Post on 03-Jan-2016
The Governor’s Plan for a Healthier Indiana
Seema Verma, MPHSeemaVerma Consulting
Health Savings Account
• Utilize key principles of HSAs: value and cost conscious consumerism
• Price transparency• Address key criticisms of health savings
accounts for low income persons:– Deductibles unaffordable especially if contributions to
premiums are required – Barrier to seeking needed preventative services– Low level of tax liability
New Program
• Consumers with “skin in the game”
• Financial incentives to be healthy and to use health care services appropriately
• Promote price transparency for providers
Current Medicaid Programs & Proposed Governor’s Plan Population
Age <1 1-5 6-18 Pregnant 19 - 64 *65+ DisabledBlind*
133%
150%
185%
200%
23%
100%
FPL is recalibrated annually and dependent on household size. For a family of four, 100% of the FPL is $20,000.
70% - 80%*
*Aged, Disabled and Blind income eligibility is driven by SSI standards rather than FPL
FPL
Medicare
ProposedPopulation
350,000 Eligible
(Childless Adults Between 100-200%
FPL only)
Medicaid Population-
One of the lowest coverage States in
the nation
The Governor’s
Plan $500 Free Preventive
Care
POWER Account
$1,100 Individual* and State Contributions
•Controlled by Participant to Cover Deductible
INSURANCE COVERAGE
$300,000 Annual Coverage
$1 Million Lifetime Coverage
• Smoking Cessation
• Prostate Exam• Mammogram
Covered Services•Physician Services
•Prescriptions
•Diagnostic Exams
•Disease Management
•Home Health Services
•Outpatient Hospital
•Inpatient Hospital• Physicals• Diabetes
*Individual contribution not to exceed 5% of gross annual income
Personal Wellness Responsibility (POWER) Accounts
How the POWER Account works:
• State and participant contribute a combined total of $1,100 per adult into account to cover deductible
• Individual contributes no more than 5% of family income, pro-rated to account for payments to other programs
• Employers may elect to contribute• Payroll Deduction• Not a traditional HSA, no tax advantage• Unspent funds
– $500 stays in account for next year & lowers individual and State contributions
– Participants that no longer qualify get a pro-rated payout– The participant may withdraw anything above $500, if preventative
services are completed
POWER Account
• State pre-funds account & individual makes monthly contributions
• Individual controls account spending
• Debit Card
• Covers only approved plan benefits by plan providers
Funding for POWER Account
$0
$200
$400
$600
$800
$1,000
$1,200
$9,800 $14,700 $19,600
Annual Income
Ann
ual C
ontr
ibut
ion
State
Participant
Single Adult: $1,100
$610
$490
$365
$735
$120
$980
Funding for POWER Account
$0
$500
$1,000
$1,500
$2,000
$2,500
$20,000 $30,000 $40,000
Annual Income
An
nu
al C
ontr
ibu
tion
State
Participant
Family of Four: $2,200(Two Adults & Two Children)
$1,200
$1,000
$1,096
$1,104
$800
$1,400
Contributions reduced to account for premiums paid to Medicaid for children
Administration
• 2-5 HMOs or Commercial Carriers– Benefit plans similar– Medicare provider payment as floor
• Plan Responsibilities– POWER Account contribution collections– Marketing– Enrollment– Claims payment etc.– Disease management programs or other incentive
programs for chronically ill
High Risk Individuals
• Screening for high risk conditions at enrollment
• Referred to high-risk pool for disease management
• Cost sharing remains consistent• State pays higher premium and may fund
a larger POWER Account• Those that exceed $300,000 will likely be
eligible for existing Medicaid program
Matched Federal Funding
$175M
Increased Cost of Cigarettes
$95M
DSH*
$50M
CNOM**
$80M
Increased Cost of Cigarettes
$172M
Matched Federal Funding
$316M
CNOM**
$130M
Participant
Contribution
$132M
DSH*
$50 M
Public Health $35M • Smoking Reduction $24M
• Immunizations $11M
Funding for The Governor’s Plan
+ 25¢ = $130M + 50¢ = $207M
$480M to cover 120,000 $800M to cover 200,000
*DSH: Disproportionate Share Hospital Program - Currently funded at $200M
**CNOM: Federal matching “credit” for State’s current health programs
Participant
Contribution
$80M
VALUES
•Promoting healthier Hoosiers
•Promoting personal responsibility
•Using private market solutions
•Using overt, not covert, subsidies
•Practicing fiscal responsibility
•Helping Hoosier business
•Work Incentives
OWNERSHIP SOCIETY•Cost sharing required at all service levels•All participants must contribute•Access to HSA-like Accounts
DISEASE PREVENTION & HEALTH PROMOTION
•First dollar coverage for preventive care• Rewards for positive health behaviors •Disease management for high cost populations
INCREASE ACCESS TO COMMERCIAL PRODUCTS
•Subsidies for low-income Hoosiers to receive commercial health plans and to have an“ HSA-like account.•Require subsidy eligible persons to maintain current coverage
ECONOMIC DEVELOPMENT•Reduces cost growth trajectory of premiums by limiting cost-shifting to insured populations•Brings new dollars to the State and healthcare industry
LONG TERM STATE BUDGET STABILITY
•Not an entitlement program•Enrollment capped•Commercial benefit package•Funding sources keep pace with cost growth
TRANSPARENCY IN PRICING AND SUBSIDIZATION
•Moves existing government subsidies away from providers to individuals to purchase health insurance•Reduces cost-shifting from uninsured to insured populations•Increases quality as providers compete to serve low income•Encourages subsidized population to make value conscious decisions in the health care market place.
VALUES & VISION
Contact Information
Seema Verma, MPH
sverma@seemavermaconsulting.com
(317) 809-8536