Solutions for the Uninsured

Karen DavisPresident, The Commonwealth Fund

Second National Medicaid Congress 2007Washington, DC June 15, 2007kd@cmwf.org

www.commonwealthfund.org

2

What Are the Problems?What Are the Problems?

Uninsured Rates

Quality of Care Chasm

Costs of Care

Administrative Complexity

3

Uninsured Non-Elderly Adult RateUninsured Non-Elderly Adult RateIncreased from 17.8% to 20.5% in Last Five Years;Increased from 17.8% to 20.5% in Last Five Years;

Varies from 11% to 30% Across StatesVaries from 11% to 30% Across States

Data: Two-year averages 1999–2000 and 2004–2005 from the Census Bureau’s March 2000, 2001 and 2005, 2006 Current Population Surveys. Estimates by the Employee Benefit Research Institute.

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVTNH

MARI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

ME

DE

DC

HI

CO

GAMS

OK

NJ

SD

19%–22.9%

Less than 14%

14%–18.9%

23% or more

1999–2000 2004–2005

MA

RI

CT

VTNH

MD

NH

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

ACCESS: UNIVERSAL PARTICIPATION

4

Data: Two-year averages 1999–2000 and 2004–2005 from the Census Bureau’s March 2000, 2001 and 2005, 2006 Current Population Surveys. Estimates by the Employee Benefit Research Institute.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

ACCESS: UNIVERSAL PARTICIPATION

Percent of Uninsured Children Declined Since Percent of Uninsured Children Declined Since Implementation of SCHIPImplementation of SCHIP

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVTNH

MARI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

10%–15.9%

Less than 7%

7%–9.9%

16% or more

1999–2000

DE

MARI

WA

ORID

MT ND

WY

NVUT

KS

NE

MN

MO

WI

TX

IA

ILIN

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

ME

DC

HI

CO

GAMS

NJ

SD

2004–2005

CT

VTNH

MD

AR

CA

AZ NMOK

5

21.0 21.4 21.6 21.9 22.6 25.5 26.3 27.8

3.3 4.65.3 6.0

6.2

1.90.9

0

20

40

1997 1998 1999 2000 2001 2002 2003 2004

SCHIP

Medicaid

Source: The Commonwealth Fund; Data from Georgetown Center for Children and Families and CRS. Based on children ever-enrolled over the course of a year.

Children’s Enrollment in Medicaid and SCHIP, Children’s Enrollment in Medicaid and SCHIP, 1997–20041997–2004

Of 6.2 million in SCHIP in 2004:

1.8 million were in Medicaid 4.4 million were in separate programs

22.3 23.525.2

21.0

27.230.8 32.3

34.0

Millions of children (under age 19)

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THE COMMONWEALTH

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Financial Burden for Low- and Financial Burden for Low- and Middle-Income Families Is IncreasingMiddle-Income Families Is Increasing

26 24

16

7

33

24 23

10

0

25

50

<100% FPL 100% to <200%

FPL

200% to <400%

FPL

400%+ FPL

1996 2003

Percent of non-elderly adults spending 10% or more of disposable income on family out-of-pocket medical costs and premiums

Note: Financial burden includes out-of-pocket expenditures on premiums for private insurance and other health care services.

Source: J.S. Banthin and D.M. Bernard, “Changes in Financial Burdens for Health Care: National Estimates for the Population Younger than 65 Years,” JAMA 296, no. 22 (Dec. 13, 2006): 2712-19.

