Solutions for the Uninsured

1. Solutions for the Uninsured Karen Davis President, The Commonwealth Fund Second National Medicaid Congress 2007 Washington, DC June 15, 2007 kd@cmwf.org www.commonwealthfund.org

2. What Are the Problems? Uninsured Rates Costs of Care Administrative Complexity Quality of Care Chasm

3. ACCESS: UNIVERSAL PARTICIPATION 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 IN IL MD 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% Uninsured Non-Elderly Adult RateIncreased from 17.8% to 20.5% in Last Five Years;Varies from 11% to 30% Across States 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

4. ACCESS: UNIVERSAL PARTICIPATION 1999–2000 2004–2005 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 IN IL MD 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 16% or more HI HI 10%–15.9% 7%–9.9% Less than 7% Percent of Uninsured Children Declined Since Implementation of SCHIP 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

5. Children’s Enrollment in Medicaid and SCHIP, 1997–2004 Of 6.2 million in SCHIP in 2004: 1.8 million were in Medicaid 4.4 million were in separate programs Millions of children (under age 19) 34.0 32.3 30.8 27.2 25.2 23.5 22.3 21.0 Source: The Commonwealth Fund; Data from Georgetown Center for Children and Families and CRS. Based on children ever-enrolled over the course of a year.

6. Financial Burden for Low- and Middle-Income Families Is Increasing Percent of non-elderly adults spending 10% or more of disposable income on family out-of-pocket medical costs and premiums Note: Financial burden includes out-of-pocket expenditures on premiums for private insurance and other health care services. Source: J.S. Banthin and D.M. Bernard, “Changes in Financial Burdens for Health Care: National Estimates for the Population Younger than 65 Years,” JAMA 296, no. 22 (Dec. 13, 2006): 2712-19.

7. The Solution is in Sight • Extend health insurance to all • Promote effective cost control strategies • Organize the care system • Pursue and raise benchmark levels of high quality, safe, effective, efficient care and enhance system capacity to innovate and improve • Shape a coherent set of health care policies through national leadership and public-private collaboration

8. Building Blocks for Extending Health Insurance to All • Individual mandate • Shared responsibility • Employer financing coverage for workers or contributing to pool; covering young adults under parents’ plans • State and federal financing • Federal/state subsidies to make coverage affordable for low-income individuals and families • Expansion of Medicaid/SCHIP with federal matching • Sliding scale premium subsidies • Pooling insurance risks • State Connector/Health Insurance Exchange • Federal Employees Health Benefit Plan (Congressional Health Plan) • Medicare for All • Quality and Efficiency Provisions

9. Creating Consensus on Automatic and Affordable Health Insurance For All New Coverage for Currently Uninsured 11m 13m 14m 1m Purchasing Pool Congressional Health Plan FEHBP Connector TOTAL = 24 m Employer Group Coverage TOTAL = 165 m CHIP/FHIP TOTAL = 43 m Medicare TOTAL = 38 m 3m 11m 1m 3m Improved Coverage for Underinsured Source: K. Davis and C. Schoen, “Creating Consensus on Coverage Choices,” Health Affairs (Web Exclusive April 23, 2003).

10. Massachusetts Health Plan:Major Innovations • Individual mandate • Shared Responsibility • Employers cover workers or pay $295/employee • Subsidies for affordable coverage • Available to those between 100 and 300% of poverty • MassHealth expansions for children below 300% poverty and adults below 100% poverty • Pooling insurance risks • Commonwealth Care Connector to organize affordable insurance offerings Source: John Holahan, “The Basics of Massachusetts Health Reform,” Presentation to United Hospital Fund, April 2006.

11. Update: Massachusetts Health Care Reform • The state has already signed up more than half of the poorest people who are eligible (122,000 new residents covered during the first year of health care reform) • New plans called Commonwealth Choice went on sale May 1 and go into effect July 1, 2007 • Three tier benefits: basic, value, premium -- deductibles range from $0 to $2,000

12. California Governor’s Proposal:Major Innovations • Individual mandate • Shared Responsibility • Employers cover workers or pay 4% of wages as fee • Subsidies for affordable coverage • Available to those below 250% of poverty • Medi-Cal expansion to all children below 300% poverty and adults below 100% poverty • Pooling insurance risks • Insurance exchange • Guaranteed issue; community rating with age bands • 85% minimum medical loss ratio • Other provisions • Provider fee assessment (2% of physician revenue to 4% of hospital revenues)

13. Maine’s Dirigo Health: Past, Present and Future • No individual mandate • Governor recently proposed • No requirements on employers • Governor recently proposed pay or play • State subsidies for affordable coverage • New insurance product, $1250 deductible; sliding scale deductibles and premiums below 300% poverty • Medicaid expansions • Pooling insurance risks • Dirigo Health Plan: only one insurer participating • Governor recently proposed minimum medical loss ratio

14. No Individual Mandate Shared Responsibility Employer assessment State subsidies for affordable coverage Premium subsidies based on sliding scale up to 300% FPL Pooling insurance risks Catamount Health Plan targets individuals w/o access to work-based coverage Quality and efficiency provisions Comprehensive benefit package including primary care, chronic care, acute care & other services No patient cost sharing for preventive or chronic care services Build upon Wagner’s Chronic Care Model Vermont Health Care Affordability Act Enacted May 2006

15. Prescription for Pennsylvania • Individual mandate for families > 300% FPL; can buy in for the entire premium (expected to be $280 per month) • Shared Responsibility • Employer mandate: 3 percent payroll tax on employers with 50 or more employees that do not provide insurance • Subsidies for affordable coverage • Available to all parents below 300% poverty; sliding scale, low monthly premium ($10-$70) • Employer contribution for employees earning less than the average state wage = $130 per month; employee sliding scale • No pooling of insurance risks

