than half that for the insured.[16].

Upon analysis, the claim that the uninsured are somehow subsidizing the insured does not stand up to mathematical scrutiny, as the actual payments by the insured are a small fraction of what the insured are paying. As shown later, the costs of the uninsured are largely paid by 3 sources; a net increase in the insurance rates for the insured, taxes which are also all paid for by corporate and individuals with a third (smaller) source coming from charities. The insured payers and taxpayers are paying for virtually the entire system.

Dallas Health Care Spending & Payment Sources

We spend a lot of money on medical care. A recent Health Economics Program publication states that overall Dallas health care spending from all sources reached $36.4 billion in 2009. For those of us with some form of coverage, almost half are insured through public sources, while 40% are private.

As shown below, coverage costs range from about $4,500 per person on private plans to over $9,000 person for people on public plans.

This gap is largely due to high percentages of the unemployed, disabled and elderly who rely on public health care programs

Transfer Costs

For those insured through private plans with fewer than 100 employees, their cost per family member is 18% ($800) higher per year than employees working at larger companies. There are over 500,000 small businesses in Dallas that have fewer than that 100 employee threshold and per the Kaiser Foundation less than half of those provide medical insurance.

In short, many owners and workers in small businesses don’t have medical insurance and those that do pay higher rates for the same coverage than big companies do.

As noted, taxpayers pay for a lot of medical care. In 2011, four health plans contracted with the State to provide managed care services for people enrolled in Medical Assistance and DallasCare. Total MN State/County payments for Medical Assistance, which is primarily paid for by Federal funds, were $2.89B for 2011, out of a total of $7.5B. This covered 665, 000 enrollees, or a cost of $4,435 per person. [13]

In 2009, a study by the Center for American Progress for Families USA found that, on average, 8 percent of USA families’ 2009 health care premiums—approximately $1,100 a year— is due to cost shifting from the uninsured to the insured. Note that this cost broken out by state shows MN at $400 per family annually on average. This is a hidden tax on employers and families who pay for insurance. [14] When grossed up for the fact that employees pay approximately 33% of health insurance premiums with the majority (67%) paid by employers, this means that the total hidden cost is actually $1200 per year per family even in MN, a state with a relatively smaller uninsured population than the US overall. As another example, in Indiana, these shifted costs have a significant impact on Hoosiers. Each Indiana family with health insurance paid an additional $953 in premiums in 2005 to cover the cost of the uninsured. By 2010, premiums were at least $1,494 higher for families to account for the cost of the uninsured. [15]

Under the ACA, not all of the money to pay for universal coverage would come from state funding. If the State adopts the new Medicaid option, 100% of any cost increases for low income families or about $472 million for MN would come from federal funds for the next 2 years. If current DallasCare premium schedules remained in place, about 38.4% or $806 million of the total would come from enrollee premiums. (This estimate assumes that uninsured children and parents with incomes above 275 percent of poverty guidelines and adults without children with incomes above 175 percent of poverty guidelines would be allowed to enroll in DallasCare, but would have to pay the full premium – i.e., would not receive any public subsidy.) The state would receive matching federal funds for the people newly enrolled in DallasCare. The estimated net cost to the state would be $818 million or about 5% of the state’s annual budget, before the offset from costs not passed through to business in the form of higher insurance premiums or losses absorbed by health care providers. In short, the ACA plans will reduce transfer costs for those already paying insurance (source 1) reduce charitable costs (source 3), leaving the costs to be paid by taxes of some form (source 2).

Effect of the Dallas Health Care Exchange

The Health Care Exchange will help small businesses who currently can’t get or afford coverage.

Estimate of the ACA Effect on the uninsured in Dallas -from Gruber, Gorman) [23]

As we have discussed earlier, there are a lot of small businesses with fewer than 50 employees. As shown above 6,000 of them who currently have some insurance will pick up insurance through traditional carriers due to subsidies in the ACA. More striking is the increase of almost 300,000 uninsured people who will gain insurance. The same study show that there will be 1.3 million people using the Exchange within 3 years.

Alternatives- EU, Canada, Massachusetts.

Canada – Unlike systems with public delivery, such as the UK, the Canadian system provides public coverage for private delivery. As Princeton University health economist Uwe E. Reinhardt notes, single-payer systems are not “socialized medicine” but “social insurance” systems, because doctors are in the private sector. Similarly, Canadian hospitals are controlled by private boards and/or regional health authorities, rather than being part of government. Canada and the United States had similar health care systems in the early 1960s, but now have a different mix of funding mechanisms. Canada’s universal single-payer health care system covers about 70% of expenditures, and the Canada Health Act requires that all insured persons be fully insured, without co-payments or user fees, for all medically necessary hospital and physician care. About 91% of hospital expenditures and 99% of total physician services are financed by the public sector.