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THE COMMONWEALTH

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The Solution is in SightThe Solution is in Sight

1. Extend health insurance to all

2. Promote effective cost control strategies

3. Organize the care system

4. Pursue and raise benchmark levels of high quality, safe, effective, efficient care and enhance system capacity to innovate and improve

5. Shape a coherent set of health care policies through national leadership and public-private collaboration

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THE COMMONWEALTH

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Building Blocks for Building Blocks for Extending Health Insurance to AllExtending Health Insurance to All

• Individual mandate• Shared responsibility

– Employer financing coverage for workers or contributing to pool; covering young adults under parents’ plans

– State and federal financing• Federal/state subsidies to make coverage affordable for low-

income individuals and families– Expansion of Medicaid/SCHIP with federal matching– Sliding scale premium subsidies

• Pooling insurance risks– State Connector/Health Insurance Exchange– Federal Employees Health Benefit Plan (Congressional

Health Plan)– Medicare for All

• Quality and Efficiency Provisions

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THE COMMONWEALTH

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New Coverage for Currently Uninsured

Purchasing Pool Congressional

Health Plan FEHBPConnector

TOTAL = 24 m

MedicareTOTAL = 38 m

11m 13m

CHIP/FHIPTOTAL = 43 m

Employer Group Coverage

TOTAL = 165 m

14m 1m

Improved Coverage for Underinsured

3m 1m3m 11m

Source: K. Davis and C. Schoen, “Creating Consensus on Coverage Choices,” Health Affairs (Web Exclusive April 23, 2003).

Creating Consensus on Automatic and Creating Consensus on Automatic and Affordable Health Insurance For AllAffordable Health Insurance For All

10

THE COMMONWEALTH

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Massachusetts Health Plan:Massachusetts Health Plan:Major InnovationsMajor Innovations

Individual mandate Shared Responsibility

Employers cover workers or pay $295/employee

Subsidies for affordable coverageAvailable to those between 100 and 300% of

povertyMassHealth expansions for children below

300% poverty and adults below 100% poverty Pooling insurance risks

Commonwealth Care Connector to organize affordable insurance offerings

Source: John Holahan, “The Basics of Massachusetts Health Reform,” Presentation to United Hospital Fund, April 2006.

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THE COMMONWEALTH

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Update: Massachusetts Update: Massachusetts Health Care ReformHealth Care Reform

– The state has already signed up more than half of the poorest people who are eligible (122,000 new residents covered during the first year of health care reform)

– New plans called Commonwealth Choice went on sale May 1 and go into effect July 1, 2007

– Three tier benefits: basic, value, premium -- deductibles range from $0 to $2,000

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THE COMMONWEALTH

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California Governor’s Proposal:California Governor’s Proposal:Major InnovationsMajor Innovations

Individual mandate Shared Responsibility

Employers cover workers or pay 4% of wages as fee Subsidies for affordable coverage

Available to those below 250% of poverty Medi-Cal expansion to all children below 300% poverty

and adults below 100% poverty Pooling insurance risks

Insurance exchange Guaranteed issue; community rating with age bands 85% minimum medical loss ratio

Other provisions Provider fee assessment (2% of physician revenue to 4%

of hospital revenues)

13

THE COMMONWEALTH

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Maine’s Dirigo Health: Past, Present and Maine’s Dirigo Health: Past, Present and FutureFuture

No individual mandate Governor recently proposed

No requirements on employers Governor recently proposed pay or play

State subsidies for affordable coverageNew insurance product, $1250 deductible;

sliding scale deductibles and premiums below 300% poverty

Medicaid expansions Pooling insurance risks

Dirigo Health Plan: only one insurer participating Governor recently proposed minimum medical loss

ratio

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THE COMMONWEALTH

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Vermont Health Care Affordability Act Vermont Health Care Affordability Act Enacted May 2006Enacted May 2006

No Individual Mandate Shared Responsibility

Employer assessment State subsidies for affordable coverage

Premium subsidies based on sliding scale up to 300% FPL

Pooling insurance risks Catamount Health Plan targets individuals w/o access

to work-based coverage Quality and efficiency provisions

Comprehensive benefit package including primary care, chronic care, acute care & other services

No patient cost sharing for preventive or chronic care services

Build upon Wagner’s Chronic Care Model

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THE COMMONWEALTH

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Prescription for PennsylvaniaPrescription for Pennsylvania

