This document provides a summary of key points from a presentation on health reform given by Grace-Marie Turner of the Galen Institute. The presentation discusses Americans' mixed views on the Supreme Court decision on the ACA, criticisms of the individual mandate, projections that the law will increase costs and the number of uninsured, and concerns of physicians and the impact on Medicare. It also covers next steps in legislation, regulation, and the legal and political environment in 2012.

1. A not-for-profit
health and tax policy
research organization
Health Reform:
What it means.
What’s next?
Grace-Marie Turner
May 24, 2012
MedStar Montgomery Medical Center
/GalenInstitute
www.galen.org

7. Americans’ views
of Supreme Court decision
• 25% think the law should be upheld in full
• 38% would like the entire law thrown out
• 29% would like the court to strike down the
individual mandate
• 39% support health care overhaul in general
Source: Washington Post-ABC News Poll, April 8, 2012, http://www.washingtonpost.com/wp-srv/politics/polls/postabcpoll_04082012.html.

8. “The mandate was a mistake”
“Democrats managed to get themselves the
worst possible result: a law that enflames the
opposition on the basis of overreaching federal
power but may not work in practice because
there is no real power behind it.
Whether or not the Court strikes it down, the
individual mandate has been one of the
most serious political and policy mistakes
of recent decades.”
Source: Princeton Professor (and ObamaCare advisor) Paul Starr, “The Health Care Mandate Really Was a Mistake,” January 2, 2012, The New
Republic, http://www.tnr.com/article/politics/99072/the-health-care-mandate-really-was-mistake.

9. Overwhelming majorities
say ObamaCare will
Increase: taxes,
the federal deficit,
premiums, and
health care costs,
and will
decrease quality of care
www.galen.org

10. Do you think the health care reform plan that
Congress passed recently will increase, decrease,
or have no effect on each of the following:
Taxes
Federal Deficit
Health Care Costs
Insurance Premiums
Health Care
Quality
Source: AM&A, Resurgent Republic 1st Anniversary Survey of Likely Voters, April 25-27, 2010

11. Americans satisfied with own care
• 82% ― Their health care is good to excellent
• 45% ― U.S. has world‟s best health system
• 51% ― Major problems, needs major changes
• 18% ― System in crisis, needs major overhaul
Robert J. Blendon, Sc.D., Drew E. Altman, Ph.D., John M. Benson, M.A., Mollyann Brodie, Ph.D., Tami Buhr, A.M., Claudia Deane, M.A., and
Sasha Buscho, B.A., "Voters and Health Reform in the 2008 Presidential Election," The New England Journal of Medicine, November
6, 2008, at http://content.nejm.org/cgi/content/full/359/19/2050.

12. Americans agreed on goals for health reform…
• The U.S. needs health reform to:
– make coverage more affordable
– assure quality, and
– expand access to insurance
• Most people rate their own coverage as
good or excellent
• They want stability. Change is for
others.
www.galen.org

13. Early provisions of the new health law
• “Free” preventive care
• Allowing “children” up to age 26 on
parent’s policies
• No annual or lifetime limits on coverage
• Pools for pre-existing condition policies
• $250 for seniors with high drug costs
• Insurance regulations and mandates
www.galen.org

14. What it really does
• Significant new federal control over health
insurance and medical practice
• At least 159 new programs and agencies
• Mandates on citizens, employers, & states
• $552 billion in new taxes and penalties
• $575 billion from Medicare
www.galen.org

17. The new health overhaul law
A vast expansion of subsidized insurance
• “32 million” more to get health coverage
– 16 (or 25?) million through Medicaid
– 16 (35+?) million through federally subsidized
private insurance exchanges
• 87 million on Medicaid this decade
• 23 million remain uninsured
www.galen.org

