Healthy UtahGood for Utah Business?

Chad WestoverPresident, Molina Healthcare of Utah

December 4, 2014

What is it like to live on $15,000 per year?

(<133% of FPL)

$7.25 per hour without health insuranceCrystal Dupont, 25“I try to live within my means, but sometimes you just can’t.”

• No doctor visit in two years• Behind on car payments• Pawn shop / Payday loans to cover monthly expenses• Eats beans and oatmeal• Lives with disabled mom• Attending Community College with loans

By the grace of God': How workers survive on $7.25 per hour BY ALLISON LINN, STAFF WRITER, NBC NEWS

$7.25 per hour without health insuranceJohn White, 61“It’s by the grace of God that I am having ends meet”

• Wages have fallen over last decade• Delivers pizzas• Wage drops to $4.50 hour while delivering – expected

to earn tips• Church members help him pick up odd jobs• Gets $135 month in food stamps (SNAP)• Church sometimes helps pay electric/phone bill or

needed car repairs

By the grace of God': How workers survive on $7.25 per hour BY ALLISON LINN, STAFF WRITER, NBC NEWS

54%

15%

8%

9%

3%2%

2%6% 1%

How far does an income of $833* a month go in Utah?

Average rent for a 1-bedroom apartment$450Grocery bills

(ramen noodles)$125

Car Insurance$66

Gas (10 miles/day)$72

Clothing / Sundry items $25Utilities (gas, water) $20

Entertainment (DVDs) $15Savings / Debt $50 Everything else $10

*Equal to an income of $10,000 a year, or 86% of the federal poverty level

$833Sara’s monthly income

54%

15%

8%

9%

3%2%

2%6% 1%

How far does an income of $833* a month go in Utah?

Average rent for a 1-bedroom apartment$450Grocery bills

(ramen noodles)$125

Car Insurance$66

Gas (10 miles/day)$72

Clothing / Sundry items $25Utilities (gas, water) $20

Entertainment (DVDs) $15Savings / Debt $50 Everything else $10

*Equal to an income of $10,000 a year, or 86% of the federal poverty level

$833Sara’s monthly income

The cheapest Bronze-level health insurance plan for a 25 year-old in Salt Lake County is $134 a month - or more than 13 times than what Sara has leftover each month

Who falls in the coverage gap WITHOUT Healthy Utah?

NOTE: Applies to states that do not expand Medicaid. In most states not moving forward with the expansion, adults without children are ineligible for Medicaid .

50% FPL Parents

0% FPLChildless

Adults

100% FPL($11,490

for an

individual)

400% FPL($45,960 for an individual)

Childless adults below 100% of poverty Parents between 46 - 100% of poverty

Who does Healthy Utah impact?

NOTE: Applies to states that do not expand Medicaid. In most states not moving forward with the expansion, adults without children are ineligible for Medicaid .

50% FPL Parents

0% FPLChildless

Adults

100% FPL($11,490

for an

individual)

133% FPL($15,521 for an individual)

400% FPL($45,960 for an individual)

What about those that fall into 100-133% FPL?

NOTE: Applies to states that do not expand Medicaid. In most states not moving forward with the expansion, adults without children are ineligible for Medicaid .

50% FPL Parents

0% FPLChildless

Adults

100% FPL($11,490

for an

individual)

133% FPL($15,521 for an individual)

400% FPL($45,960 for an individual)

Where should this person go?

NOTE: Applies to states that do not expand Medicaid. In most states not moving forward with the expansion, adults without children are ineligible for Medicaid .

100 - 133% FPL

Healthy Utah Marketplace

• Less premium• No deductible• Lower co-pays

• Sliding scale subsidy for premium• Deductibles (based on plan)• Co-pays (based on plan)

($15,521 for an

individual)

What’s wrong with this story?

