Vermont Health Care ReformVermont Health Care Reform

National Academy for State Health Policy National Academy for State Health Policy Annual ConferenceAnnual Conference

Denver, Colorado

Pilgrim’s Pride Workshop1:30 - 3:00 pm

October 15, 2007

Susan W. Besio, Ph.D.Director of Health Care Reform Implementation

Vermont Agency of Administration

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Vermont ContextVermont Context

Population: 623,000

19 U.S. cities are larger than Vermont

Ranked the 2nd healthiest state overall in 2005 and 2006 1

Ranked 11th for proportion of population insured 2

1 United Health Foundation2 US Census 2005 revised

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Vermont Context – Health Care CostsVermont Context – Health Care Costs Growing cost of health care is unsustainable

• Annual expenditures of $3.5 billion

• 15.2% of Vermont’s gross state product

• Vermont’s per capita costs still less than national average, but spending growth rates have been higher than national average for last 6 years

Health Care Expenditures(2005)

Vermont U.S.Total (billions) $3.5 $2,016Per capita $5,636 $6,682Annual Change (2004-2005) 7.2% 7.4%Average Annual Change (1995 -2005) 7.9% 7.0%Share of Gross State/Domestic Product 15.2% 16.2%

Over 60,000 Vermonters are uninsured, and the number is growing

An estimated 50% of Vermonters with chronic conditions account for 70% of health care spending, but only 55% get the right care at the right time

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Vermont Context – The InsuredVermont Context – The Insured 91.2% of Vermonters, 95.1% of Vermont children91.2% of Vermonters, 95.1% of Vermont children

Private Health Insurance• 59.4% (370,000) have private insurance as primary coverage

– 91% receive employer-sponsored insurance– 5% purchase their own coverage in the individual market– Remaining covered by higher education, COBRA, etc.

Medicaid: • 14.5% (90,350) have Medicaid as primary coverage

– Traditional Medicaid – up to 125% FPL– Dr. Dynasaur – Children in households up to 300% FPL (41% of

Vermont’s children)– Vermont Health Access Plan (VHAP) – Adults up to 150% FPL and

caretakers of dependent children up to 185% FPL

• Largest Insurer in Vermont (9,000 Enrolled Providers)

Medicare: 14.5% (90,100) Military Insurance: 1.7% (10,500)

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Vermont Data 2005 – The UninsuredVermont Data 2005 – The Uninsured9.8% of Vermonters, 4.9% of Vermont children9.8% of Vermonters, 4.9% of Vermont children

• An 1.4% increase in the rate of uninsured since 2000 (8.4%)

• 51% are eligible for Medicaid programs but not enrolled• 79% of uninsured children; 49% of uninsured adults (18 – 64)

• 87% are interested in enrolling; 57% believe they are not eligible

• 27% have household income between 150-185% and 300% FPL and are not eligible for a Medicaid program but cannot afford private insurance

69% have been without insurance for more than a year

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Vermont Data 2005 – The UninsuredVermont Data 2005 – The Uninsured9.8% of Vermonters, 4.9% of Vermont children9.8% of Vermonters, 4.9% of Vermont children

77% reported cost as the main reason for being uninsured

30% of uninsured children and 40% of uninsured adults did not see a health care professional in past year

45% of uninsured children did not see a physician for routine care (compared to 7% of insured children) Much more likely to go to ER or urgent care (8.6% vs .7%)

25% of uninsured adults reported not seeking needed medical care due to cost

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Vermont’s ResponseVermont’s Response 2006 Legislation

• Health Care Affordability Acts (Acts 190, 191)• Common Sense Initiatives (Appropriations Bill)• Sorry Works! (Act 142)• Safe Staffing and Quality Patient Care (Act 153)

2007 Legislation• Corrections and Clarifications to the Health Care Affordability Acts of

2006 (Act 70)• An Act relating to Ensuring Success in Health Care Reform (Act 71)

Joint Legislative Commission on Health Care Reform

Administration Director of Health Care Reform Implementation

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Health Care Reform GoalsHealth Care Reform Goals

Increase Access Improve Quality

Contain Costs

35+ Initiatives

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Goal: Increase Access to Affordable Goal: Increase Access to Affordable Health Care CoverageHealth Care Coverage

Enhance Private Insurance Coverage• Catamount Health Plan for the Uninsured• Non-Group Market Reform• Promotion of Employer-Sponsored Insurance• Local Health Care Coverage Planning Grant• Potential Individual Insurance Mandate

Improve Outreach to Uninsured• Aggressive Marketing• Dedicated Web-site, 1-800 #• Application Simplification