Individual mandate for families > 300% FPL; can buy in for the entire premium (expected to be $280 per month)

Shared Responsibility Employer mandate: 3 percent payroll

tax on employers with 50 or more employees that do not provide insurance

Subsidies for affordable coverage Available to all parents below 300%

poverty; sliding scale, low monthly premium ($10-$70)

Employer contribution for employees earning less than the average state wage = $130 per month; employee sliding scale

No pooling of insurance risks

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THE COMMONWEALTH

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Strategies for Strategies for Extending Health InsuranceExtending Health Insurance

• Tax incentives for individual insurance (President Bush)

• Federal support for state initiatives (Senators Bingaman/ Voinovich; Representatives Baldwin/Price)

• Federal financing with regional insurance exchange (Senator Wyden)

• Hybrid – regional purchasing pools with Medicare-like option (Senator Edwards)

• Hybrid – national purchasing pool based on Federal Employees Health Benefits Program (Senator Obama)

• Medicare for All (Representative Stark; Representative Dingell/Senator Kennedy)

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THE COMMONWEALTH

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H.R. 5684: Health Partnership Through H.R. 5684: Health Partnership Through

Creative Federalism ActCreative Federalism Act

Rep. Tammy Baldwin (D-WI)Rep. Tammy Baldwin (D-WI)

• Real cooperation from across the aisle – proposed by Baldwin and Price with the support of both the Heritage Foundation and the Brookings Institute; National Governor’s Association also had role in drafting the bill

• Requests that states submit proposals for state health care coverage expansion and improvements in quality, efficiency, cost-effectiveness, and the appropriate use of health information technology

• State proposals defined as statewide, multi-state or limited to certain regions

• Establishes a Commission to:– Request and review proposals and submit a list it

recommends for approval to Congress– Report to the public concerning progress made by

states– Make recommendations for minimizing negative effects

of state programs on national employer, provider organizations, insurer

Rep. Tom Price (R-GA)Rep. Tom Price (R-GA)

Rep. John Tierney (D-MA)Rep. John Tierney (D-MA)

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THE COMMONWEALTH

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S. 2772: Health S. 2772: Health

Partnership ActPartnership Act

Senator George Voinovich (R-OH)Senator George Voinovich (R-OH)

• Provides states with grants to carry out innovative state health programs, with priority given to programs most likely to expand coverage and improve access

• Establishes a Commission to:– provide states with reform options for state health care

expansion and improvement programs– establish minimum performance measures and goals with

respect to coverage, quality, and cost of state programs– review state applications and determine whether to submit a

state proposal to Congress

Senator Jeff Bingaman (D-NM)Senator Jeff Bingaman (D-NM)

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THE COMMONWEALTH

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President Bush

State Reforms(15 States)

AmeriCare(Rep. Stark)

Sen. Edwards

Sen. Obama

Total Uninsured Covered, Millions

9.0 20.3 47.8 45?? 40-45??

Net Health System Cost in 2007 (in

billions)($11.7) $22.7 ($60.7) N/A N/A

Federal Government Costs (in billions)

$70.4 $22.0 $154.5 $90–120?? $50-60??

Change in Insurance

Administration (in billions)

$5.5 $2.0 ($73.9) N/A N/A

1Out of an estimated total uninsured in 2007 of 47.8 million.2 Estimated to cover 86% of the 23.6 million people projected to be uninsured in the 15 states in 2007. Source: S. R. Collins, K. Davis, and J. L. Kriss, An Analysis of Leading Congressional Health Care Bills, 2005-2007: Part I Insurance Coverage, The Commonwealth Fund, March 2007

Features of Current Approaches to Quality Features of Current Approaches to Quality Affordable Health Coverage for AllAffordable Health Coverage for All

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THE COMMONWEALTH

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Strategies for Achieving a High Performance Health System

