Overview of State Efforts Toward Health Reform

1. Overview of State Efforts Toward Health Reform Molly Voris Senior Policy Analyst Center for Best Practices National Governors Association for the National Congress on the Un and Under Insured September 23, 2008

2. The Picture for Health Reform • 45.7 million uninsured in 2007 • $56 billion in uncompensated care in 2008 • Federal and state dollars cover at least 75% of uncompensated care • State and local governments fund $17.2 billion in uncompensated care • U.S. spends the most per individual on health care ($6,714 in 2006) but lags behind in quality of care provided Sources: U.S. Census Bureau, 2008; “Covering the Uninsured in 2008, Hadley J et al., for the Kaiser Commission on Medicaid and the Uninsured, August 2008; OECD Health Data 2008 – Frequently Requested Data.

3. The Picture for State Health Reform • Fiscal environment for states • Increasing cost of health care unsustainable • States are exploring many options • Medicaid redesign • Coverage expansion mechanisms • Health care system improvements and better population health

4. State Private Insurance Market Reforms • Connector Model: Pools individuals to offer several affordable, private insurance options • States may offer subsidies for low-income individuals to purchase health insurance to ensure affordability • Examples of states: Florida, Massachusetts, Washington • Section 125 Plans: Requiring or incentivizing employers to set them up for their employees • Examples of states: Indiana, Massachusetts, Minnesota

5. State Private Insurance Market Reforms (continued) • Employer/Individual Mandates: Part of a universal coverage effort to ensure greater participation • Fines and taxes assist with financing of universal plan • Example of states: Massachusetts, Maine (proposed), New Jersey (for children in 2009) • Benefit Package Design: State defines benefit package and solicits bids from private insurers • Success often depends on state insurance market • Example of states: Connecticut, Maine, Tennessee, Vermont • Dependent Coverage: Require insurers to increase age for covering children of employees • Not a great cost to the state • Targets one of larger uninsured groups in states

6. Public Program Reforms • Medicaid/SCHIP redesign • Private insurance model • Medical home model/coordinated care for chronic conditions • Use of incentives (debit cards, rewards) • Beneficiary involvement and responsibility • Coverage expansions • SCHIP outreach • Expansions of program • Buy-in programs • Limited funds for expansions and difficult choices during budget crises

7. Broader State Health Systems Reform • Increased interest in quality and transparency measurement—process, outcomes, and consumer satisfaction • Drive systemic quality improvement and comparative effectiveness • Insurance regulation, purchaser (state employees/retirees), public health system • Increased emphasis on coordinated care/disease management for chronic diseases

8. Broader State Health Systems Reform (continued) • Greater emphasis on e-health initiatives • E-prescribing • E-health records • Increased concentration on inpatient quality initiatives • Non-payment for “never” events • Hospital-acquired infections reporting to the state and some to the public • Greater concentration on prevention and wellness • Medical homes

9. State Coverage Reform Example: Insure Oklahoma • Available to small businesses with 50 or fewer FTEs with incomes <200% FPL • State set requirements to be a “qualified plan,” includes hospital care, pharmacy benefits, and OOP limits • Insure OK pays 60%, employer pays 25%, employee pays 15% of premium • Market determines other benefits and premiums/cost-sharing within state parameters • Competitive market – 19 carriers, 252 qualified health plans • Over 8,000 people enrolled (as of March 2008)

10. State Quality Reform Example: Minnesota QCare • Initiative to improve quality and cost through better performance and outcomes • Coalition of public and private sector partners • State-purchased health care must comply with QCare standards and align payments and incentives • Standards set in four key areas • Diabetes • Hospital stays • Preventive care for adults and children • Cardiac care • Smart Buy Alliance – public/private partnership of purchasers that base purchases on results of uniform quality measurements (QCare standards)

11. State Systems Reform Example: Vermont • Catamount Health Plan • Non-Group market product offered to the uninsured • Comprehensive benefit package • Employer contribution ($365/year per uninsured FTE) • Premium assistance • Blueprint for Health • Statewide partnership to help those with chronic conditions manage their illness and provide preventive services • Gives providers tools to help patients manage illnesses • Chronic Care Management Programs • Medicaid, Dr. Dynasaur (SCHIP) and VHAP • Carriers offering Catamount Health Plans • State employee health care plan • Vermont Information Technology Leaders (VITL) • Public/private partnership • Charged with creating an integrated, electronic health information infrastructure for the sharing of information among health care facilities, health care professionals, public and private payers, and patients

12. Future State Considerations • States not sure they can afford to wait for (and rely on) potential federal reforms • Continue to see incremental reform initiatives as long as health care costs continue to rise, coverage levels drop, and economy is uncertain • Those interested in reform can learn from pioneer states on successes and challenges • Continued focus on maximizing value of health care dollars