18. The health law’s main features
• Expands coverage to 30 million uninsured
• A new system of Exchanges created to deliver subsidies
• States required to expand Medicaid
• Citizens required to purchase approved health insurance
• Most employers required to offer coverage
• Significant new federal regulation of the health sector
(with 159 new regulatory agencies and programs)
• Medicare changes
Financed by
• $575 billion in payment reductions to Medicare
• $550 billion new taxes and penalties
www.galen.org

19. New taxes and fees in the health law

20. Studies show law fails to meet goals
• Health costs and health spending increase
• One-third of businesses may drop insurance
• Young people worried about high cost of
policies
• Doctors concerned about Medicaid
expansion and fraying the safety net
• Seniors are concerned about access to care
through Medicare and Medicare Advantage
• Up to 25 million will remain uninsured
www.galen.org

21. Independent Studies
Obama administration actuary Rick Foster:
• $120 billion in fines for companies and individuals
• Government spending will increase by $311 billion
• Many on Medicare will have trouble getting care
CBO:
The law will raise some family premiums by
$2,100 in 2016 above what they would have
been without the reform law
Richard S. Foster, Chief Actuary, “Estimated Financial Effects of the Patient Protection and Affordable Care Act, as Amended,” U.S. Department of Health and Human
Services, Centers for Medicare & Medicaid Services, Office of the Actuary, April 22, 2010, www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf.
Congressional Budget Office and the Joint Committee on Taxation, “An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act,”
November 30, 2009, www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf.
www.galen.org

22. Higher Costs
• Insurance rising 9% to $15,000/yr. in 2011
• Foster: “False more so than true” that law will
lower costs for taxpayers
• Latest CBO cost estimate: $1.76 trillion/10 yrs.
• Gruber: Premiums up to 30% higher than
without the law
Congressional Budget Office and the Joint Committee on Taxation, “An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable
Care Act,” November 30, 2009, www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf. Chief Medicare Actuary on President's health care claims: "I would
say false, more so than true,“ House Budget Committee, January 26, 2011, http://www.youtube.com/watch?v=XC9rhGWJA2w. “2011 Employer Health Benefits
Survey,” Kaiser Family Foundation/Health Research & Educational Trust, September 27, 2011, http://www.kff.org/insurance/092311nr.cfm.

23. More could drop coverage
As many as 30 – 40 million Americans
are likely to drop coverage and pay the
fine instead
23 million still will be uninsured under
ObamaCare‟s best estimates
Amita Parashar, "Checking In With Dr. Robert Kocher On Who Might Stay Uninsured In Spite of the Individual Mandate," Kaiser Health News, December
20, 2010, http://www.kaiserhealthnews.org/Checking-In-With/kocher.aspx. Richard S. Foster, Chief Actuary, “Estimated Financial Effects of the Patient Protection
and Affordable Care Act, as Amended,” U.S. Department of Health and Human Services, Centers for Medicare & Medicaid Services, Office of the Actuary, April
22, 2010, www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf.
www.galen.org

24. “If you like your health insurance…”
• 51 to 80% of Americans will lose current
coverage, according to Obama admin. estimates
• CBO: Up to 20 million could lose job-based plans
• McKinsey: Up to 80 million will be forced to
change policies
• Child-only policies will vanish in 17 states
• 35 million more will move from job-based
insurance to taxpayer-subsidized exchanges
“Fact Sheet: Keeping the Health Plan You Have: The Affordable Care Act and „Grandfathered‟ Health Plans,” U.S. Department of Health and Human
Services, HealthReform.gov, http://www.healthreform.gov/newsroom/keeping_the_health_plan_you_have.html.
"CBO and JCT's Estimates of the Effects of the Affordable Care Act on the Number of People Obtaining Employment-Based Health Insurance," Congressional Budget Office, March
2012, http://www.cbo.gov/publication/43082.
Shubham Singhal, Jeris Stueland, and Drew Ungerman, “How US health care reform will affect employee benefits,” McKinsey Quarterly, June
2011, www.mckinseyquarterly.com/Health_Care/Strategy_Analysis/How_US_health_care_reform_will_affect_employee_benefits_2813.
“Health Care Reform Law‟s Impact on Child-Only Health Insurance Policies,” Senate Committee on Health, Education, Labor and Pensions, August
2, 2011, http://www.help.senate.gov/imo/media/doc/Child-Only%20Health%20Insurance%20Report%20Aug%202,%202011.pdf.
Douglas Holtz-Eakin and Cameron Smith "Labor Markets and Health Care Reform: New Results," American Action Forum, May
27, 2010, http://americanactionforum.org/sites/default/files/OHC_LabMktsHCR.pdf.
www.galen.org