Melissa is a 24-year old Utah mom who works, pays taxes, and earns $7,000 a year

Melissa and her daughter receive health insurance through Utah Medicaid

Last week Melissa’s boss offered her a better job… …and a $2,000 raise, but no health insurance

But Melissa turned it down because extra income would cause her to lose her health insurance and fall in to Utah’s coverage gap

How big is the impact to Utah?

Sven E. Wilson, PhD: THE ECONOMICS OF THE HEALTHY UTAH PLAN: A PRELIMINARY ANALYSIS, August 2014

Value of Insurance

Individuals Industry Government

Uncompensated Care

Economic Expansion

Reduction in Public Assistance

Tax Revenues

Program Costs to State

Benefits

Costs

Essential Economic Features

Sven E. Wilson, PhD: THE ECONOMICS OF THE HEALTHY UTAH PLAN: A PRELIMINARY ANALYSIS, August 2014

Puts federal Medicaid dollars

into Private Insurance

Fills the “Coverage Gap”

Strengthens the State Economy

Strengthens the Safety Net for

the Poor

Sven E. Wilson, PhD: THE ECONOMICS OF THE HEALTHY UTAH PLAN: A PRELIMINARY ANALYSIS, August 2014

• The most important political feature of the plan is that it is completely reversible

• There are no up-front costs• No long-term commitments required• No large expansion of state government

required• The legislature can end the program at the

same time it enacts it.• In 2017, the state may want to design a new

program, as allowed under the ACA

Reversibility

Sven E. Wilson, PhD: THE ECONOMICS OF THE HEALTHY UTAH PLAN: A PRELIMINARY ANALYSIS, August 2014

Employer-sponsored plans: Will crowd out occur?

Private Insurance

Medicaid

Under a FULL Medicaid expansion, tens of thousands of Utahns would move from private insurance to Medicaid.

Under Healthy Utah, they stay in the private market.

Sven E. Wilson, PhD: THE ECONOMICS OF THE HEALTHY UTAH PLAN: A PRELIMINARY ANALYSIS, August 2014

Employer-sponsored plans: Will crowd out occur?

Private Insurance

Medicaid

Employer-sponsored plans: Will businesses dump their plans?

Sven E. Wilson, PhD: THE ECONOMICS OF THE HEALTHY UTAH PLAN: A PRELIMINARY ANALYSIS, August 2014

Insurance offered for business reasons• Tax incentives• Market pressure

from Insurers• Competition for

employees• Healthy workforce

Healthy Utah puts money in employee’s hands• Likely to increase

the number of employer-sponsored coverage among low-income Utahns

Healthy Utah does not create incentives for employees to drop

insurance plans

“Not expanding Medicaid could expose UT employers to $11 to $17 million in annual ACA shared responsibility payments.”

Jackson Hewitt, “The Supreme Court’s ACA Decision and Its Hidden Surprise for Employers: Without Medicaid

Expansion, Employers Face Higher Tax PenaltiesUnder ACA” March 2013

Impact on business

“Premium increases would be even higher among those states that do not expand Medicaid. Premium increases would be borne by nonsubsidized purchasers and by the federal government… Exchange premiums also may increase…”

American Academy of Actuaries, “Implications of Medicaid Expansion Decisions on Private Coverage” September 2012

Impact on business

“Pressures will be greatest in states that opt out of Medicaid expansion, but have a relatively high proportion of uninsured residents.”

Moody's, "Reduction of Medicaid & Medicare Disproportionate Share Hospital Payments a Looming

Challenge for States and Hospitals.” March 14, 2013

Impact on business

Impact on State and Local government

“We estimate that 3.6 million fewer people would be insured, federal transfer payments to those states could fall by $8.4 billion, and state spending on uncompensated care could increase by $1 billion in 2016… In terms of coverage, cost, and federal payments, states woulddo best to expand Medicaid.”

RAND Corporation, “For States That Opt Out Of Medicaid Expansion: 3.6 Million Fewer Insured And $8.4 Billion Less In

Federal Payments,” June 2013