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Improving Coverage and Access: An Overview of State Activities
W. David Helms, President & CEOAcademyHealth
November 18, 2006
<!--PICOTITLE=“Improving Coverage and Access: An Overview of State Activities”--><!--PICODATESETmmddyyyy=09202006-->
2
Drivers of State Health Reform Efforts Increasing numbers of uninsured Health insurance becoming increasingly
unaffordable for working families Some states beginning to emerge from
fiscal crisis Lack of national consensus
3
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2004
Uninsured
Private, Non-Group
Medicaid/Other Public
Employer-Sponsored
63.167.9
8.6 10.5
5.6 5.8
17.9 20.6
Note: Data taken from Kaiser Commission on Medicaid and the Uninsured/Urban Institute, Health Insurance Coverage in America, 2004 Data Update. November 2005.
Health Insurance Coverage Changes Among Working-Age Adults, 2000-2004
4
Reasons Why 3.4 Million Employees Lost Insurance Between 2001 and 2005
Employee Take-Up Decline
27%
Employer Sponsorship Decline
48%
Loss of ESI Dependent Coverage—11%
Employee Eligibility Decline—14%
Note: Data taken from “Changes in Employees’ Health Insurance Coverage, 2001-2005”, Kaiser Commission on Medicaid and the Uninsured, October 2006.
5
Percent of Adults Ages 18–64 Uninsured by State
Data: Two-year averages 1999–2000 and 2004–2005 from the Census Bureau’s March 2000, 2001 and 2005, 2006 Current Population Surveys. Estimates by the Employee Benefit Research Institute.
WA
ORID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
ILIN
AR
LA
AL
SCTN
NCKY
FL
VA
OH
MI
WV
PA
NY
AK
MD
MEVTNH
MARI
CT
DE
DC
HI
CO
GAMS
OK
NJ
SD
WA
ORID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
ILIN
AR
LA
AL
SCTN
NCKY
FL
VA
OH
MI
WV
PA
NY
AK
ME
DE
DC
HI
CO
GAMS
OK
NJ
SD
19%–22.9%
Less than 14%
14%–18.9%
23% or more
1999–2000 2004–2005
MA
RI
CT
VTNH
MD
NH
Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006
6
WA
OR
ID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
ILIN
AR
LA
AL
SC
TNNC
KY
FL
VA
OH
MI
PA
NY
MD
MEVT
NH
MA
RI
CT
DE
DCCO
GAMS
OK
SD
States Vary in Employer Coverage
Less than 50 %
More than 59 %
Quartile Rank
50% to 53 %
54% to 59 %
Adapted from Kaiser Family Foundation
Source: Urban Institute and KFF estimates from 2005, 2006 CPS supplement
7
States Vary In Quality of Care
First
Third
Fourth
Source: S.F. Jencks, E.D. Huff, and T. Cuerdon, “Change in the Quality of Care Delivered to Medicare Beneficiaries, 1998–1999 to 2000–2001,” Journal of the American Medical Association 289, no. 3 (Jan. 15, 2003): 305–312.
Second
WA
OR
ID
MT ND
WY
NV
CAUT
AZ NM
KS
NE
MN
MO
WI
TX
IA
ILIN
AR
LA
AL
SC
TNNC
KY
FL
VA
OH
MI
WV
PA
NY
AK
MD
MEVT
NH
MA
RI
CT
DE
DCCO
GAMS
OK
NJ
SD
Quartile Rank
Note: State ranking based on 22 Medicare performance measures.
8
Different Strategies to Improve Coverage and Access Comprehensive approaches
Massachusetts, Maine and Vermont
Incremental Covering children Making new insurance options more
affordable for low-income working uninsured
Improve access through safety net
9
Reactions to Recent State Reforms
New approach presents excitement about what is possible– states want to “avoid being left behind”
This works for that State, but we are different
New idea sparks new creative approaches Fear of over-reaching – sustainability of
initiatives Importance of on-going coalition of support
11
Uninsured in Massachusetts and Colorado
Note: Based on August 2004 Division of Health Care Finance statewide surveyColorado data from Colorado Health Institute Profile of the Uninsured 2004
Currently Insured•Employer, individual, Medicare or Medicaid
Massachusetts
Colorado
93 % 83 %
7 % 17 % Currently Uninsured
< 100 FPL
100 % - 300 % FPL
> 300 % FPL
23 %
32 %
44 %
23 %
50 %
28 %
12
Massachusetts Mandates Individual mandate for all those who can afford - key
implementation question is defining “affordability” Enforcement
Indicate insurance policy number on state tax return Loss of personal tax exemption for tax year 2007 Fine for each month w/out insurance = 50% of
affordable insurance product for tax year 2008 Fair Share Assessment for employers (>10 workers),
$295/FTE Free Rider Surcharge for employers (>10 workers) with
uninsured workers with uncompensated care
Source: Lischko, A. Massachusetts Healthcare Reform. Slides presented at SCI’s Summer Workshop for State Officials, Chicago, IL. August 2006.
