Innovative State Programs Donald Cohn Associate, AcademyHealth Adequate Health Care Task Force

1. Innovative State Programs Donald Cohn Associate, AcademyHealth Adequate Health Care Task Force December 7, 2005

2. Presentation Overview • Populations at risk? • Adults • Small Business • Using Medicaid • Innovative State Programs • Creating a new product • Converting safety net money into coverage

3. Section 1115 Waivers Expand Medicaid Eligibility (1991-1993) Medicaid Eligibility Expanded to Women and Children (1984-1990) SSI Enacted (1972) SCHIP Enacted (1997) Medicaid Enacted (1965) Medicaid Enrollment and Eligibility Milestones, 1965-2005 58 Million Beneficiaries Millions of Medicaid Beneficiaries during year Recession and State Fiscal Crisis (2001-2004) AFDC Repealed (1996) SOURCE: Kaiser Commission on Medicaid and the Uninsured analysis of data from the Centers for Medicare and Medicaid Services, 2004. CBO March 2005 Medicaid Baseline.

4. States Providing Medicaid or Other Coverage to Childless Adults: 2005 AK WA ME MT ND MN VT OR NH ID WI SD NY MI WY IA PA RI NE NV OH IN IL UT WV CO KS VA CA MO KY NC TN AZ OK NM AR SC MS AL GA LA TX FL ** Some programs are small and/or capped enrollment HI Source: SCI Coverage Matrix

5. Using Medicaid • Pros: • Federal Financial Participation • Flexibility allowed in the waiver process • Cons: • Categorical eligibility = A Waiver is required • Budget Neutrality must be demonstrated

6. Policy Goals • Reduce the uninsured • Support or reinforce the private market • Increase the employer offer rate • Slow the decreasing employer offer rate • Avoid “crowding- out” or replacing private dollars with public dollars

7. What Problem are you trying to solve? Different problems require different solutions… • Problem: Coverage offered by employer but worker does not buy Solution: Subsidize employee premium -or- • Problem: Employer doesn’t offer coverage at all Solution: Create affordable product targeting employers and workers

8. For low-income working uninsured, problem is both “offer” and “take-up” SOURCE: Kaiser Commission Medicaid and Uninsured, Key Facts, December 2003

9. Goal of New Mexico’s State Coverage Insurance (SCI) Program • Address New Mexico’s high rate of uninsured and low rate of employer sponsored health care • Create a public/private partnership • Offer affordable health care coverage to low-income working adults through an employer-based system Goal #1 Goal #2 Goal #3 New Mexico Human Services Department 9

10. SCI Is Funded Through a Public/Private Partnership FINANCING: $355 estimate per person New Mexico Human Services Department 10

11. Most co-pays $0, Inpatient stay - $0 per admission Cost Sharing Provisions Designed To Encourage Access Sliding Scale Co-Pays 0-100% FPL 101-150% FPL 151-200% FPL • Most co-pays $5, Inpatient stay - $25 per admission • Most co-pays $7, Inpatient stay - $30 per admission • RX - $3 per prescription – maximum monthly Rx co-pay $12 • Cost Sharing Maximum – limited to 5% countable household income New Mexico Human Services Department 11

12. Oklahoma Employer/employee Partnership for Insurance Coverage (O-EPIC) • HIFA Waiver, tobacco tax financing • Goal to cover 50,000 uninsured workers • Open to workers and spouses under 185% FPL who work for small employers and those “seeking” work • Voucher for small businesses to provide coverage • Employers pays 25%; employee pays 15%; state & federal funds 60% • Safety-net option for workers with employers unwilling to participate

13. IowaCare Section 1115 Waiver • Medicaid Expansion that will cover approximately 30,000 adults (19-64) < 200 % FPL • Different from traditional Medicaid: leaner benefit package, smaller provider network, requires health assessment and premium • The program is a capped, non-entitlement • Iowa eliminated: the Indigent Care Program, and all inter-governmental transfers (IGTs)

14. IowaCare: Financing • Old system New System • Total = $275 million Total = $275 million $66M IGT $110M Federal Match $66M Federal Match $66M State $110M Federal Match $33M State $100M Indigent Care Federal Matching Funds

15. IowaCare: Hospital Trust Fund