Assist with Affordability• Premium Assistance (ESI, Catamount)• Reduction in VHAP Premiums

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Goal: Improve Quality of CareGoal: Improve Quality of CareChronic Care Management• Blueprint for Health• OVHA Chronic Care Management Program• State Employee Health Plan• ESI Premium Assistance plan approval, cost-sharing• Catamount Health coverage, cost-sharing• Care Coordination • Payment Reforms Increase Provider Access

to Patient Information•Health Information Technology •Electronic Medical Records•Master Provider Index•Multi-payer DatabasePromote Quality Improvement

•Consumer Health Care Price & Quality System•Adverse Events Monitoring System•Hospital-acquired Infections Data•Safe Staffing Reporting•SorryWorks!•Advanced Directives

Increase Provider Availability•Loan Repayment Program•Loan Forgiveness Program•FQHC Look-alike Funding

Promote Wellness• Immunizations• CHAMPPS Grants• Catamount Health Coverage, cost-sharing• Healthy Lifestyles Insurance Discounts• AHS Inventory of Health and Wellness Programs

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Goal: Contain CostsGoal: Contain CostsIncrease Access to Coverage and Care

Decrease Uncompensated Care Lower Premium Costs

Decrease Cost Shift• Increase Medicaid Provider Rates• Cost Shift Task Force • Standardize Policy for Hospital Uncompensated Care and Bad Debt• Hospital Cost Shift Reporting Reforms

Improve Quality of Health Care Appropriate Care, Better Information Lower Costs

Simplify Administration• Common Claims and Procedures• Uniform Provider Credentialing

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Health Care CoverageHealth Care Coverage

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Why is Coverage Important?Why is Coverage Important?

Un-reimbursed care increases private insurance premiums Makes insurance less affordable

• Fewer people are covered• Benefits are decreased and/or people choose non-comprehensive plans to

make plans affordable

People with comprehensive insurance coverage are more likely to participate in preventive care Increases quality of life Decreases cost of health care overall

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Catamount HealthCatamount Health A non-group insurance product for uninsured Vermont

residents

Offered as a preferred provider organization plan by two private insurers, beginning October 1, 2007

Is required to be a comprehensive insurance package covering:

• Primary care• Preventative care• Acute episodic care• Chronic care• Hospital services • Pharmaceutical coverage

Individuals may choose which insurer they would like to use.

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Catamount HealthCatamount HealthLEGISLATIVELY-MANDATED COST-SHARING

Deductibles: In-Network: Out-of-Network: $250/individual $500/individual

$500/family $1,000/family

Co-Payment: $10/office visit

Prescription Drugs: No deductible Co‑payments: $10 generic drugs$30 drugs on preferred drug list$50 non-preferred drugs

Preventive Care & Chronic Care*: $0 Not subject to deductible, co-insurance, co-

payments

Out-of-Pocket Maximum: In-Network: Out-of-Network: (excluding Premium) $800/individual $1,500/individual

$1,600/family $3,000/family

* For people enrolled in Chronic Care Management Program

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Catamount Health CostsCatamount Health Costs The cost will depend on individual / household income

Cost for Individual Coverage with Premium Assistance:Cost for Individual Coverage with Premium Assistance:

Individual Income by federal poverty level Monthly premium cost *(1 person/annual in 2007)

• Below 200% FPL ($20,420) $60.00 • 200-225% ($20,421 – 22,973) $90.00• 225-250% ($22,974 – 25,525) $110.00 • 250-275% ($25,526 – 28,077) $125.00 • 275-300% ($28,078 – 30,630) $135.00

* Cost for two-person coverage will be double these amounts

Estimated Full Cost for Individuals/Households over 300% FPL:Estimated Full Cost for Individuals/Households over 300% FPL:• Single $ 390 / month• Two Person $ 780 / month• Family $1,750 / month

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Catamount Health EligibilityCatamount Health Eligibility You can purchase Catamount Health if you are an

uninsured Vermont resident, are 18+, and are not eligible for an Employer-Sponsored Insurance (ESI) plan *.