16. Strategies for Extending Health Insurance • Tax incentives for individual insurance (President Bush) • Federal support for state initiatives (Senators Bingaman/ Voinovich; Representatives Baldwin/Price) • Federal financing with regional insurance exchange (Senator Wyden) • Hybrid – regional purchasing pools with Medicare-like option (Senator Edwards) • Hybrid – national purchasing pool based on Federal Employees Health Benefits Program (Senator Obama) • Medicare for All (Representative Stark; Representative Dingell/Senator Kennedy)

17. H.R. 5684: Health Partnership Through Creative Federalism Act • Real cooperation from across the aisle – proposed by Baldwin and Price with the support of both the Heritage Foundation and the Brookings Institute; National Governor’s Association also had role in drafting the bill • Requests that states submit proposals for state health care coverage expansion and improvements in quality, efficiency, cost-effectiveness, and the appropriate use of health information technology • State proposals defined as statewide, multi-state or limited to certain regions • Establishes a Commission to: • Request and review proposals and submit a list it recommends for approval to Congress • Report to the public concerning progress made by states • Make recommendations for minimizing negative effects of state programs on national employer, provider organizations, insurer Rep. Tammy Baldwin (D-WI) Rep. Tom Price (R-GA) Rep. John Tierney (D-MA)

18. S. 2772: Health Partnership Act • Provides states with grants to carry out innovative state health programs, with priority given to programs most likely to expand coverage and improve access • Establishes a Commission to: • provide states with reform options for state health care expansion and improvement programs • establish minimum performance measures and goals with respect to coverage, quality, and cost of state programs • review state applications and determine whether to submit a state proposal to Congress Senator George Voinovich (R-OH) Senator Jeff Bingaman (D-NM)

19. Features of Current Approaches to Quality Affordable Health Coverage for All 1Out of an estimated total uninsured in 2007 of 47.8 million. 2 Estimated to cover 86% of the 23.6 million people projected to be uninsured in the 15 states in 2007. Source: S. R. Collins, K. Davis, and J. L. Kriss, An Analysis of Leading Congressional Health Care Bills, 2005-2007: Part I Insurance Coverage, The Commonwealth Fund, March 2007

20. Strategies for Achieving a High Performance Health System • Align financial incentives • Payment incentives to promote efficient and effective care • Effective cost control strategies • Organize the health care system to ensure accessible and coordinated care • Patient-centered medical home • Integrated delivery systems and multi-specialty group practices • Pursue excellence in safe, effective, efficient care and enhance capacity to innovate and improve • Investing in health information technology and information exchange systems • Better information on provider quality and total costs for episode of care • Spreading best practices and use of benchmark data • Center on Comparative Effectiveness and Evidence-based Decision Making • National leadership and public-private collaboration to achieve coordinated policies, simplification, and enhanced value

21. SCHIP Reauthorization • Senator Kennedy/ Senator Hatch • Increased funds for outreach and simplified enrollment procedures to reach eligible, but uninsured children • SCHIP funds to help cover the cost of health insurance premiums for children in lower-income families with access to employer-sponsored coverage and increased flexibility for states to determine income eligibility levels for their programs • Senator Clinton/ Representative Dingell • Expand SCHIP to children in families with incomes up to 400% of FPL • Employers and parents can purchase health insurance through SCHIP • Senator Rockefeller/ Senator Snowe • Double state allotments to cover children while streamlining the eligibility process • State option to cover pregnant women and children who are legal immigrants • Ease requirements to document citizenship and improve benefits • Strengthen standards to ensure mental health coverage and make dental coverage a guaranteed benefit • Representative Emanuel • Funding for all currently eligible children; tax credits for middle income families to buy coverage • Representative Barton/ Representative Deal • Limit SCHIP funds to coverage of low-income children and pregnant women who live below 200 percent of the poverty level

22. Strong Support for Eligibility Expansions under SCHIP Percent 91 88 82 80 73 51 14 Note: Segments may not sum to totals because of rounding. Source: The Commonwealth Fund Health Care Opinion Leaders Survey, April 2007.

23. Conclusion • SCHIP is a test of Congressional and Administration support for state initiatives in extending health insurance coverage • Health reform will be a major issue in the 2008 presidential election • Business/labor/consumer/senior coalitions beginning to lead the drive for universal coverage • State reforms are pointing the way • Building blocks for universal coverage • Individual mandate • Shared financial responsibility • Expansion of existing programs: • Medicaid/SCHIP • Medicare • Employer coverage (e.g. young adults) • Creation of state or federal purchasing pool • Connector/Health Insurance Exchange • Medicare for All or FEHBP • Will need to address quality and efficiency; achieve savings as well as expand coverage

24. Thank You!Sign up for e-alerts at www.commonwealthfund.org Anne Gauthier, Senior Policy Director Commission on a High Performance Health System ag@cmwf.org Stephen C. Schoenbaum, M.D., Executive Vice President and Executive Director, Commonwealth Fund Commission on a High Performance Health System scs@cmwf.org Cathy Schoen, Senior Vice President, Research & Evaluation, Commonwealth Fund cs@cmwf.org Sara Collins, Assistant Vice President, The Commonwealth Fund src@cmwf.org Rachel Nuzum, Program Officer State Innovations rn@cmwf.org Katherine Shea, Research Associate, Commonwealth Fund ks@cmwf.org