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![Page 1: © 2005 Powell Goldstein LLP. All Rights Reserved. New Approaches to State Health Reform: Extending Coverage to the Uninsured and Reducing State Health.](https://reader035.fdocuments.us/reader035/viewer/2022070409/56649e8f5503460f94b92f20/html5/thumbnails/1.jpg)
© 2005 Powell Goldstein LLP. All Rights Reserved.
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
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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
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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)
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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Non Monetary Measures:Non Monetary Measures: Leveraging State Purchasing PowerLeveraging State Purchasing Power
State Employee Health Plans
Medicaid
Small Businesses
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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
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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
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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
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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)
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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
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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
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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.)
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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)
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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
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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
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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
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Non-Monetary Measures:Non-Monetary Measures:Individual MandateIndividual Mandate
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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
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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)
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Barbara EymanPowell Goldstein LLP901 New York Avenue, NW
Washington DC202-624-7359