Michigan’s top health care priority: Insuring the uninsured

Michigan’s top health care priority:Insuring the uninsured Rick Murdock Michigan Association of Health Plans

Michigan Association of Health Plans • Industry voice for 19 health care plans • Members cover over 2.4 million Michigan residents • Our mission: Advocate for health care that is • High quality • Affordable • Accessible

MAHP Agenda for Michigan • Don’t fix what’s not broken • Don’t fix what people don’t want fixed • Fix what people do want to fix • Fix what policymakers agree needs to be fixed

Don’t fix what’s not broken • How would you rank the quality of your health insurance today? • Excellent 35% • Good 37 • Fair 15 • Less than fair 4 • Poor 3 Statewide MAHP commissioned phone survey, 600 likely voters, 9/13-17, 2009 72 percent of people consider their health insurance excellent or good

Fix what people want fixed • Do you support or oppose making it a priority to give every single Michigan citizen quality and affordable healthcare? • Strongly support 47% • Somewhat support 24 • Somewhat oppose 13 • Strongly oppose 13 71 percent support giving all quality health care

Fix what policymakers know needs to be fixed • About 1.1 million uninsured • Drives up health care cost for all • Still get health care • Often at expensive emergency rooms • Uncompensated care = Cost shifting • Average family paying $1,000/year due to uncompensated care • Getting more people into managed care can mean lower costs for all

Who benefits by covering uninsured? • The uninsured • Businesses who are paying $1,000/covered family in hidden taxes for uncompensated care caused by state and federal policies • Hospitals and physicians who are covering the uninsured today

Far more uninsured than in individual market

Characteristics of smart expansion of insurance to uninsured • Create a level playing field for all insurers • More competition is good for all consumers • Consumer-centric • Serving greater public good not one interest • Take pressure off of other insurers (cross-subsidy, uncompensated care)

Characteristics of smart expansion of insurance to uninsured • All interest groups have a stake in its implementation (Pay/Play) • Advances competition on quality and performance • Must provide certainty of coverage, costs, and responsibility.

Characteristics of smart expansion of insurance to uninsured • Maximize use of Medicaid/MiChild (Preserving safety net) • Established programs • History of working well • Need to ensure all people who are eligible are in these programs • Let’s federal government share costs

MAHP and consumer groups agree • Standard benefits package • All carriers required offer, limited by market share • Low income subsidized in some fashion • Consistent treatment of pre-existing conditions by all carriers • Goal is to limit gaming of system • But still ensure those in need can get care

MAHP and consumer groups agree • Subsidize by combination of government & private sector • Reinsurance options/pools

Policy changes needed • Boost Medicaid coverage by maximizing federal support • Need to increase state match substantially • Use existing $ now allocated toward uninsured • Establish consensus on other revenue sources including self insured and insured • Small investment to dramatically cut $1,000 “hidden tax” that all commercial subscribers paid today

For those not eligible for Medicaid • Require all carriers to offer the same basic benefit packages • Include doctor visits • Some level of hospitalization • Smart use of pharma • Smart use of copays • High copay for ER • No copay for maintenance drugs (Value based purchasing)

For those not eligible for Medicaid • Subsidize so not pay more than 10 percent of income for coverage • Subsidy comes from same sources used for Medicaid full funding

For those not eligible for Medicaid • Provide for key consumer protections • Guaranteed issue proportional to market share • 6 month limit on pre-existing conditions and other consumer protections agreed to in both House and Senate discussions

Number of technical issues • Must have level playing field on provider payments • If companies can negotiate different rates, system falls apart • Need reinsurance plan—what level or attachment point • How much hospitalization? • Annual cap? These can be worked out if broad plan adopted

This plan can work • Creates competition • Many companies offering similar product • Maximizes federal dollars • Feds willing to pay $1.71 for every $1 state pays • Provides consumer protections • Lessens problems of individual market • Cuts cost of uncompensated care • Cuts hidden tax now imposed on all insured

Concepts being explored by Legislature • Sen. Tom George, Rep. Marc Corriveau issue their plans—both Chairs communicating issues with each other • Many pieces of MAHP/consumer proposal in both • Helping them to work out differences • Hope to see resolution this year

Other reforms • Recognize some regulatory reform needed • Make it easier for carriers to bring products to market • Accelerated rate approval process for all carriers • This prevents rate shocks • Increases competition • Preserving appropriate regulatory oversight

Michigan’s top health care priority: Insuring the uninsured