13
Massachusetts Connector
Providing small businesses, sole-proprietors, and individuals w/out access to ESI more choices
Pre-tax premium payment options by small business (Section 125 plans)
Allowing portability for consumer Connector is the exclusive administrator of
Commonwealth Care premium assistance Commonwealth Care plans offered exclusively
through Medicaid MCOs for first 3 years (subsidized product)
Source: Lischko, A. Massachusetts Healthcare Reform. Slides presented at SCI’s Summer Workshop for State Officials, Chicago, IL. August 2006.
14
Massachusetts Insurance Market Reforms
Existing Market
Dysfunctional individual market
Limited take-up of HSAs
“Any willing provider”
Bad value for younger adults
•No consequence for lifestyle choices
Hard cut-offs for dependent status
Growing list of mandatory benefits
Optional, smaller risk pools
Reformed Market
Individual/small market merger
More products with HSAs
Value-driven networks
19-26 year-old market
Tobacco usage is a rating factor
More flexible up to 25 years-old
Two year moratorium
Mandatory, larger risk pools Source: Lischko, A. Massachusetts Healthcare Reform. Slides presented at SCI’s Summer Workshop for State Officials, Chicago, IL. August 2006.
15
Massachusetts: Terminology MattersConservative-Speak Liberal-
SpeakPersonal Responsibility Individual MandateInsurance exchange Purchasing PoolBasic Health Insurance Barebones PoliciesReasonable cost-sharing High DeductiblesCostly Mandated Benefits Essential BenefitsEmployer Assessment Employer Fair
ShareQuality Health Insurance Comprehensive
Health Insurance
Source: Lischko, A. Communicating the Policy Choice. Slides presented at SCI’s Policy Analysis Workshop, Virginia, October 2006.
16
Maine’s Dirigo and MaineCare Eligibility
0%
100%
200%
300%
400%
Children Parents Childless Adults
Inco
me
as %
Po
vert
y
MaineCare MaineCare ExpansionExpansion
Dirigo Health: Reduced Employee Dirigo Health: Reduced Employee Contributions for Workers in Small Contributions for Workers in Small
FirmsFirms
MaineCareMaineCare
Dirigo Health: Affordable Premiums for Dirigo Health: Affordable Premiums for Workers in Small FirmsWorkers in Small Firms
17
Access: DirigoChoice
New Insurance product offered by Anthem
DirigoChoiceSmall Employers,
Individuals,Self-employed
MedicaidEmployerPremiums
General FundsYear 1
IndividualPremiums
Savings OffsetPayment in Year 2
PremiumSubsidy
< 300% FPL
18
Employer and Individual Coverage Mandates
Hawaii Prepaid Health Act (1970s) 86% employers offer insurance versus 56% nationally 12% uninsured vs. 18% nationally
Maryland Fair Share Act Court rejected
Massachusetts Employer Assessment & Free Rider Surcharge Individual mandate (affordability is key question)
Vermont Employer Assessment Will consider individual mandate in 2010 if 96% coverage not
achieved
19
Incremental Approaches
Children
Purchasing Pools
Limited Benefits
Reinsurance
Creative Uses of Medicaid
Safety Net
20
Children and AllKids: Illinois
IL – AllKids expansion (July 2006) All uninsured children eligible, sliding scale
premium $45 million estimated cost - financed through
savings from shift to primary care case management (PCCM)
Builds on success and bi-partisan support for SCHIP
Cost effective to cover children Improves outreach to eligible, but unenrolled Other states consider SCHIP Reauthorization due in 2007
21
Purchasing Pools: California PacAdvantage
Longest running and largest health insurance purchasing alliance formed in 1993 Over 100,000 covered lives
Small firms (2-50) able to enroll and offer a choice of private health plans
Evaluations demonstrated that PacAdvantage improved choice of health plans, but was never demonstrated to have expanded coverage
August 2006 - PacAdvantage announced closing due to withdrawal of participating plans
22
Purchasing Pools: Insure Montana
$10 million coverage initiative funded through tobacco tax Tax Credits
40% of overall funding is for tax credits for small business that provide health insurance (tax credit provided on a “first come first serve basis”)
Purchasing Pool – 60% of overall funding is for subsidies for
small businesses that were previously unable to offer coverage on a “first come first serve basis” to assist both employer and employee pay portion of health insurance premium.