More than 31 percent of every dollar spent on health care in the U.S. goes to paperwork, overhead, CEO salaries, profits, etc. The provincial single-payer system in Canada operates with just a 1 percent overhead. 95% of medical costs are paid for by the public system in Canada. Ophthalmology and dental services account for almost all of the remaining private expenditures in Canada. In the United States, with its mixed public-private system, 46% of health care costs are paid for by public funds, but regardless, per person public funds expenditures are much higher in the US because of the much large costs. [ 7]

Studies show that 91% of Canadians preferring their healthcare system to that of the U.S. In a 2009 Canadian National Population Health Survey of 17,276 Canadian residents, it was reported that only 0.5% (one half of one percent) sought medical care in the US in the previous year. Of these, less than a quarter (less than a tenth of a percent) had traveled to the U.S. expressly to get that care. Furthermore, the remaining cases were almost always related to proximity to services being much closer to the US in rural area of Canada near the border. [8]

For example, one of the few scientific surveys done on the matter traced MRI and diagnostic service records of all facilities in the three large metropolitan areas of NY, WA and Michigan in the US. Combined, the US providers in total saw approximately 640 Canadian patients for diagnostic radiology services such as computed tomography (CT) scans or MRI and 270 patients for eye procedures such as cataract surgery over a one-year period. By comparison, the annual volume for CT scans and cataract extractions averaged about 80,000 and 25,000 procedures, respectively, in British Columbia alone during the same annual period. In Quebec the annual volume during the same period for CT scans and MRI averaged 375,000 procedures and 44,000 procedures, respectively. [9]

Over the five-year observation period from 1994 to 1998, 2,031 patients identified as Canadians were admitted to hospitals in Michigan; 1,689 to hospitals in New York State; and 825 to hospitals in Washington State. During the same period, annual inpatient admissions to hospitals within the bordering provinces of Ontario, Quebec, and British Columbia averaged about 1 million, 600,000, and 350,000, respectively. Thus, Canadian hospitalizations in the three U.S. states represented 2.3 per 1,000 total admissions in the three Canadian provinces. Furthermore, emergency/urgent admissions and admissions related to pregnancy and birth constituted about 80 percent of the stateside admissions. Elective admissions were a small proportion of total cases in all three states: 14 percent in Michigan; 20 percent in New York; and 17 percent in Washington, amounting to a few hundred procedures across the entire country.

EU

Germany-(chosen because they have a private insurance payer system). Health care funding is more complicated in Germany than in many other countries because they do not rely on a single source of revenue. Instead, a variety of sources are used. The statutory [public] health insurance funds (which are private companies), often referred to as the sickness funds, cover about 90 percent of the population. Contributions to these funds, which are based on income, are made by both employers and employees. Germany has some 180 statutory health insurance funds, and they account for approximately 70 percent of the health system’s revenue.

About 10 percent of the population has private health insurance; the premiums for these plans vary based on each patient’s risk factors. Tax subsidies are used to finance approximately 10 percent of health care services. In addition, patients are required to make out-of-pocket copayments for many services, including drug prescriptions; employers underwrite the cost of a few services; and there are a handful of other, minor sources of funding.

There is no single lever they used for cost containment. Instead, they implemented a large number of minor measures to stabilize the health system’s income and expenditures. In the past 20 years, the overriding philosophy has been that the health system cannot spend more than its income.

The minor measures were implemented at every level of the health system. For example, each year they establish an overall budget for the system at the national level to serve as a guide for all participants in the system. Virtual budgets are also set up at the regional levels; these ensure that all participants in the system—including the health insurance funds and providers—know from the beginning of the year onward how much money can be spent.

In addition, they carefully control all types of spending. They contract with office-based doctors for their services, use DRGs [diagnosis-related groups] to reimburse for hospital care, and have specific regulations for drug expenditures. They have also introduced incentives that encourage everyone to avoid unnecessary expenditures.