• Align financial incentives– Payment incentives to promote efficient and effective care– Effective cost control strategies

• Organize the health care system to ensure accessible and coordinated care

– Patient-centered medical home

– Integrated delivery systems and multi-specialty group practices• Pursue excellence in safe, effective, efficient care and enhance

capacity to innovate and improve

– Investing in health information technology and information exchange systems

– Better information on provider quality and total costs for episode of care

– Spreading best practices and use of benchmark data

– Center on Comparative Effectiveness and Evidence-based Decision Making

• National leadership and public-private collaboration to achieve coordinated policies, simplification, and enhanced value

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THE COMMONWEALTH

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SCHIP ReauthorizationSCHIP Reauthorization• Senator Kennedy/ Senator Hatch

– Increased funds for outreach and simplified enrollment procedures to reach eligible, but uninsured children

– SCHIP funds to help cover the cost of health insurance premiums for children in lower-income families with access to employer-sponsored coverage and increased flexibility for states to determine income eligibility levels for their programs

• Senator Clinton/ Representative Dingell – Expand SCHIP to children in families with incomes up to 400% of FPL – Employers and parents can purchase health insurance through SCHIP

• Senator Rockefeller/ Senator Snowe– Double state allotments to cover children while streamlining the eligibility

process – State option to cover pregnant women and children who are legal immigrants – Ease requirements to document citizenship and improve benefits – Strengthen standards to ensure mental health coverage and make dental

coverage a guaranteed benefit• Representative Emanuel

– Funding for all currently eligible children; tax credits for middle income families to buy coverage

• Representative Barton/ Representative Deal– Limit SCHIP funds to coverage of low-income children and pregnant women

who live below 200 percent of the poverty level

22

THE COMMONWEALTH

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5945

32 38 3422

3

3244

49 42 39

29

110

20

40

60

80

100

Legal

immigrant

children if

income-

eligible

Children up

to 300% FPL

Buy-in

option for

families

above

income

threshold

All parents

of children

covered by

SCHIP

Childless

adults under

100% FPL

All children

regardless

of income

Children

under 200%

only

FavorStrongly favor

Strong Support for Eligibility Expansions Strong Support for Eligibility Expansions under SCHIPunder SCHIP

8882 80

73

51

Percent

91

14

Note: Segments may not sum to totals because of rounding.Source: The Commonwealth Fund Health Care Opinion Leaders Survey, April 2007.

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THE COMMONWEALTH

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ConclusionConclusion• SCHIP is a test of Congressional and Administration support for

state initiatives in extending health insurance coverage• Health reform will be a major issue in the 2008 presidential

election• Business/labor/consumer/senior coalitions beginning to lead

the drive for universal coverage• State reforms are pointing the way• Building blocks for universal coverage

– Individual mandate– Shared financial responsibility– Expansion of existing programs:

• Medicaid/SCHIP• Medicare• Employer coverage (e.g. young adults)

– Creation of state or federal purchasing pool• Connector/Health Insurance Exchange• Medicare for All or FEHBP

• Will need to address quality and efficiency; achieve savings as well as expand coverage

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THE COMMONWEALTH

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Thank You!Thank You!Sign up for e-alerts at www.commonwealthfund.orgSign up for e-alerts at www.commonwealthfund.org

Stephen C. Schoenbaum, M.D., Executive Vice President and Executive Director, Commonwealth Fund Commission on a High Performance Health Systemscs@cmwf.org

Cathy Schoen, Senior Vice President, Research & Evaluation, Commonwealth Fund cs@cmwf.org

Sara Collins, Assistant Vice President, The Commonwealth Fund src@cmwf.org

Anne Gauthier,Senior Policy DirectorCommission on a High Performance Health Systemag@cmwf.org

Katherine Shea, Research Associate, Commonwealth Fund

ks@cmwf.org

Rachel Nuzum,Program OfficerState Innovationsrn@cmwf.org