Enrollment (Fall 2006) = 360 firms, 2200 lives
23
Lessons Learned: Purchasing Pools
Strategy has generally not expanded coverage to the uninsured
Has improved plan choice for small firms Has not generated significant
administrative savings or price discounts Unless designed carefully, pools can
create adverse risk selection To be effective, need to combine pool with
other strategies such as subsidy or individual mandate
24
Limited Benefit Plans have had Marginal Impact
At Least 13 states have passed limited benefit legislation, 2 states have passed new legislation in 2005
Barebones and other limited benefit plans have had low take-up rates
May lead to currently insured to scale back benefits
May contribute to increased uncompensated care
25
Reinsurance: Healthy New York
20% of people account for 80% of health spending
State subsidizes costs for high cost enrollees with the goal of lowering premiums for all
State requires all HMOs to offer product Some benefits excluded (MH/SA) Small firms w/ low-wage workers, low income
self-employed, uninsured workers w/o access to employer sponsored insurance may enroll
26
Healthy New York Reinsurance Subsidy
$ 0 $5,000 $75,000
Carrier 100%
State Reinsurance Fund 90%
Carrier 10% Carrier 100%
Estimated savings of 50% for individuals Over 125,000 enrolled (8/06)
Most enrollment is non-group State Reinsurance Fund spent $13.3 million in
2003, $34.5 million in 2004, $61.7 million in 2006
27
Early Lessons on Reinsurance: Healthy NY
Requiring HMOs to offer Healthy New York product is less expensive than establishing new program
Perceived efficiency and value of program Getting participation requires long-term partnership
to build trust that coverage will continue to be there While targeting small groups, product has enrolled
mainly individuals and self-employed Must have market oversight to assure lower
premiums
28
Creative Uses of Medicaid
Premium Assistance: 15 states Medicaid/SCHIP pays for employee portion
of existing private insurance Medicaid Buy-In
All-Kids = sliding scale subsidy subsidized by SCHIP
New Insurance Product with a subsidy Subsidy for low income individuals, and
small firms
29
Coverage: Both a Problem of Offer and Take-up
0%
10%
20%
30%
40%
50%60%
70%
80%
90%
100%
<100% 100-199% 200-399% 400%+
Poverty Level
Not offered through own orFamily Member's Employer
Declined offer from Own orFamily Member's Employer
Covered by Own FamilyMember's Employer
30%
15%
55%
52%
14%
35%
79%
8%
13%
92%
4%
Note: Data taken from “Changes in Employees’ Health Insurance Coverage, 2001-2005”, Kaiser Commission on Medicaid and the Uninsured, October 2006.
30
New Medicaid Strategies Address Low Offer Rates
New insurance products for small firms with low-wage workers
Employers, individual and Medicaid pay premium New Mexico – open to uninsured adults <200%
FPL, individuals may pay employer contribution Oklahoma covers workers and spouses <185%
FPL who work for small firms; program begins with voucher; safety-net option will be provided for workers with employers unwilling to participate
Arkansas recently received waiver to offer limited benefit product to small firms, Medicaid funding will be available for low-wage workers (<200% FPL)
31
New Mexico State Coverage Insurance: Public/Private
Partnership
New Mexico Human Services Department
$20
$75
$51
$209
Federal $209State $51Employer $75Employee $20
$355 estimate per person
32
Medicaid’s Changing Role
Use in expanding coverage to the uninsured
Covering different populations, sometimes higher income groups
Increased cost-sharing Changing benefit designs Consumer Responsibility
33
Growth in Uninsured Population
Served by Health Centers, 1990-2005
0%
25%
50%
75%
100%
125%
1990 1995 2000
All Uninsured
(47 million; 34% increaseSince 1990)
Uninsured Servedby Health Centers
(6.4 million; 128% increase since 1990)
Percent Increase
SOURCE: Data from 1996-2005 UDS; National estimates from Bureau of the Census.
2005
34
Growth of Health Centers: 1970-2005
0
5
10
15
20
1970 1980 1990 2000 2005
Millions of Persons Served by Coverage Source
Uninsured Medicaid Private Insurance Medicare
150Centers
952Centers
Source National Association of Community Health Centers
35
Access versus Insurance
Communities with strong insurance coverage and a strong safety net presence demonstrated the highest access to care.
Investment in insurance goes further to improve access to care versus investment in the safety-net.
Insurance expansions and safety-net expansions should be viewed as complements.
Without universal coverage, the safety net is important and some investment in the safety is needed. The question is how much?
Cunningham and Hadley, “Expanding Care versus Expanding Coverage: How to Improve Access to Care,” Health Affairs: July/August 2004
36
Challenges of Community-Based Models
Assuring long-term, sustainable funding Need to address both access and
insurance The safety-net is a delivery system while
insurance is a financing strategy Difficult to design a program to fill gaps in
complex health system
37
Concluding Thoughts
States play critical role in moving the conversations about coverage expansions Testing new ideas (politically and practically) Creating momentum for national policy solution
Catch 22: Often need ambiguous goal to sell new initiatives but need to be realistic about what states can do Given overall fiscal picture, how far can states go?
Comprehensive versus Incremental Sequential = incremental plus a vision
Few states can even approach universal coverage without a federal framework and funding