Mitt Romney/Heritage Health Care Reform Plan

8/2/2019 Mitt Romney/Heritage Health Care Reform Plan

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Massachusetts Health Care Reform:

Governor Mitt Romney

Presentation to the Medicaid Commission

January 26, 2006

Using an 1115 Waiver to Provide PrivateInsurance to the Uninsured and to Contain Costs


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Healthcare reform: Coverage and CostContainment

Insure the uninsured

Contain healthcare costs

HealthcareReform

Medicaid PremiumAssistance

AffordableProduct

E-Health TransparencyMedical

MalpracticeProgramIntegrity


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The Uninsured in Massachusetts

Total Commonwealth Population: 6,400,000

Currently insured (93%)

-Employer, individual, Medicare or Medicaid

5,940,000

Currently uninsured (7%) 460,000

-300 FPL 204,000Affordable Private Insurance

Note: Based on August 2004 Division of Health Care Finance statewide survey


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Current MassHealth


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Through outreach and technology, MA hasenrolled 77,000 Medicaid eligible uninsured

Other

Disabled

Essential

Non Qualified Immigrants(MassHealth Limited)

Familes and Children

New Medicaid enrollees: last 12 months

77K

0

20

40

60

80K

Note: Based on total MassHealth enrollment snapshot data through December 31, 2005.


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Requiring enrollment of Medicaid eligibles isreversing free care utilization trends

Free Care visits and admissions Growth in Free Care charges

FY03 toFY04 Growth

FY05 YTDGrowth

32%

-4%

-10

0

10

20

30

40%

FY03 toFY04 Growth

FY05 YTDGrowth

29%

4%

0

5

10

15

20

25

30%

Note: Based on Uncompensated Care Pool claims data through September 30, 2005.


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5,940,000





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Premium increases are hurting small businessesand may lead some to drop insurance

Annual premium growth small group family plans

2001 2002 2003 2004

11%

9%

17%14%

0

5

10

15

20%


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MA reforms address the crisis for smallbusinesses and individuals

Permits private insurers to offer new, affordable policiesto small businesses and individuals

Reduces cost through pre-tax treatment of premiumpayments

Makes it easier for all businesses to offer insurance totheir contractors and part-time workers

Levels the playing field for small businesses andindividuals who dont work for large companies

Enables individuals to purchase health insurance that is

portable


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Commonwealth Care affordable productsrepresent good value, and are comprehensive

Standard Small Group Affordable Products

Primary care Yes Yes

Hospitalization Yes Yes

Prescription Drugs Yes Yes

Mental Health Yes Yes

Provider network Open Access Defined

Annual deductible First Dollar Coverage $250-$1,000

Co-pays Low ($0,10,20) Moderate ($0,20,40)

Mandated benefits Included

Monthly premium $350+ Less than $200

Exclusions permittedw/ board approval


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Non-offeredIndividuals

SmallBusinesses

SoleProprietors

Non-workingIndividuals

Blue CrossBlue Shield

FallonHarvard Pilgrim

Insurance Exchange

The Exchange/Connector makes it work

Enables tax deductibility for working individuals

Mechanism to reach part-time workers and individuals withmultiple jobs

Eliminates minimum contribution and minimum participation rulesthat make it difficult for small businesses to offer insurance

Insurance portability from job to job

New Entrants

MMCOs

Tufts NHP


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5,940,000





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Contrary to the common perception, thispopulation is eminently insurable

Substantially younger than the average population

Predominantly male and single

Representative of statewide mix of race and ethnicity

82% are high school graduates, of which 15% havecollege degrees

78% are working, with the majority working full-time

Like others, these individuals respond very well toinsurance-like features


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Safety Net Care: Using premium assistanceto make private insurance more affordable

Private health insurance with the same benefits asaffordable insurance products, but with lower co-paysand no deductibles

Monthly premiums set according to a sliding scalebased on individual income, as with SCHIP

Federal Waiver requires that a Safety Net Care

program begin by July 1, 2006 in order to maintainFederal Medicaid funding


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Safety Net Care example

FPL


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Employers will remain the cornerstone forthe provision of health insurance

Existing IRS/ERISA provisions

Existing and new state non-discrimination provisions

Prohibition of indirect measures that circumvent thepurpose of the law

Competition for workers


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The Personal Responsibility Principle

Given Medicaid, premium assistance and affordableinsurance products will be available, all citizens willhave access to health insurance they can afford

In this new environment, people who remain uninsuredwould be unnecessarily and unfairly passing theirhealthcare costs to everyone else

Personal responsibility means that everyone should beinsured or have the means to pay for their ownhealthcare


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Personal Responsibility Principle Provisions

A minimum level of insurance or proof of financialmeans will be required

For those who do not comply:

-Loss of personal tax exemption

-Withholding of a portion or all of income tax refund for deposit ina state personal healthcare expenditure account

-Other penalties are under consideration

For those without coverage that use medical services:

-Self-pay will be required

-If unable to pay, provider may request payment from the statepersonal healthcare expenditure account

-If the bill exceeds the account balance, an appropriate wagewithholding plan will be established

-Other free-rider provisions are under consideration


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Organizing principles for a fully insuredpopulation

Stabilize the small group insurance market and keep smallbusinesses from dropping insurance

Introduce lower-priced, comprehensive health insuranceproducts

Bring younger, healthier people into the risk pool

Create an Exchange to permit pre-tax premium payments

Facilitate the purchase of insurance by part-timeemployees and employees with multiple employers

Promote a culture of insurance and personal responsibility


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Successful passage of healthcare reformlegislation relies upon the MA 1115 waiver

The Waiver commits new funding to MA predicated onthree key conditions:

-MA must achieve benchmarks to lower the uninsured rate

-Funding follows the individual, not the institution

-Elimination of intergovernmental transfers

Federal reimbursement can now be used for premiumassistance for the purchase of private insurance by low-income individuals

Premium assistance payments are paid withdemonstration project and allowable DSH diversionfunding

-First of its kind waiver allows DSH funds to be spent on non-hospital, non-CHC providers


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CMS and the Commonwealth both benefitfrom this proposal

Ensures program integrity

Provides predictability in financial exposure

Money follows the person, not the institution

Improves transparency and accountability

Emphasizes preventive care and appropriate care in anappropriate setting

CMS maintains final approval of how money gets spent


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Healthcare reform: Coverage and CostContainment

Insure the uninsured

Contain healthcare costs

HealthcareReform

Medicaid PremiumAssistance

AffordableProduct

E-Health Transparency MedicalMalpractice

ProgramIntegrity


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Consumer engagement is necessary tocontrol healthcare cost

Transparency Patient Right to Know

-Improve the understanding of price and quality

-Reward efficient, high-quality providers

-Website launched in October

Electronic Medical Records

-Massachusetts E-Health Collaborative pilot to implement electronicmedical record systems in three regions

-$50 million seed investment by Blue Cross/Blue Shield of MAFoundation

Program integrity

-Enhanced DOR income matching capability

-Recent reorganization to strengthen program integrity function

-Deployment of technology for improved provider and utilization review

Medical Malpractice

-Major patient safety legislation to be filed next month


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Patient right to know CABG example

Documents

Mitt Romney/Heritage Health Care Reform Plan