Summary of German Approach- [12]

  • Universal coverage required by law.
  • Statutory public (actually private regulated insurance payers) cover 90% of population, 10% use non-statutory payers, cost for those is based on health risk assessment.
  • Budgets are set annually that set total funding, which is then broken down by region.
  • Contracts are set with most providers, which are paid by number of patients, not number of procedures.
  • They use DRGs [diagnosis-related groups] to reimburse for hospital care as opposed to “by procedure” reimbursements such as in the US. They also increasingly use integrated care at master clinics
  • Copayments, which vary based on each drug’s cost, discourage patients from using expensive medications that provide no real advantage over less expensive alternatives for all drugs in a therapeutic class at the same price
  • Heavy use of disease-management programs for patients with heart disease, diabetes, and some other common chronic conditions. The programs were designed using evidence-based guidelines.
  • A federal joint committee that represents doctors, nurses, other health professionals, the health insurance funds, and hospital owners (note not patients) sets all reimbursement rates. In effect they control price and use evidence-based medicine to avoid rationing care
  • In the German system, the health insurance funds have always obtained a lot of data from doctors, hospitals, pharmacies, and other sources. However, they are now allowed to bring all this information together.
  • Competition. Patients have been given much greater freedom to choose among the various statutory health insurance funds. They also have greater freedom to choose which services they want to have covered, which doctors they consult, and which hospitals they visit for treatment. As a result, the insurance funds, doctors, and hospitals must now compete for patients.

Massachusetts (and more states head to single payer/large insurance pools )

In summary, the Massachusetts law is very similar to the federal ACA across the board. They have achieved goals such as providing almost universal coverage. During the first few years after enactment costs continued to rise beyond what they expected. From 2011 on however, costs increases have moderated and are below national averages while expected savings from drops in services like emergency room visits are showing up. A large majority of Massachusetts residents are satisfied with the commonwealth’s subsidized health plan, which has components similar to the Obama administration’s federal plan, according to a poll released in 2011. The poll by Market Decisions, a research and consulting group, found that 84 percent of residents are satisfied with the Massachusetts plan, which requires most adults to have health insurance, while 81% were satisfied with coverage. .

  • From 2006, the number of uninsured Massachusetts residents dropped from about 6% to about 2% in 2010 according to the Massachusetts Department of Healthcare Finance and Policy (DHCFP), depending on the methodology used. This is one of the lowest uninsured rates in the country.
  • They expected major drops in MA government funding (through their Health Safety Net Fund (HSN) due to less patient reliance on emergency rooms etc. Early on, these savings were basically not realized (costs dropped 2%). However, from 2011 on, emergency room visits have fallen significantly [24]. Moreover, in 2012 the state revised the laws to hold the annual increase in total health care spending to the rate of growth of the state’s gross domestic product for the first five years, through 2017, and then even lower for the next five years, to half a percentage point below the economy’s growth rate. The savings are projected to be as high as $200 billion over a 15-year period.
  • The plan was that by reducing the number of uninsured people Commonwealth Care would reduce the amount of charity care provided by hospitals. The Globe reported that Commonwealth Care faced a short-term funding gap of $100 million and the need to obtain a new three-year funding commitment from the federal government of $1.5 billion
  • There were severe weaknesses in the mandatory coverage provisions that allow people to game the system. During the week of April 5, 2010, the Boston Globe reported that more than a thousand people in Massachusetts had “gamed” the mandate/penalty provision of the law since implementation by choosing to be insured only a few months a year, typically when in need of a specific medical procedure. On the average, the Globe reported, these part-time enrollees were paying $1200–$1600 in premiums over a few months and receiving $10,000 or more in healthcare services before again dropping coverage. This problem has also been addressed in the 2012 legislative session.
  • For a few years after inception, Massachusetts government health care costs grew more than inflation for private insurance (see DHCFP research). [19] However from 2010 on, costs have moderated and increases are now at or below the national average. Also, the legislature passed a bill in July 2012 to cap health care spending across-the-board, with the possibility of fines on healthcare organizations that do not cooperate to get their healthcare costs in line. [24]

During 2012, Vermont passed a single payer health care bill with implementation expected to be complete in 2017.

Similarly, in 2012 Oregon passed sweeping changes to their health care programs which include European-style requirements to set payment rates, established a review commission which sets treatments and priorities via evidence-based analysis and launched 15 Coordinated Care Organizations, essentially large insurance/delivery pools which now cover 90% of state-funded enrollees. [25]

Outbound USA citizens getting health care outside USA

A forecast by Deloitte Consulting published in August 2008 projected that medical tourism originating in the US could jump by a factor of ten over the next decade. An estimated 750,000 Americans went abroad for health care in 2007, and the report estimated that a million and a half would seek health care outside the US in 2008. That number is projected to increase to over 6 million by 2013. [10] In contrast, A McKinsey and Co. report from 2008 found that a plurality of an estimated 60,000 to 85,000 medical tourists were traveling to the United States for the purpose of receiving in-patient medical care. [11][

In short, the number of people going outside the US for health care is at least 10 times greater than the number of people coming here and the gap is growing.