26. The AMA and practicing physicians
• The SGR Medicare payment fix was its
key bargaining chip
• The chance for a permanent fix is
missed; the president got the AMA
endorsement for an empty promise
• Budget concerns in the Congress mean
short-term fixes are likely to continue
www.galen.org

27. Physician concerns
• Questions about Accountable Care
Organizations
• Authority of HHS Secretary to set new
rules for quality of care
• Regulatory requirements that make
private practice much more difficult
• More burdensome record-keeping
www.galen.org

28. Anna Wilde Mathews, “When the Doctor Has a Boss,”, The Wall Street Journal Nov.
8, 2010, http://online.wsj.com/article/SB10001424052748703856504575600412716683130.html.

29. CRS previews impact of health law on physicians
PPACA has the potential to change fundamental aspects of how physicians
organize, practice, and deliver care in the future.
• Some of these provisions create new structures and entities, like the
CMS Center for Medicare and Medicaid Innovation and the
Patient-Centered Outcomes Research Institute
• Others seek to develop alternatives to traditional fee-for-service
payment, such as the National Pilot Program on Payment Bundling, the
shared savings program (including the accountable care organization, or
ACO, model), or the value-based payment modifier under the physician
fee schedule
In the long run, these provisions combined have the potential to be the most
substantial of the PPACA and the Reconciliation Act modifications affecting
physicians and related providers.
Patricia A. Davis, Jim Hahn, Paulette C. Morgan, Julie Stone, and Sibyl Tilson, “Medicare Provisions in the Patient Protection and Affordable Care
Act, (PPACA): Summary and Timeline,” November 3, 2010, http://www.politico.com/static/PPM191_timeline.html.

30. Specific changes to watch
• IPAB — the Independent Payment
Advisory Board
• Patient-Centered Outcomes Research
Institute
• Physician Quality Reporting Initiative
www.galen.org

31. Action items
• Government requirements for use of
EMR
• Comparative effectiveness “guidelines”
• Payment policies that penalize those
with the top 10% of charges
www.galen.org

32. Predictions of the Medicare actuary
Under current law, CMS actuary Richard Foster
says Medicare is on track to pay physicians less
than Medicaid does, and this would lead to “severe
problems with beneficiary access to care.”
He predicts many Medicare providers will go
bankrupt if policies are unchanged. More than 40%
eventually would end up “shifting to negative profit
margins” and will either go out of business or stop
seeing Medicare patients altogether.
“House Budget Committee Hearing Highlights,” House Budget Committee, July 13, 2011, http://paulryan.house.gov/News/DocumentSingle.aspx?
DocumentID=251972. “Statement of Actuarial Opinion,” 2011 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal
Supplementary Medical Insurance Trust Funds, The Boards of Trustees, Federal Hospital Insurance and Federal Supplementary Medicare Insurance Trust Funds,
May 13, 2011, https://www.cms.gov/ReportsTrustFunds/downloads/tr2011.pdf.

33. “I paid for my Medicare!”
Consider this…
A couple retiring today with both spouses
earning an average wage throughout their
careers would have paid $109,000 in total
Medicare payroll taxes during their lifetimes.
Yet the expected spending by Medicare on
the couple will be $343,000.
C. Eugene Steuerle and Stephanie Rennane, "Social Security and Medicare Taxes and Benefits Over a Lifetime," Urban Institute, June
2011, http://www.urban.org/UploadedPDF/social-security-medicare-benefits-over-lifetime.pdf.

