The Kansas DMIE: Implications for Health Reform

1. NASMD Annual Conference November 9, 2010 Washington, DC The Kansas DMIE: Implications for Health Reform Jean P. Hall and Janice Moore University of Kansas

2. Background • Approximately 200,000 people are enrolled in 35 state high-risk pools nationally • Individuals are uninsurable in the private market due to pre-existing conditions • Health reform legislation created a temporary national high-risk pool, called the Pre-existing Condition Insurance Plan (PCIP) beginning in July 2010 and running through December 31, 2013

3. Current State High-Risk Pool Plans • Steep premiums that increase with age; range from 125 to 200% of individual market rates for the state • High levels of deductibles and co-insurance; similar to other individual policies • Limits on some benefits, such as preventive services, prescriptions, and mental health • In Kansas, no coverage for adult immunizations, dental, vision, hearing, contraception, or obesity treatment

4. The Kansas Demonstration to Maintain Independence & Employment • Randomized controlled study funded by the Centers for Medicare and Medicaid Services • Tested the hypothesis that provision of comprehensive benefits to HRP enrollees could prevent or forestall disability • Kansas HRP participants historically transition to SSDI at a rate 8 times that of the general population • Intervention provided Medicaid-like services as wraparound, with enhanced benefits and greatly reduced out-of-pocket costs

5. Methods • Kansas Risk Pool participants ages 18 to 60, working ≥40 hours per month, with a potentially disabling condition • 416 individuals in three cohorts • Six baseline focus groups with total n=42 (10% sample, self-selected) • Telephone surveys with entire sample assessing health status, work efforts, medical debt, experiences with risk pool • Analysis of claims data

6. Participant demographics • 50% male • 99% white • 50.6 years mean age • 71% are self-employed • 45% work <40 hours/week • $49,970 average individual income • 80% had some college; 45% have a four-year degree or higher • 29% report medical debt

7. Claims and Survey Data Findings: Co-morbidities* * Based on baseline claims and self-report

8. Focus Group Findings: 3 Themes • High premiums and deductibles limit ability to afford even basic services • Prescription costs are particularly problematic and compliance is poor • Delay or forfeit strategies increase stress and diminish health and quality of life

9. High Premiums and Deductibles • Choose higher deductibles to obtain affordable premiums (more than half >$2500) • Delay or forgo care including diagnostic, preventive, and treatment • “Save up” visits and surgeries until they meet deductible • Stop care at start of calendar year

10. Prescriptions • Use free samples, generics, double-dose whenever possible • Refuse, delay, reduce dosage, skip doses or use drugs no longer prescribed • “I cut my insulin in half.” • “Now that I’ve gotten the lower premiums and can afford the medication, I take the pills every day exactly like they’re written on the prescription bottle and check my sugar three times a day like I’m supposed to because even the little box of strips can cost $85 a box.”

11. Increased stress • “If somebody says you ought to do this [medical test] and you’re saying I don’t think I can because I can’t afford it… and then you go home at night and say ‘did I do the right thing?’ That eats on people.” • “You’re going ‘is this other pain something I should have gotten tested?’ I couldn’t afford it, but you know you worry.” [from a breast cancer survivor]

12. Many are underinsured • 53% have deductibles > 5% of family income • 38% have out-of-pocket expenses >10% of family income for self & family • 72% have one or more of these indicators of underinsurance • With a deductible of $2500, people with an annual income less than $50,000 are considered underinsured

13. Discussion and Implications • Most in the study were well-educated and middle class; they knew they needed services and medications but could not afford them • Underinsurance may be as big a barrier to access as uninsurance, especially for people with chronic conditions • When provided DMIE benefits and relieved of cost burdens, participants increased use of medically appropriate services and had better outcomes

14. Service Utilization *Intervention group utilization significantly different from control at p<.001

15. PMPM costs Average total annual allowed costs: Control Group: $10,560 Intervention Group: $13,932 *Significantly higher, p<.001

16. DMIE Health Status Outcomes

17. The PCIPs • Coverage level is similar to that of Bronze coverage in the Exchange • Premiums are less than in many state high-risk pool plans, but participants are still likely to be underinsured • PCIP eligibility requires being uninsured for 6 months prior to enrollment; some enrollees will have pent-up need

18. Implications for Health Reform • People with chronic conditions or disabilities who are self-employed or do not qualify for employer-sponsored health care will likely acquire insurance through the Exchange. • If the Exchange expands coverage primarily through plans with high cost-sharing, the benefits of coverage may be muted. • Participant experiences with the PCIPs may provide insights into possible improvements for Exchange coverage.

19. Example from the Exchange • Individual age 50 and income at 435% of poverty level ($50,000)and $10,500 in medical costs: • Annual premiums=$6978* (14% of income) • Annual out of pocket = $4,900 (9.6% of income) assuming $2500 deductible and 30% co-insurance** • Cost of premiums + OOP = 23.6% of income * Premiums from the Kaiser Family Foundation on-line calculator; **Bronze level coverage has a minimum 60% actuarial value.

20. A few more Exchange examples • Family of 4 making $67,000 (304%FPL): • $6395 annual premiums (9.5% of income) • $7973 maximum OOP (11% of income) • =21% of income spent on health care • Individual making $33,000 (305%FPL): • $3135 annual premiums (9.5% of income) • $3987 maximum OOP (12% of income) • =22% of income spent on health care