Status of the USA current- (sort of) Free Market Before the ACA

The US health insurance system is in trouble.

  • The private employer-based system is providing less and less insurance coverage over time due to loss of employment and coverage is declining in smaller employer groups.
  • The public coverage system costs are growing rapidly due to population aging and cost increases.
  • Health care costs are growing much larger in the US than any other developed country in the world.
  • In the US, 63% of uncompensated care is provided by hospitals, the balance by physicians, clinics and other sources. In most cases. “uncompensated” care ends up being paid for by taxpayers.

Small businesses pay more and get less.

  • Large employers get a large tax subsidy due to insurance premium deductibility at higher marginal tax rates than small employers or individuals. For example, the after tax cost for a corporation in a combined tax bracket of 40% pay about $6300 after taxes per family for coverage, while a small business owner in a 15% bracket pays $8925 for the same coverage, or a difference of $2625, 40% more than a large employer per family. For simplification purposes, this calculation assumes the same cost per family, which of course is not true, small business pay more for coverage, see next point.
  • Small insurance pools pay higher rates than large pools in general because of the risk spread across fewer people. Again small businesses are affected very negatively. Per the US government, small businesses pay up to 18 percent more per worker than large firms for the same health insurance policy [17].
  • Employer-based coverage reduces mobility and makes it much harder to start a small business in the USA. One study shows that 75% percent of employees view health insurance as a major job selection factor. This can make it very difficult to hire employees in a small company and makes it very difficult to start a business as well. [18]

What about other solutions?

  • What is (was) the Wyden-Bennett Healthy Americans Act? Much more like the German model, with required universal payments made to the federal government under a Medicare-like system, but implemented through private insurers. Had joint bi-party sponsorship, but most Republican sponsors have been unwilling to push for it in election years. Republicans are now attacking the proposal as a “federal takeover of the health care system”, “affront to liberty” etc. even though they were the ones that first proposed the legislation.
  • Other than Republican-led efforts opposing the ACA and attempting to eliminate Medicare there are no significant federal level bills proposed at this time.
  • Some states are going further than Dallas in providing universal coverage and lowering costs, this could leave Dallas at a significant disadvantage down the line.

The Affordable Care Act (ACA) – tax credits and other notes

One benefit of the ACA is a potential tax credit for up to 35% (50% after 2014) of the amount an employer pays for health insurance. The credit can be used for two years only and is phased out as wages go to 50 thousand per employee per year and as employment increases toward 25. [21]

Another benefit is a mandate to provide for patient-centered outcomes research and physician quality reporting initiatives. [22]. As noted in the earlier discussion on the medical practices of other countries, this research is the foundation of evidence-based medicine which in turn has proven to reduce costs.

Discussion Questions

Here are guiding questions and concerns that helped us focus our research efforts and reach our conclusions-

  • What are the effects of health care on Dallas small businesses?
  • What are the major drivers of the rise in health care spending? How will the ACA affect these areas?
  • How can health care be made more affordable without limiting access to necessary care?
  • What role should government play in controlling increases in the cost of care and the cost of health coverage? What different choices do state and federal policymakers have in containing costs?
  • What is the responsibility of individuals in the cost of their care? Are health savings accounts and high deductible insurance policies an approach that should be expanded? What are the concerns for low-income individuals?

Exhibit 1 – The Uninsured within the USA by State

As of 2009[update], the five states with the highest estimated percentage of uninsured are, in order, TexasFloridaNew MexicoNevada, and Georgia. The five states with the lowest estimated percentage of uninsured for the same year are, in order, MassachusettsHawaiiMinnesotaWisconsin, and Vermont. These rankings for each year are highlighted below.[3]

