Spring InstituteDecember 3, 2009

Annie Lee, JDPolicy AnalystColorado Department of Health Care Policy and Financing

HCPF: Who We Are

Administers Medicaid, CHP+ (Child Health Plan Plus, Colorado’s Children’s Health Insurance Program, otherwise known as CHIP) and related public insurance programs that involve State/Federal partnerships.

Covers over 500,000 Coloradans. Approximately 80% of Medicaid and CHP+ members are children.

Responsible for leading public health care policy and reform efforts.

Insurance History

The basic state of medical technology in the late 1800s equaled a low medical expenditure rate.

– The chief cost associated with illness was not the cost of medical care, but lost wages due to sickness (State of Illinois, Report of the Health Insurance Commission, 1919).

As a result, the focus wasn’t on health insurance but “sickness” insurance- similar to today’s “disability” insurance to provide income replacement in the event of illness.

Today we have MRIs, deep brain stimulators, pace makers and in-utero surgery. In conjunction with technology advances, our health care cost have dramatically increased.

Insurance History

Blue Cross– Founded in 1929 by a

group of Dallas teachers who contracted with Baylor University Hospital to provide 21 days of hospitalization for a fixed $6.00 monthly payment. This was revolutionary and pre-paid hospital service plans become popular.

Blue Shield– Similarly, in 1939 the

California Physicians Services started a prepayment plan designed to cover physician services.

Insurance History

The next important notch in the timeline is WWII. During WWII wage and price controls prevented employers from using wages to compete for scarce labor.

In 1949, the National Labor Relations Board ruled in a dispute between the Inland Steel Company and the United Steelworkers Union that the term “wages” included pension and insurance benefits.

This ruling was upheld by the Supreme Court and further reinforced the employment-based system.

Employer Sponsored Insurance

Health insurance coverage provided through an employer. ESI can be solely paid for by an employer or provided with cost-sharing between the employer and employee.

Insurance History

The Medicare and Medicaid programs were created in 1965. Medicare provides health care coverage for Americans 65 and older, and Medicaid helps those with very low income and people with disabilities.

The State Children’s Health Insurance Program (SCHIP), established in 1997, extended health insurance coverage to children in families that earn too much to qualify for Medicaid, but too little to afford private insurance.

Publicly Funded Health Care

Health care that is paid for by the government. It is financed entirely or primarily by taxes--instead of private payments to for-profit insurance companies (i.e. insurance premiums), or directly to health care providers (including co-payments and deductibles).

Who We Cover

Medicaid CHP+ CICPChildrenPregnant WomenParents w/dependent childrenBlind, Disabled, and Elderly

ChildrenPregnant Women

Cannot have other insurance

Do not qualify for Medicaid

Any age

Can have other health insurance

Do not qualify for Medicaid or CHP+

Colorado Indigent Care Program (CICP)

Safety net program for un/underinsured who do not qualify for Medicaid or CHP+.– Not a health insurance program

Qualified providers reimbursed for a portion of their costs.

Applicants are given a “CICP rating” based on their total income and resources.

What We Cover

Medicaid and CHP+ include benefits such as:– Physician visits– Prescription drugs– Labs and X-rays– Emergency Services– In/outpatient Hospital Services– Dental for children– …and many more

Individually Purchased Insurance

Health insurance products available for purchase by individuals without the involvement of an employer sponsor. Unlike group insurance, insurers in Colorado can deny individual coverage based on an individual’s health status.

State High Risk Pools– A state-established, subsidized health insurance

program designed to provide coverage to individuals who have been excluded from the individual insurance market because of a pre-existing medical condition and who are not eligible for public coverage.

– In Colorado, the high-risk pool, CoverColorado, provides subsidies to certain low-income individuals, although premiums are generally set at 100-150 percent of prevailing rates in the nine geographic rating regions of the state.

Another Payer for Vulnerable Populations

Coloradans by Average Monthly Primary Source of Health Insurance

Federal and State Partnerships

Federal Legislation

Centers for Medicare and Medicaid Services (CMS)

States

Activity: What would your health plan look like?