Uninsured means:• You have insurance which only covers hospital care OR doctor’s

visits (but not both)

• You have not had private insurance for the past 12 months

• You had VHAP or Medicaid but became ineligible for those programs

• You had private insurance but lost it because you: Lost your job Got divorced No longer have COBRA coverage Had insurance through someone else who died Are no longer a dependent on your parent’s insurance Graduated, took a leave of absence, or finished college or university and got

your insurance through school

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Catamount Health EligibilityCatamount Health Eligibility

You can purchase Catamount Health even if you are eligible for an Employer-Sponsored Insurance (ESI) plan IF you have an income under 300% FPL, AND

Your ESI plan is not approved by the state as comprehensive and affordable (with state assistance)

ORIt is more cost effective to the state to provide premium assistance for you to enroll in a Catamount Health plan than providing premium assistance for you to enroll in your ESI

ORIt is more cost effective to the state to provide premium assistance for you to enroll in your ESI than providing premium assistance for you to enroll in Catamount Health, but you must wait until the next open enrollment period for your ESI (at which point you must switch to your ESI to receive premium assistance)

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Key Dates:Key Dates: CATAMOUNT HEALTH PLANSCATAMOUNT HEALTH PLANS

September 8, 2006 Rules filed with Secretary of State

October 7, 2006 Carriers submitted Letters of Intent(BCBS-VT, MVP, CDPHP)

Mid-March, 2007 Carriers file forms and rates

July, 2007 Final MVP rates approvedSeptember, 2007 Final BCBS-VT rates approved

October 1, 2007 Catamount Health Insurance available to uninsured Vermonters

October 1, 2009 Legislative review re: cost effectiveness; may trigger a self-insured plan

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Premium AssistancePremium Assistance Catamount Health

• Vermonters who qualify for Catamount Health with income less than or equal to 300% of Federal Poverty Level (FPL) ($30,630 for one person) may receive premium assistance from the state

Employer-Sponsored Insurance (ESI)• Uninsured Vermonters with income less than or equal to 300% FPL

may apply for ESI premium assistance• ESI plans must offer comprehensive benefits and be affordable

in order for the individual to receive premium assistanceAffordable = maximum individual in-network deductible of $500Comprehensive = covers physician, inpatient care, outpatient,

prescription drugs, emergency room, ambulance, mental health, substance abuse, medical equipment/supplies, and maternity care

Employers do not have to contribute to the plan for it to qualify

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Premium AssistancePremium Assistance Cost Effectiveness TestCost Effectiveness Test

VHAP Applicants (under 150 -185% FPL)• If providing premium assistance to the individual to enroll in their ESI

plan is more cost-effective to the state than enrollment in VHAP, the applicant will be required to enroll in their ESI plan to get state assistance.

Catamount Health Applicants (at or under 300% FPL)• If providing premium assistance to the individual to enroll in their ESI

plan is more cost-effective to the state than providing premium assistance for the Catamount Health Plan, the applicant will only receive state assistance to enroll in their ESI plan.

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How will Premium Assistance be Paid?How will Premium Assistance be Paid?

Catamount Health Premium Assistance• Beneficiary will pay his or her share to state

• State will pay total premium to carrier

ESI Premium Assistance• Employee will pay total premium to employer through payroll

deduction

• State will pay employee prospectively for premium assistance

• Employers will not have to modify payroll or accounting systems

• Employers may have to provide information on the plan’s cost to the employee to assist with enrollment in the premium assistance program

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Key Dates: Key Dates: PREMIUM ASSISTANCE FOR PREMIUM ASSISTANCE FOR ESI / CATAMOUNTESI / CATAMOUNT

September, 2006 Waiver Amendment Request submitted to CMS for approval of premium assistance programs

November, 2006 Report to Legislative Committees on fiscal implications (estimated costs and savings)

April, 2007 Draft Rules for Premium Assistance Eligibility Determination

July, 2007 Finalize Rules for Premium Assistance Eligibility Determination

August, 2007 CMS decision to only approve up to 200% FPL

October 1, 2007 Premium Assistance available for ESI and Catamount to eligible Vermonters

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Outreach and EnrollmentOutreach and Enrollment Integrated Medicaid, Catamount Outreach and Enrollment

Strategies• Aggressive Marketing and Education Campaign in Fall 2007• 1-800 number • New web-site• Pro-actively assist with eligibility screening and applications (complete

forms for people at key junctures)• Using state and local staff, partners and volunteers• Delayed Hard Launch (1 month) to identify and resolve implementation

issues

New Over-arching Brand:

Green Mountain Care – a healthier state of living

Re-tooling of Existing Application and Enrollment Processes

Phased-in New IT systems

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Coverage Implementation IssuesCoverage Implementation Issues

Estimating costs for new coverage plans

Estimating eligibles, take-up rates managing political expectations

Getting CMS approval for expansions

Administrative complexity, ERISA barriers for premium assistance programs

Motivating state bureaucracy change

Competing agendas reducing the uninsured versus managing state budget (enrollment, IT)

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FOCUS ON CHRONIC CAREFOCUS ON CHRONIC CARE

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Blueprint for HealthBlueprint for Health State’s Plan for Better Management and Prevention

of Chronic Illnesses across All Payers and Providers

Vision: Vermont will have a standardized statewide system of care that improves the lives of individuals with and at risk for chronic

conditions.