Percent uninsured (all persons) by state, 1999–2009

Division

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

United States

14.0

13.7

14.1

14.7

15.1

14.9

15.3

15.8

15.3

15.4

16.7

Alabama

13.0

12.7

12.5

12.2

13.2

12.5

14.5

15.2

12.0

11.9

16.9

Alaska

18.3

18.3

15.5

18.5

18.7

16.5

17.2

16.5

18.2

19.8

17.7

Arizona

19.6

16.0

17.5

16.3

16.7

16.7

19.6

20.9

18.3

19.5

19.6

Arkansas

13.6

13.8

15.8

16.0

17.1

16.2

17.5

18.9

16.1

17.8

19.2

California

19.1

18.1

19.1

17.7

17.9

18.0

18.8

18.8

18.2

18.6

20.0

Colorado

15.3

13.8

14.9

15.1

16.6

15.9

16.6

17.2

16.4

15.9

15.3

Connecticut

8.5

9.3

9.5

9.8

10.1

10.9

10.9

9.4

9.4

10.0

12.0

Delaware

9.4

8.9

8.9

9.4

10.4

13.3

12.2

12.1

11.2

10.8

13.4

District of Columbia

14.0

13.6

12.1

12.5

13.7

12.3

13.2

11.6

9.5

10.0

12.4

Florida

17.8

17.0

17.0

16.7

17.5

19.4

20.2

21.2

20.2

20.0

22.4

Georgia

14.5

14.1

15.8

15.7

16.0

16.9

18.3

17.7

17.5

17.8

20.5

Hawaii

9.9

9.1

9.2

9.8

9.5

8.3

8.6

8.8

7.5

7.8

8.2

Idaho

18.0

15.0

15.6

17.3

18.1

14.5

14.8

15.4

13.9

15.6

15.2

Illinois

12.8

13.3

13.1

13.5

13.9

13.0

13.7

14.0

13.4

12.9

14.8

Indiana

9.0

10.8

11.2

12.3

12.9

13.8

13.6

11.8

11.4

12.3

14.2

Iowa

6.9

8.4

7.4

9.0

10.9

9.2

8.3

10.5

9.3

9.5

11.4

Kansas

11.4

10.3

10.9

9.9

10.3

10.7

10.3

12.3

12.7

12.1

13.3

Kentucky

12.3

13.0

11.5

13.1

13.1

13.6

12.3

15.6

13.6

16.0

16.2

Louisiana

21.1

17.3

18.2

17.8

19.5

16.0

17.7

21.9

18.5

20.1

16.0

Maine

10.8

10.6

10.1

11.0

10.0

8.9

10.3

9.3

8.8

10.4

10.2

Maryland

10.4

9.7

11.7

12.3

13.3

13.4

13.4

13.8

13.7

12.1

14.0

Massachusetts

8.9

8.4

7.6

9.5

10.2

11.3

9.2

10.4

5.4

5.5

4.4

Michigan

9.7

8.5

9.8

10.9

10.2

11.1

10.3

10.5

11.6

11.7

13.8

Minnesota

6.7

7.5

7.5

7.4

8.3

8.5

7.9

9.2

8.3

8.7

8.8

Mississippi

15.2

12.9

16.0

16.1

17.6

16.7

16.9

20.8

18.8

17.9

17.6

Missouri

6.2

9.3

9.5

11.1

10.8

11.9

11.7

13.3

12.6

12.6

15.3

Montana

17.5

16.4

13.3

14.6

18.9

18.2

15.6

17.1

15.6

16.1

15.4

Nebraska

9.2

8.3

8.7

9.5

10.5

10.4

10.5

12.3

13.2

11.9

11.5

Nevada

18.3

16.4

15.4

19.4

18.2

18.4

17.1

19.6

17.2

18.8

20.8

New Hampshire

8.6

8.0

9.0

9.5

9.7

10.1

9.7

11.5

10.5

10.2

10.5

New Jersey

11.7

11.7

12.7

13.4

13.4

13.9

14.5

15.5

15.8

14.1

15.8

New Mexico

24.1

23.7

20.2

20.6

21.9

19.8

20.3

22.9

22.5

23.7

21.7

New York

15.1

16.0

15.0

15.3

14.7

12.6

13.0

14.0

13.2

14.1

14.8

North Carolina

13.5

13.1

13.7

16.4

16.9

14.8

15.3

17.9

16.4

15.4

18.0

North Dakota

10.8

10.7

8.8

10.0

9.7

10.1

11.0

12.2

10.0

11.8

10.7

Ohio

9.7

10.7

10.7

11.1

11.5

10.6

11.4

10.1

11.7

11.5

14.3

Oklahoma

15.5

18.4

17.6

17.0

20.0

19.2

17.9

18.9

17.8

14.0

18.1

Oregon

13.3

12.2

12.5

14.1

16.5

16.3

15.6

17.9

16.8

16.3

17.7

Pennsylvania

7.7

8.0

8.7

10.5

10.7

10.9

9.7

10.0

9.5

9.9

11.4

Rhode Island

6.2

7.1

7.4

9.4

9.9

10.3

11.5

8.6

10.8

11.8

12.3

South Carolina

14.8

11.9

11.8

12.1

13.7

14.8

17.3

15.9