Inpatient (procedures that require in-hospital stays) - $5 Outpatient (procedures that allow for same day release) - $3 Prenatal care - $5 Dental - $3 Vision - $2 Pharmacy - $2 Durable Medical Equipment - $3 Mental Health - $3 Alternative Therapies (includes nontraditional treatments like

massage and acupuncture) - $3

Your budget: $15

System of Payers

Cost

AccessQuality

Medicaid Enrollees and Expenditures by Enrollment Group, FY 2007-08

24%

66%15%

12%56%

19%

5% 3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Enrollees Expenditures

Other

Low-incomeChildren

Low-incomeAdults

Elderly andDisabled

Higher Education15%

Other15%

Education (K-12)23%

Correction/ Judicial

6%

Human Services/Health

Care32%

Transportation7%

General Government

2%

20.2% Health Care Policy and Financing

FY 2008-09 Colorado State Operating Budget: $18.6 Billion

HCPF and Legislation in 2009

HB 09-1293– Expands coverage to additional populations.

CHIPRA 2009– Offers options for expanding coverage.– Led to HB 09-1053, which authorizes HCPF to

waive the 5-year waiting period imposed on immigrants.

FL

NC

SC

GALATX

AL

AR

KS

OKAZ TN

MS

NVUT

NM

CA

WYID

WA

ORND

SD

NE

MT

MO

IN

MI

WI

IL

ME

OH

KY

HI

AK

PA

WV VA

CTNJ

DEMD

RI

NHVT

DC

MA

CO

IA

NYMN

States Covering Legal Immigrant Children with State Funds

States Covering Legal Immigrant Children Not Eligible for Federal Funds (17 states, including DC)

HCPF Initiatives

Health outcomes Cost containment Access

HCPF’s Reform Vision

Stakeholder Collaboration

Health Outcome

Evaluation

Appropriately Defined Benefits

Accountable Care

Coordination

Supportive Payment System

Enhanced Enrollment Structure

Transformed Public Insurance Programs

Optimal Client Health and Function

Health vs. Health Care

Overall health is achieved through a combination of physical, mental, emotional, and social well-being.

Health care is the science and art of promoting health through the services offered by the medical, nursing, and allied health professions.

Economic & SocialOpportunities and Resources

Living & Working Conditionsin Homes and Communities

PersonalBehavior

Medical Care

HEALTH

Broadening the Focus: A Conceptual Framework for

Addressing Disparities

Robert Wood Johnson Foundation Commission to Build a Healthier America www.commissiononhealth.org

Health Outcomes

Colorado is the thinnest state in country--but low income children have 3 times the obesity rate as higher income children.

Smoking rates double state average for adults with Medicaid.

Nursing home bed days trending down and less expensive community services trending up.

Medicaid inpatient hospital costs stable, but ER and outpatient trending up.

Demographics of Colorado’s Children

1/3 of Colorado’s children live in low income households (less than 200% of FPL).

2/3 of low income children are in a racial or ethnic minority families.

Over 1/3 of the children are from cultures other than those of their providers.

Racial and ethnic minorities are the most rapidly growing group of children in Colorado.

Low income children and minority children have greater difficulty accessing health care and have poorer health outcomes than other groups of children.

Source: Demographics of Colorado’s Children www.cchap.org

Health care and Health Initiatives

Upcoming activities to: Reduce readmission rates Reduce emergency room rates Reduce preventable hospitalizationsAnticipate activities related to achieving: Lower child and adolescent obesity Lower adult tobacco use Fewer suicide attempts

Eligible But Not Enrolled Populations

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Counties

Pe

rce

nt

En

rolle

d

Medicaid

CHP+

  Estimate

EBNE Medicaid 47,604

EBNE CHP+ 30,626

Total EBNE 78,230

Barriers to Provider Participation

Poor reimbursement; Difficulties with eligibility and enrollment; Problems with claims processing; Need for social service support for the families; Poor access to, and coordination of, mental health services; Need for better case management and care coordination; Trouble getting children in for regular preventive care, including

immunizations; Transportation problems in low-income families; Need to learn more about culturally sensitive and responsive care; Difficulty in obtaining and affording interpreters for healthcare visits.

Source: www.cchap.org

How does this apply to practice?

Private insurers tend to follow lead of Medicare and Medicaid on payment methodologies and performance incentives - both influence medical practice.

Patients’ health insurance status in constant flux: move between and within uninsured, public insurance, self-insured, employer sponsored insurance.

Department comprises over 20% of state’s operating budget and insures nearly 10% of state’s population making it a significant player in Colorado health care community.

Need sufficient provider capacity to serve new and existing clients.

Where to Find More Information

Medicaid: Colorado.gov/hcpf

Customer service: (800) 221-3943 or in Denver Metro: (303) 866-3513

CHP+: CHPplus.org

Customer Service: (800) 359-1991

My Contact Information

Annie Lee

annie.lee@state.co.us

303.866.3663