To achieve this vision, the Blueprint is:• Statewide system reform based on the Chronic Care Model• A public-private collaborative• Recognizes the central role of the patient and community• Designed around “Core System Competencies” rather than

disease programs• Is the state’s mandated standard for chronic care management

across all payers and providers

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Public PolicyPublic Health

Health Systems

Community

HealthProvider Team

Patients and Families

•Policies•Infrastructure•Financing•Resources•Advocacy•Regulation•Info. Systems

•System Policy•Quality Care•Service Development•Reimbursement•Financing•Continuity•Coordination•Info. Systems

•Built Environment•Programs and Services•Health Awareness•Healthy Options•Info. Systems

•Practice Standards•Info. Systems •Decision Support•Office Systems•Coaching/Support

•Health Knowledge•Self-Management •Skill and Practice•Supportive Home •Environment•Info. Systems

Blueprint for Health ModelBlueprint for Health Model

HealthierVVeerrmmoonntteerrss

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Examples of Blueprint ComponentsExamples of Blueprint Components

Public Policy Blueprint legislation and fundingExecutive Director at Governor’s Office levelIntegration of health disparities/minority healthInternal coordination—Chronic Disease

Community Blueprint physical activity opportunitiesWalking maps, walking programs

Self-Management Healthier Living Workshop—All conditionsOver 40 statewide; 500+ enrolled+60% reduction in MD and ED visits post at one year

Information Systems Practice based disease registries EMRs

Health Care Practice Consensus treatment standards—Diabetes and AsthmaPhysician coordination—dedicated medical director6 Communities (HSAs); 200 primary care practices

Health Systems Insurance company collaborationRequired payment reform in 2 pilots in 2008

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Other Chronic Care Strategies Other Chronic Care Strategies To Be Aligned with the BlueprintTo Be Aligned with the Blueprint

Medicaid Chronic Care Management Program

State Employee Health Benefit Programs

State-approved Employer-Sponsored Insurance (ESI) Plans for Premium Assistance

Catamount Health Plans

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Blueprint Alignment TopicsBlueprint Alignment TopicsAcross Chronic Care ProgramsAcross Chronic Care Programs

Coordination of care across the multiple programs working with the same providers and patients

Agreement on best practices for all chronic diseases

Use of a consistent health risk assessment

Referrals to patient self-management resources

Coordination of IT initiatives to improve access and support clinical decision making

Use of consistent metrics for provider feedback, profiling and measurement

Changing and aligning payer fee structures to provide incentive to reward quality (e.g., pay-for performance, payment reforms)

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Blueprint Impact on Health Care CostsBlueprint Impact on Health Care Costs It will not SAVE money – but it will reduce the rise in

cost of care

We do expect to reduce the cost per case for chronic illness by:• reducing hospitalizations• reducing complications• reducing specialist visits

So why doesn’t that save money?• Because when we take better care of chronic illness we prolong productive

life• Because more people are developing chronic illness, especially with the

obesity epidemic• That means more people in Vermont with chronic illness• More cases at less cost per case still means more total health care cost for

the population

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Health Information TechnologyHealth Information Technology

VITL = Statewide Regional Health Information Organization (RHIO)

• State Health Information Technology Plan• Medication History Pilot Project

Implemented at 2 Hospital Emergency Rooms in April, 2007

Chronic Care Information System (Disease Registry)• First community site (Mt. Ascutney) for diabetes will be implemented

in December, 2007

Electronic Health Records supported statewide

Master Provider Index, Multi-payer Database

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Blueprint, IT Implementation IssuesBlueprint, IT Implementation Issues

Private Payer Resource Commitments

Provider Belief, Vision

Provider Costs for IT Implementation

IT Privacy Issues

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Reform FinancingReform Financing

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Financing of ReformsFinancing of Reforms

Based on the principle that everybody is covered and everybody pays:• Catamount Health Plan: individuals pay sliding scale

premiums based on income

• Employers pay an assessment based on number of uncovered employees

• Increases in tobacco taxes

• VHAP savings due to Employer-Sponsored Insurance (ESI) enrollment

• Cost avoidance due to better chronic care management

• Matching federal dollars via Global Commitment 1115 waiver

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Employer ContributionEmployer Contribution Assessment for “uncovered FTEs”

• Employers without a plan that pays some part of the cost of insurance of its workers must pay the health care assessment on all employees.

