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Improving Coverage and Access: State Activities Overview

This overview examines state activities aimed at improving health insurance coverage and access, including coverage changes among working-age adults and reasons for employee insurance loss. It also explores the variation in uninsured rates by state and different strategies to improve coverage and access. The text language is English.

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Improving Coverage and Access: State Activities Overview

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  1. <!--PICOTITLE=“Improving Coverage and Access: An Overview of State Activities”--> <!--PICODATESETmmddyyyy=09202006--> Improving Coverage and Access: An Overview of State Activities W. David Helms, President & CEO AcademyHealth November 18, 2006

  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. Health Insurance Coverage Changes Among Working-Age Adults, 2000-2004 17.9 20.6 5.6 5.8 8.6 10.5 67.9 63.1 Note: Data taken from Kaiser Commission on Medicaid and the Uninsured/Urban Institute, Health Insurance Coverage in America, 2004 Data Update. November 2005.

  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 1999–2000 2004–2005 NH NH ME WA NH VT ME WA VT ND MT ND MT MN MN OR NY MA WI OR MA NY ID SD WI RI MI ID SD RI WY MI CT PA WY NJ CT IA PA NJ NE IA OH DE IN NE OH NV DE MD IN IL NV WV UT VA IL MD CO DC WV UT VA KS MO KY CA CO DC KS MO KY CA NC NC TN TN OK SC AR OK AZ NM SC AR AZ NM MS GA AL MS GA AL TX LA TX LA FL FL AK AK 23% or more HI HI 19%–22.9% 14%–18.9% Less than 14% 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. Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

  6. WA NH ME VT MT ND MN OR WI NY MA ID SD MI RI WY CT PA IA OH NE DE NV IN IL MD UT VA CO DC CA KS MO KY NC TN OK AR SC NM AZ AL GA MS TX LA FL States Vary in Employer Coverage Quartile Rank Less than 50 % 50% to 53 % 54% to 59 % More than 59 % Adapted from Kaiser Family Foundation Source: Urban Institute and KFF estimates from 2005, 2006 CPS supplement

  7. WA NH ME VT MT ND MN OR WI NY MA ID SD MI RI WY CT PA NJ IA OH NE DE NV IN IL MD WV UT VA CO DC CA KS MO KY NC TN OK AR SC NM AZ AL GA MS TX LA FL AK States Vary In Quality of Care Quartile Rank First Second Third Note: State ranking based on 22 Medicare performance measures. 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.

  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

  10. Comprehensive Efforts Massachusetts Maine Vermont

  11. Uninsured in Massachusetts and Colorado Massachusetts Colorado • Currently Insured • Employer, individual, Medicare or Medicaid 93 % 83 % Currently Uninsured 7 % 17 % < 100 FPL 23 % 23 % 100 % - 300 % FPL 32 % 50 % > 300 % FPL 44 % 28 % Note: Based on August 2004 Division of Health Care Finance statewide survey Colorado data from Colorado Health Institute Profile of the Uninsured 2004

  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 Matters Conservative-SpeakLiberal-Speak Personal Responsibility Individual Mandate Insurance exchange Purchasing Pool Basic Health Insurance Barebones Policies Reasonable cost-sharing High Deductibles Costly Mandated Benefits Essential Benefits Employer Assessment Employer Fair Share Quality 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 Dirigo Health: Affordable Premiums for Workers in Small Firms Dirigo Health: Reduced Employee Contributions for Workers in Small Firms MaineCare Expansion MaineCare

  17. Access: DirigoChoice Individual Premiums General Funds Year 1 • New Insurance product offered by Anthem DirigoChoice Small Employers, Individuals, Self-employed Employer Premiums Medicaid Savings Offset Payment in Year 2 Premium Subsidy < 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 • 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 State Reinsurance Fund 90% Carrier 10% Carrier 100% Carrier 100% $ 0 $5,000 $75,000

  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 4% 13% 35% 8% 55% 92% 14% 79% 15% 52% 30% 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 $355 estimate per person New Mexico Human Services Department

  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 PopulationServed by Health Centers, 1990-2005 Percent Increase Uninsured Served by Health Centers (6.4 million; 128% increase since 1990) All Uninsured (47 million; 34% increase Since 1990) SOURCE: Data from 1996-2005 UDS; National estimates from Bureau of the Census. 1990 1995 2000 2005

  34. Growth of Health Centers: 1970-2005 952 Centers 150 Centers 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

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