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New Approaches toNew Approaches toState Health Reform:State Health Reform:
Extending Coverage to the Uninsured Extending Coverage to the Uninsured
and Reducing State Health Care Costsand Reducing State Health Care Costs
New Approaches toNew Approaches toState Health Reform:State Health Reform:
Extending Coverage to the Uninsured Extending Coverage to the Uninsured
and Reducing State Health Care Costsand Reducing State Health Care Costs
Barbara EymanPowell Goldstein LLPMedicaid Congress
Washington DCJune 6, 2006
Overview of ApproachesOverview of Approaches
Public Funding Models
– Medicaid/SCHIP Initiatives
– Employer-Based Initiatives
– Reducing Risk
– Tax Incentives
– Behavioral Incentives
Non-Monetary Measures
– Leveraging State Purchasing Power
– Consumer-Driven Market Approach
– Public Private Purchaser Alliance
– Employer/Individual Mandate
Community-Based/Safety Net Provider Initiatives
Public Funding Models:Public Funding Models: Expanding Medicaid/Expanding Medicaid/
SCHIP EligibilitySCHIP Eligibility
Optional Coverage Groups
HIFA Waivers
Other 1115 Demonstrations
Examples:
– Oregon, Utah, Illinois (AllKids)
– 22 States Pursuing Eligibility Expansion in 2006 (Kaiser Family Foundation)
Public Funding Models:Public Funding Models: Using Medicaid/SCHIP Funds Using Medicaid/SCHIP Funds
to Expand Private Coverageto Expand Private Coverage State Uses Medicaid Funds to
Subsidize Private Coverage
Premium Assistance (Section 1906)
– Cost Effectiveness Requirement
– Wrap-Around Coverage
HIFA and Other 1115 Waivers
Public Funding Models:Public Funding Models: Using Medicaid/SCHIP Funds Using Medicaid/SCHIP Funds to Expand Private Coverageto Expand Private Coverage
Example:
Arkansas: Safety Net Benefit Program HIFA Waiver
Small Employer-Based Coverage (<50 Employees)
Newly Designed Product
Limited Benefit Package
$15/$100 Monthly Cost + Co-Pays/Deductibles
100% Employee Coverage Requirement
Funded by Premiums, Tobacco Funds, Federal Match
Public Funding Models:Public Funding Models: Subsidizing Employer-Subsidizing Employer-
Sponsored Private CoverageSponsored Private Coverage
State Subsidizes Employers and/or Employees for the Purchase of Existing Employer-Based Coverage
No New Product Created
Subsidy Intended to Reduce Cost and Increase Employee Uptake
Public Funding Models:Public Funding Models:Subsidizing Employer-Subsidizing Employer-
Sponsored Private CoverageSponsored Private Coverage Example:
Utah: Covered at Work $50 Monthly Subsidy for Employees
Eligibility Criteria
– (<150% FPL)
– Premiums > 5% of Income
– Not Eligible for Medicaid
No Minimum Benefit Package
Public Funding Models:Public Funding Models: Establishing Affordable Establishing Affordable
Employer-Based PlanEmployer-Based Plan State Creates New Coverage Product
Provides Subsidies for Participation
Requires Employer Contribution
Offered through Employers and/or to Self-Employed and Individuals
Offered through Private Carriers or Self-Administered
May Offer Multiple Coverage Options
May Leverage Medicaid Funding for Medicaid-Eligible Participants
Public Funding Models:Public Funding Models:Establishing Affordable Establishing Affordable
Employer-Based PlanEmployer-Based PlanExample
Maine: DirigoChoice Small Employers (<50 Employees), Self-
Employed, Individuals
75% Employee Participation Requirement
Market-Based Benefit Package
Employer Pays 60% of Employee Cost
Low Income (<300% FPL) Discounts on Monthly Payments, Co-Payments & Deductibles
Funded by Employer & Individual Contributions, State Funds, Federal Medicaid Match
Public Funding Models:Public Funding Models:Establishing Affordable Establishing Affordable
Employer-Based PlanEmployer-Based Plan
Example
Tennessee: Cover Tennessee $150 Monthly Premium Shared by Employers, Employees, State
Focus on Small Employers
Benefit Package to be Bid by Private Insurers
Open to Uninsured Individuals without Insurance for 6 Months
Public Funding Models:Public Funding Models:Enhancing Affordability by Enhancing Affordability by
Reducing RiskReducing Risk State Covers Catastrophic
Costs
– Reinsurance
– Stop Loss
State Covers Higher than Average Overall Risk (Arizona)
May Include Cap (to Encourage Ongoing Cost-Containment)
May Include Partial Coverage
Public Funding Models:Public Funding Models:Enhancing Affordability by Enhancing Affordability by
Reducing RiskReducing Risk
Example
New York: Healthy New York Small Employers (<50 Employees), Self-Employed, Individuals
Eligible
Standard Benefit Packages Offered by All HMOs
Rates Vary by HMO
90% Claims Reimbursement between $5,000 and $75,000
Public Funding Models:Public Funding Models:Creating High Risk Pools Creating High Risk Pools
Targeted at Uninsurable Individuals
Federal Funding Available for Qualifying Pools– Premiums 200% Private Rates
– HIPAA-Qualified
– Ongoing Financing Mechanism
– At Least 2 Coverage Options
Funding Sources Include Premiums, Insurance Assessments, Hospital Assessments, State General Revenues, Federal Grant Funds
Public Funding Models:Public Funding Models:Providing Tax IncentivesProviding Tax Incentives
Employer Tax Incentives
Individual Tax Incentives
– Health Coverage Tax Credit