34. Medicare’s Cash Shortfall
• In 2011, Medicare spent $549.1
billion on medical services for
America‟s seniors but only collected
$260.8 billion in payroll taxes and
monthly premiums
Medicare deficit in 2011:
$288.3 billion

35. Medicare is becoming a black hole,
and we must start now to fight its gravitational pull

36. Push-back coming from
• Doctors and patients
Losing control over medical decisions
• Small businesses and big employers
New taxes, penalties, and mandates
• States
Higher costs for Medicaid
• Consumers
Higher costs for insurance and fewer choices
• Seniors
Cuts to Medicare
www.galen.org

37. Some realities
www.galen.org

38. The health law is not settled policy
• 55% want the health overhaul law repealed
• 51% say it will reduce the quality of care
• 56% object to cuts to Medicare
• Two-thirds say it will increase the national debt
• Just 12% think the bill should go into effect in its
current form
• 60% believe it will increase health costs
• 71% say it will increase taxes
“55% Favor Repeal of Health Care Law,” Rasmussen Reports, December 12, 2011, http://www.rasmussenreports.com/public_content/politics/
current_events/healthcare/december_2011/55_favor_repeal_of_health_care_law. “56% Oppose Medicare Cuts in Health Care Proposal,” Rasmussen Reports, March
19, 2010, http://www.rasmussenreports.com/public_content/politics/current_events/healthcare/march_2010/56_oppose_medicare_cuts_in_health_care_proposal.

39. "The economy, as important as it was, was
not the decisive factor this election. Health
care was…The American people found this
a crime against democracy…they want it
repealed, and this issue is gonna go on and
on."
― Democratic pollster Pat Caddell
Source: Grace-Marie Turner, “Obama's Strategy of Silence,” The American Spectator, September 2011, http://spectator.org/archives/2011/09/12/obamas-
strategy-of-silence.

40. Health care in 2012
• Legislation
Challenges to the law: 1099, CLASS and IPAB
• Regulation
12,000+ pages so far
• Legal
U.S. Supreme Court decision in late June
• Political
2012 campaigns and elections
www.galen.org

41. Europeans going the other way
• Consumerism
• Value of private enterprise
and competition
• Doctor-patient relationship
• Decentralized
decision-making
• NHS reforms
www.galen.org

42. Caution ahead
• Political
criticism, resistance, no
matter what the Court
decides
• Physicians and hospitals
will remain the central
players and your
participation in health
reform will be vital to
successful reform.
Source: http://www.towersperrin.com/tp/jsp/masterbrand_webcache_html.jsp?webc=HR_Services/United_States/
Press_Releases/2007/20070522/2007_05_22.htm&selected=press

43. The future?
• The global move toward
consumerism is real, driven
by greater patient demand
for more control over
decisions.
• Health overhaul is law and
will fundamentally change
the U.S. health sector. But I
believe it will be amended
significantly before 2014.
www.galen.org

44. What we know for sure
Choice
Americans value innovation, diversity, and choice to
accommodate different needs of 300 million people
Focus on the patient
They want doctors and patients, not government, to make
health care decisions
Value in health spending
To realize the promise of personalized medicine and
achieve overall cost saving, we must allow more choice
and competition
www.galen.org

45. Grace-Marie Turner
A not-for-profit
health and tax policy
research organization
Galen Institute
703-299-8900
gracemarie@galen.org
twitter.com/GalenInstitute
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46. Why ObamaCare Is Wrong for America
How does the health care law
drive up costs?
Is your doctor really in charge of
your health care decisions?
Are your Constitutional rights
threatened?
Discover the law’s impact on
your life in a new book from
four nationally recognized
health policy experts
Published by Broadside Books,
an imprint of HarperCollins www.WrongForAmericaBook.com
www.galen.org