• Employers who offer coverage* must pay the assessment on:

Workers who are ineligible to participate in the plan

• New amendment: If the employer offers insurance to all full time employees, they do not have to pay the assessment on seasonal or part-time employees

who have coverage from another source (unless it is Medicaid or VHAP).

Workers who refuse the employer’s coverage and do not have coverage from some other source.

Assessment does NOT enroll employees in Catamount Health!

* Employers plan must include hospital and physician coverage to qualify

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Employer ContributionEmployer Contribution Employee = any individual 18 years or older on employer’s unemployment

insurance filing• Based on the unemployment insurance definition of employee; excludes the following:

Workers on small farms Full time college students working at the college in a program designed to provide financial assistance Elected officials Emergency volunteers such as volunteer fire fighters Licensed insurance and real estate sales Foreigners temporarily in Vermont on cultural exchange (J-1) visas Foreigners in Vermont on temporary foreign agricultural (H-2A) visa

$365 / year Fee per Uninsured FTE (2007)• Assessed quarterly - $91.25 / FTE / Qtr• FTE = number of employee hours worked during a calendar quarter divided by 520 (based

on 40 hour work week maximum)• Exempts 8 FTEs in 2007 & 2008; 6 FTEs in 2009; 4 FTEs thereafter

Annual Fee indexed to Catamount Health premium increases

*

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What about ERISA?What about ERISA? Employee Retirement Income Security Act of 1974

• Regulates private sector pension programs and employee benefit programs, including health coverage

• Prevents states from regulating the benefit plans of any employer • Does not prevent states from regulating insurers• Courts have used 2 prongs to determine whether a state law is in

violation of ERISA:1) Does the state law relate to ERISA plans (i.e., private sector,

employer-sponsored plans) because it:– Directly refers to ERISA plans (by imposing obligations or treats them

differently)?– Regulates areas ERISA addresses (such as reporting, disclosure, or

remedies)?– Regulates an ERISA plan’s benefits, structure or administration? and/or– Imposes substantial costs on ERISA plans?

2) Is it a law that regulates insurance (which is allowed)?

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What about ERISA?What about ERISA? We do not believe that Vermont’s Employer Assessment law

does not meet the standards to be in violation of ERISA:

• Overall: It is a funding source and is not a mechanism intended to, or is likely to, affect change in an employer’s decision about whether to offer coverage or type of coverage

• Specifically, It does not directly refer to ERISA plans by imposing obligations or treating

them differently – Nothing in our law dictates that 1) employers offer coverage or 2) anything about

the coverage offered by employers– The law is neutral about whether employers choose to offer coverage or pay the

assessment

It does not contain any areas of regulation that are contained in ERISA (such as reporting, disclosure, or remedies)

It does not regulate ERISA plans’ benefits, structure or administration

The $91.25 / FTE quarterly assessment does not meet the standard for “imposing substantial costs”

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Key DatesKey Dates

EMPLOYER CONTRIBUTION

September, 2006 Draft Rules Distributed for Public Comment

December 13, 2006 Final Rules Approved

January 15, 2007 Report on Inclusion of Seasonal Employees

April 1, 2007 Assessment Implemented (to be paid at end of 4th Quarter – June 30, 2007)

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Employer Contribution Implementation Employer Contribution Implementation IssuesIssues

ERISA barriers to good revenue estimates

As of October 2nd, received 78% of estimated 1st Quarter (due July 31st) revenue ($1.37 m of $1.75 m)• 406 (of 20,833 total) employers did not submit a UI/HC report

at all (typical 2% delinquency rate at this point in the process)

• 350 employers left HC portion of UI reporting form blank or used old UI-only forms

• 3,000 employers reported zero FTEsUse intermediaries (e.g., payroll services)Have out-of-state headquartersHave 40 or more employees

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Reform OversightReform Oversight Joint Legislative Commission on Health Care Reform

• Monthly meetings

Reports on Reform Progress

• Five-year plan for Health Care Reform Implementation, including recommendations for administration or legislation (December 1, 2006)

• Annual Administration Reports on Reform Progress (January 15)

• Multiple Reports on Enrollment, Costs

Universal Coverage/Individual Mandate - 2011• If Vermont has less than 96% of the population insured in 2010, the

Health Care Reform Commission must submit a plan to increase health care coverage to ensure universal access, including individual mandates

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For more information

Vermont Health Care Reform Web-site:

www.hcr.vermont.gov

Health Care Coverage Information:

www.GreenMountainCare.org

1-800-250-8427