Tax Incentives for Health Savings Accounts
Public Funding Models:Public Funding Models:Behavioral IncentivesBehavioral Incentives
Disease/Chronic Care Management– Medicaid/Non-Medicaid
– High Risk Pools
– Disease Specific
– High Utilizers
Prevention/Wellness Incentives– ME DirigoChoice: $25 to Choose PCP/$75 for
First PCP Visit and Health Assessment
– Eliminate Cost Sharing for Preventive Care
– Rates Based on Tobacco Use/Weight
Non Monetary Measures:Non Monetary Measures: Leveraging State Purchasing PowerLeveraging State Purchasing Power
State Employee Health Plans
Medicaid
Small Businesses
Non Monetary Measures:Non Monetary Measures: Leveraging State Purchasing PowerLeveraging State Purchasing Power
Example
Connecticut: Municipal Employees
Health Insurance Program State Negotiated Plans
Made Available to Small Businesses (< 50 Employees)
More Favorable Group Rates
Non Monetary Measures:Non Monetary Measures: Leveraging State Purchasing PowerLeveraging State Purchasing Power
Example
Maine: RX Plus Leverages Medicaid Drug Purchasing
to Offer Discounted Drugs to Uninsured
State Negotiated Medicaid Rebates for Uninsured
Participating Manufacturers Included in Medicaid Preferred Drug List
Non Monetary Measures:Non Monetary Measures: Leveraging State Purchasing PowerLeveraging State Purchasing Power
Example
Pennsylvania: adultBasic
Negotiated Deal with 4 BCBS Plans
Requires Dedication of a Percentage of Premium Revenues to Fund adultBasic Coverage
adultBasic Provides Affordable Coverage for Low Income Adults
$85 Million in 2005 Covering 29,0000 Individuals
Non-Monetary Measures:Non-Monetary Measures: Enhancing Consumer Driven Enhancing Consumer Driven
Market ForcesMarket Forces
Health Savings Account/High Deductible Health Plans
6 States Provide Exempt HSA Contributions from State Taxes
9 States Provide HSA Option for State Employees
Some States Experimenting with HSAs for Medicaid (FL & IA Have CMS Approval)
Non-Monetary Measures:Non-Monetary Measures: Enhancing Consumer Driven Enhancing Consumer Driven
Market ForcesMarket ForcesExample
Maine Quality Forum
– Promoting Best Practices
– Publishing Comparative Quality Data
– Average Pricing Data
– Promoting Electronic Data
– Patient Safety Initiative: Safety Star Certification
Non-Monetary Measures:Non-Monetary Measures:Permit Limited Benefit PlansPermit Limited Benefit Plans
Exempt State-Sponsored and/or Other Plans from Insurance Benefit Mandates
Examples
– Arkansas: Health Insurance Purchasing Group Law
– Florida: HealthFlex
Non Monetary Measures:Non Monetary Measures:Public-Private Purchaser Public-Private Purchaser
AllianceAlliance State & Private Purchasers Set Uniform
Standards
Example
Minnesota Smart Buy Alliance
– Alliance Includes Purchasing for 3.5 Million People
– Standardized Information for Consumers on Cost and Quality
– HIT Requirements (SmartCard, Electronic Prescribing, Standardized Claims Forms, Patient Satisfaction and Outcomes Tracking, Etc.)
Non-Monetary Measures:Non-Monetary Measures:Employer MandateEmployer Mandate
Mandated Employer-Based Coverage
May Exempt Small Employers
May Provide Subsidies
May Assess Employers Not Offering Coverage
(Pay or Play)
Non-Monetary Measures:Non-Monetary Measures:Employer MandateEmployer Mandate
Example
California: Health Insurance Act of
2003 Pay or Play: Employers with 20+
Employees Must Cover 80% of Premiums or Pay Fee to State Health Purchasing Fund
Employers with <20 Workers Exempt
Tax Credit for Employers with 20-49 Employees
Required Dependent Coverage for 200+ Employees
Measure Defeated on 2004 Ballot Initiative
Non-Monetary Measures:Non-Monetary Measures:Employer MandateEmployer Mandate
Example
Vermont: Catamount Health Standardized Health Plan for Uninsured
Offered by Private Insurers (Initially)
Subsidies for Low Income Individuals
Employers Assessed $365/FTE for Each Uncovered Worker
– 8 FTEs Exempt (Declining to 4 by Year 4)
– Includes Employees Not Offered Coverage and Employees Not Accepting Coverage
Non-Monetary Measures:Non-Monetary Measures:Employer MandateEmployer Mandate
Example
Maryland: Fair Share Health
Care Fund Act Businesses with >10,000
Maryland Employees Must Contribute 8% of Payroll to Health Insurance Coverage or Pay into Pool
Subject to ERISA Challenge
Non-Monetary Measures:Non-Monetary Measures:Individual MandateIndividual Mandate
Community-Based InitiativesCommunity-Based Initiatives
Healthy Communities Access Program
– Federal Grants to Coalitions of Safety Net Providers
– Coordinate Care, Improve Quality, Increase Public Program Enrollment, Enhance
Access, Etc.
Three-Share Programs
– Employer/Employee/Government Share in Health Coverage Costs
– Affordable Rates/Limited Coverage
– Targeted to Small Employers
Safety Net Provider Safety Net Provider InitiativesInitiatives
Provider-Based Networks “Covering” Uninsured
Integrated, Coordinated Care
Medical Home
Quality Initiatives
Reduce Inappropriate ER Usage
Examples
– Boston Medical Center/Cambridge Health Alliance
– Virginia Coordinated Care (Virginia Commonwealth University Health System)
– UNM Care (University of New Mexico)
Barbara EymanPowell Goldstein LLP901 New York Avenue, NW
Washington DC202-624-7359
