THE COMMONWEALTH

FUND

State Insurance Plus Initiatives

Cathy SchoenSenior Vice President, The Commonwealth Fund

Alaska Work Shop Panel: National Overview and State Strategies

Anchorage, AlaskaDecember 7, 2006

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THE COMMONWEALTH

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Moving Forward: Recent State Strategies to Expand Insurance

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Massachusetts Health Plan

• MassHealth expansion for children up to 300% FPL; adults up to 100% poverty

• Individual mandate, with affordability provision; premium subsidies between 100% and 300% of poverty

• Employer mandatory offer, employee mandatory take-up

• Employer assessment ($295 if employer doesn’t provide health insurance)

• Connector to organize affordable insurance offerings through a group pool

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

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Massachusetts Strategies for Coverage: Building Blocks for Reform

• Builds on past low income expansion

• Subsidized insurance• Uncompensated Care

pool reform• The Connector

Government

Individuals

Employers

Health CareSystem

• Individual Mandate

• Fair Share Assessment• “Free Rider” provisions• Mandatory “cafeteria

plans”

• Meet quality and performance standards

• New levels of “transparency”

• Adjust to payment changesExpandedCoverage

Source: A. Lischko, “Massachusetts Health Reform.” NASHP 19 th Annual State Health Policy Conference, Pittsburgh, PA (October 16, 2006) and Alliance for Health Reform Briefing, November 2006.

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Maine’s Dirigo Health: Knitting Together Public, Private and Employer Insurance

• New insurance product; sliding scale deductibles and premiums below 300% poverty

• Employers pay fee covering 60% of worker premium

• Began Jan 2005; Enrollment 14,700 as of 4/30/06

• Combined with expanded public

* After discount and employer payment (for illustrative purposes only).

300600

8881188

1488

1250

0

1000

750

500

250

0$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

MaineCare <150% <200% <250% <300% >300%

Deduc tible amountEmployee share of annual premium

Annual expenditures on deductible and premium

$550

$0

$1,100

$1,638

$2,188

$2,738

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Building Quality Into RIte CareHigher Quality and Improved Cost Trends

• Low income insurance expansion

• Quality targets and $ incentives

• Improved access, medical home

– One third reduction in hospital and ER

– Tripled primary care doctors

– Doubled clinic visits

• Significant improvements in prenatal care, birth spacing, lead paint, infant mortality, preventive care

Source: Silow-Carroll, Building Quality into RIte Care, Commonwealth Fund, 2003. Tricia Leddy, Outcome Update, Presentation at Princeton Conference, May 20, 2005.

Cumulative Health Insurance Cost Trend

Comparison

0

20

40

60

80

100

120

140

160

RI Commercial Trend

RIte Care Trend

Percent

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Rhode Island:Five-Point Strategy

1. Creating affordable plans for small businesses & individuals2. Increasing wellness programs 3. Investing in health care technology 4. Developing centers of excellence 5. Leveraging the state’s purchasing power

• RI Quality Institute – Non-profit coalition -- hospitals, providers, insurers, consumers,

business, academia & government– Partnered with “SureScripts” to implement state-wide electronic

connectivity between all retail pharmacies and prescribers in the state

• Health Information Exchange Initiative– Statewide public/private effort– AHRQ contract 5 yr/ $5M– Connecting information from physicians, hospitals, labs,

imaging & other community providersTHE

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Illinois All-Kids

• Effective July 1, 2006• Available to any child uninsured for 6 months or more• Cost to family determined on a sliding scale• Linked to other public programs - FamilyCare & KidCare • Federal and state funds

– Children <200% of FPL covered by federal funds– Children 200%+ of FPL funded by state savings from

Medicaid Primary Care Case Management Program • All-Kids Training Tour

– Public outreach program to highlight new and expanded healthcare programs

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New Jersey Raises Age of Dependent Status for Health Insurance

• Rapid increase in uninsured young adults since 2000

• Several states have expanded age of dependents

• As of 5/2006, NJ requires all state insurers to raise dependent age limit to 30

– Highest age limit in country – Covers uninsured, unmarried

adults with no dependents, NJ residents or FT students

– Premium capped at 102% of amount paid for dependent’s coverage prior to aging out

• 200,000 young adults expected to receive coverage

11.2 11.812.7 13.4 13.7

0

5

10

15

2000 2001 2002 2003 2004

Source: S.R. Collins et al., “Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help,” Commonwealth Fund issue brief, May 2006. (Analysis of the March 2001–2005 Current Population Surveys)

Millions uninsured, adults ages 19–29

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West Virginia Small Business PlanLeveraging Purchasing Power