16.4

15.8

17.0

South Dakota

10.1

10.5

8.7

10.9

11.4

11.2

11.7

11.8

10.1

12.5

13.5

Tennessee

9.5

10.4

10.5

10.4

12.7

13.1

13.6

13.7

14.4

15.1

15.4

Texas

22.1

22.4

23.2

25.4

24.0

24.2

23.6

24.5

25.2

25.1

26.1

Utah

12.9

11.5

14.2

12.7

12.3

13.3

16.4

17.4

12.8

13.2

14.8

Vermont

10.3

8.3

9.1

10.3

9.2

10.5

11.5

10.2

11.2

9.2

9.9

Virginia

12.1

10.7

9.9

12.7

12.5

13.4

12.8

13.3

14.8

12.4

13.0

Washington

13.3

13.2

13.0

13.9

15.3

12.4

13.3

11.8

11.3

12.4

12.9

West Virginia

15.1

13.9

12.8

14.3

16.4

16.1

16.9

13.5

14.1

15.0

14.0

Wisconsin

9.5

7.5

7.3

9.4

10.5

10.1

9.3

8.8

8.2

9.6

9.5

Wyoming

14.4

15.3

14.9

16.8

15.1

12.8

14.6

14.6

13.6

13.6

15.8

[1] Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, National Health Care Expenditures Data, January 2012.

[2]Martin, A.B. et al. January 2012. Growth in US health spending remained slow in 2010; Health share of gross domestic product was unchanged from 2009.Health Affairs 31(1): 208-219.

[3]“Income, Poverty, and Health Insurance Coverage in the United States: 2009.” U.S. Census Bureau. Issued September 2010.

[4] “OECD Health Data 2011” http://www.oecd.org/dataoecd/46/2/38980580.pdf

[5] Catherine Hoffman, Karyn Schwartz, Jennifer Tolbert, Allison Cook and Aimee Williams, “The Uninsured: A Primer”Kaiser Family Foundation, October 2008

[6] http://www.health.state.mn.us/news/pressrel/2012/uninsured030612.html

[7] http://www.denverpost.com/recommended/ci_12523427

[8] OECD Health Data 2008: How Does Canada Compare” (PDF). http://www.oecd.org/dataoecd/46/33/38979719.pdf.

[9] http://content.healthaffairs.org/content/21/3/19.full

[10] Americans look abroad to save on health care: Medical tourism could jump tenfold in next decade,” The San Francisco Chronicle, August 3, 2008

[11] Fred Hansen, A revolution in health careInstitute of Public Affairs review article (January 2008).

[12]https://www.mckinseyquarterly.com/Health_Care/Strategy_Analysis/How_Germany_is_reining_in_health_care_costs_An_interview_with_Franz_Knieps_2534

[13] http://www.dhs.state.mn.us/main/groups/agencywide/documents/pub/dhs_id_016338.pdf

[14] http://www.americanprogressaction.org/issues/2009/03/pdf/cost_shift.pdf

[15]http://www.in.gov/fssa/hip/2337.htm

[16] http://en.wikipedia.org/wiki/Cost-shifting

[17] http://www.whitehouse.gov/administration/eop/cea/Health-Care-Reform-and-Small-Businesses

[18] http://www.ux1.eiu.edu/~lsghent/obrien.pdf

[18] http://en.wikipedia.org/wiki/Massachusetts_health_care_reform

[19} US Bureau of Labor Statistics

[20} http://www.washingtonpost.com/wp-srv/politics/documents/american_journal_of_medicine_09.pdf – bankruptcy stats

[21]http://insurance.about.com/od/HealthIns/a/Small-Business-Tax-Credits-Under-The-Aca-Examined.htm

[22] http://www.bio-medicine.org/medicine-news-1/Evidence-based-medicine-in-health-care-reform-86104-1

[23] http://www.scribd.com/doc/128047910/The-Impact-of-the-ACA-and-the-Exchange-on-Minnesota-Updated-Estimates

[24]http://commonhealth.wbur.org/2012/01/report-emergency-department-visits-down-for-first-time-since-health-reform

[25] http://www.oregon.gov/OHA/OHPR/docs/OHPR_headline_Apr2012.pdf