• Enacted March 2004

• Partnership between WV Public Employees Insurance Agency (PEIA) & private market insurers

• Small business insurers pay providers at same rates negotiated by PEIA

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Minnesota Smart-Buy Alliance

• Initiated in 2004 – alliance between state, private businesses, and labor groups

• Purchase health insurance for 70% of state residents ~3.5 million people

• Pool purchasing power to drive value in health care delivery system

• Set uniform performance standards, cost/quality reporting requirements & technology demands

• Four key strategies:

1. Reward or require “best in class” certification

2. Adopt and utilize uniform measures of quality and results

3. Empower consumers with easy access to information

4. Require use of information technology

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Wisconsin

• Wisconsin Collaborative for Healthcare Quality

– Voluntary consortium formed in 2003 -- physician groups, hospitals, health plans, employers & labor

– Develops & publicly reports comparative performance information on physician practices, hospitals & health plans

– Includes measures assessing ambulatory care, IT capacity, patient satisfaction & access

• Wisconsin Health Information Organization

– Coalition formed in 2005 to create a centralized health data repository based on voluntary sharing of private health insurance claims, including pharmacy & laboratory data

– Wisconsin Dept of Health & Family Services and Dept of Employee Trust Funds will add data on costs of publicly paid health care through Medicaid

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Several States Looking to More Comprehensive Health Reform Statewide

• Maine, Maine, Vermont, Rhode Island have quality initiatives built into coverage expansions

• Maine

– Created Maine Quality Forum to advocate for high quality health care and help Maine residents make informed health care choices.

• Massachusetts

– Cost and Quality Council formed

• Vermont

– Quality improvement initiatives

• Interest in joint purchaser strategies – public and private payers collaborate to share information and leverage

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What Are the Goals of More Universal Coverage?Insurance as Foundation to Improve System Performance

• Meaningful, affordable, and equitable access

• Broad risk pooling– Eliminate insurance market incentives that reward avoidance of

health risk or cost shifting

• Use insurance as foundation to facilitate system-wide - – Timely, appropriate and effective care – Enhanced primary, preventive and well-coordinated care– More effective chronic care

• Lower insurance administrative costs by simplification and more efficient coverage– Stable coverage with seamless transitions– Reduce marketing, underwriting and overhead costs– Simplification and coordination

• Use insurance expansions as a vehicle and foundation to achieve more integrated, high quality and efficient care

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State Strategies to Expand Coverageto Provide a Foundation to Improve Access, Quality

and Cost Performance • Develop blueprints toward more universal coverage

• Coherent policies that maximize connection and minimize complexity

• Expand public programs and “connect” with private

• Provide financial assistance for affordability – premium assistance; “buy-in” provisions

• Assure benefit designs cover primary, preventive and essential care

• Pool risk and purchasing power, with multi-payer collaboration

• More efficient insurance arrangements and simplification

• Pool purchasing power

• Develop reinsurance or other financing strategies to make coverage more affordable, pool risk and stabilize group rates

• Shared responsibility: mandate that employers offer and/or individuals purchase coverage

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The rich

CATEGORIES OF PEOPLE IN THE U.S. HEALTH INSURANCE SYSTEM

The poor

The near poor

The broad middle class

The Young

Working-age people

People age 65 and over

The 47 million or so

uninsured tend to be near poor

The federal-state Medicaid

program for certain of the

poor, the blind and the disabled

The employed and their families who are typically covered through their jobs, although many small employers do not provide coverage.

For the rich, “Disneyland” the sky-is-the limit policies without rationing of any sort (Boutique medicine)

Near poor children may be temporarily covered by Medicaid and S-Chip, although 7-8 million are still uninsured.

Persons over age 65, who are covered by the federal Medicare program, but not for drugs or long-term care. Often the elderly have private supplemental MediGap insurance

The very poor elderly are also covered by Medicaid

QUIMBIESSLIMBIES

Source: Professor Uwe Reinhardt, Princeton University

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Making Coverage More AutomaticEmployer vs. Public Insurance

Source: Based on D. Remler, S. Glied “What Can the Take-Up of Other Programs Teach Us: Increasing Participation in Health Insurance Programs,” Am. J. of Public Health, January 2003.

Payroll deduction

85%-90% participation rates

Take a job

Decide to participate; choose plan

Employee Health Benefit Decision

Learn about programs

Obtain an application

Apply and prove eligibility

Choose plan

Periodic proofof eligibility

Make regular payments

by check or money order

40%-70% participation rates

Low Income Public ProgramApplicant Decision