State-Level Advocacy to Improve Health Insurance Coverage:

A Texas (Worst) Case Study

CFED Assets & Opportunity InstituteWashington, D.C.

September 24, 2009

Anne Dunkelberg, Assoc. Director, dunkelberg@cppp.org900 Lydia Street - Austin, Texas 78702

Phone (512) 320-0222 (X102) – www.cppp.org

The Family Budget Estimator (FBE) Project provides a realistic picture of how much it costs Texas families in different areas of the state to meet their basic needs.

www.cppp.org/fbe

Health Care and Family Self-SufficiencyUnlike food, shelter, transportation, and education, the cost of

needed health care varies wildly across otherwise similarly-situated families

• A family with serious chronic condition, illness or injury may need hundreds of thousands in care in a year, while one with routine needs may need only thousands for basic preventive and primary care.

Current public programs:

• cover too few adults,

• end coverage abruptly at arbitrary income points (“cliffs”), creating disincentives for increased earnings

• Often present major barriers to enrolment by eligible persons

No system to fully address (in a progressive manner) the mismatch between AVERAGE costs of family coverage ($13,000-$14,000 a year) and median family incomes: e.g., ~$47,000 overall, $64,000 family of 4

No system to ensure that all can purchase coverage at or near the average cost; thus average costs are meaningless - can even be misleading

Health Care and Family Self-SufficiencySocial Security, Medicare, SSI, and Medicaid coverage of long

term care (70% of US nursing home residents) have made it possible for the generations since their creation to develop assets for home ownership, higher education, and general economic advancement.

Income and assets without them would have been devoted to the care of parents.

A progressively financed system of affordable comprehensive care for every income level will have a similar effect on enabling many more families in poverty to reach and hold middle class income and assets.

Child well-being directly improved when parents have access to physical and behavioral health care they need.

CPPP’s Texas health care work:• Educating Texans: uninsured, our lack of real

systems• Expanding public coverage eligibility

(Medicaid, CHIP)• Improving/protecting Medicaid-CHIP benefits• Reducing Barriers to Enrollment & Renewal• Private Insurance market regulation to

increase affordability• Promote National Reform: for most

comprehensive solution

Who is Uninsured in Texas?• 5.96 million total uninsured (2007)

– 4.3 million adults: 57% are below 200% FPL– 1.5 million kids (0-18): 22% of Texas children under age 19:

• 491,000 uninsured children live in families below the poverty line;• 472,000 uninsured children live in families between one and two times

the poverty line (100-200% FPL); • 339,000 uninsured children live in families between two and three times

the poverty line (200-300% FPL); and, • 208,000 uninsured children live in families above three times the poverty

line.

• Just under two-thirds of uninsured Texas children (64%) are in families below 200% FPL. – About 250,000 (roughly) uninsured Texas kids may be

undocumented and CANNOT get children’s Medicaid or CHIP.– This means 700,000-800,000⎯Half our uninsured children⎯are

eligible for Medicaid or CHIP right now, but not enrolled.• Texas HHSC estimates three-quarters are eligible for Medicaid, one-

quarter for CHIP.

Uninsured Texans by Age Group, 200865+

0-18

19-64Rate: 32% of

19-64 are Uninsured

Rate: 20% of 0-18 are uninsured

~2/3 are below

200% FPL57% are below

200% FPL

Source: U.S. Census

0

5

10

15

Under 19 19 to 64 65 and over

Millions of Texans

Job-based coverage Medicaid Medicare Uninsured

Working-Age Texans Are Most Likely to be Uninsured

19% uninsured

3% uninsured

32% uninsured

Source: CPS Annual Social & Econ. Supplementwww.census.gov/hhes/www/hlthins/hlthins.html

Employed65%

Unemployed7%

Not in Labor Force28%

Uninsured by Labor Force Status, 2007-08 Average

2 Out of 3 Uninsured Working-Age Texans Have a Job

Source: CPS Annual Social & Econ. Supplementwww.census.gov/hhes/www/hlthins/hlthins.html

57.4 56.253 53 54 53.1 52.2 50.4 49.5

64.2 63.2 61.9 61 60.5 60.2 59.7 59.3 58.5

30

45

60

75

2000 2001 2002 2003 2004 2005 2006 2007 2008

% of Residents With Job-Based Insurance

Employer-Sponsored Coverage Declining in Texas and Nationwide, Even Before Recession

U.S. Average

Texas

Source: CPS Annual Social & Econ. Supplementwww.census.gov/hhes/www/hlthins/hlthins.html

U.S.-born citizen68%

Naturalized U.S. Citizen

6%

Not a U.S. Citizen26%

Uninsured by Citizenship Status, 2007-08 Average

Most Uninsured Texans are U.S. Citizens

Source: CPS Annual Social & Econ. Supplementwww.census.gov/hhes/www/hlthins/hlthins.html

Uninsured Problem Will Worsen Without Health Reform

Projected Uninsured Rate (%), 2010

Source: Methodist Healthcare Ministrieswww.mhm.org/advocacy/pdf/UninsuredData

ProjectionsJanuary2009.pdf

Texas average: 25.5%

Texas Medicaid: Who it Helps

Children, 1,905,520

Disabled, 391,382

Elderly, 373,686

Poor Parents, 116,141

TANF Parent, 28,059

Maternity, 92,271

April 2009, THHSC data.

Total enrolled 4/1/2009: 2.9 million

Because children account for over 2/3 of enrollment,

12-month renewals WOULD transform workload for entire

program

Income Caps for Texas Medicaid and CHIP, 2009

0%

50%

100%

150%

200%

250%

PregnantWomen

Newborns Age 1-5 Age 6-18 TANFparent of

2, noincome

WorkingParent of

2

SSI (agedor

disabled)

LongTermCare

CHIP

Mandatory Optional

$24,352/yr

$33,874/yr $33,874/yr

185% 185%

133%

$18,310

100% $2,256 $3,69612.3% 20.2%

74%

$7,884222%

$24,264$36,620

200%

Income Limit as Percentage of Federal Poverty IncomeAnnual Income is for a family of 3,

except Individual Incomes shown for SSI and Long Term Care

Why Very Few Poor Parents are Enrolled in Texas Medicaid

• Texas Medicaid income cap for poor parents, 12.8% of FPL or $188 per month for a family of 3, has not been increased by our Legislature for 24 years (last update: 1985).

• Working poor parents in Texas can get Medicaid now ONLY if they earn less than the legislatively-imposed income cap of $308 per month (e.g., for mother of two).

• Forces poor parents with high medical needs to choose between work and health care; 11 hours of work per week at minimum wage ($6.55 per hour) makes them “too wealthy” to get Medicaid.

• Texas can increase the Medicaid income limit for parents to any level it chooses, without any special federal approval. The only limiting factor is our willingness to put up our state’s share (about 40%) of the costs.

• Today, fewer than 134,000 poor Texas parents get Medicaid, though– there are about 836,000 poor parents in the state – 61% of adult Texans 18-64 below poverty are uninsured

Texas CHIP Enrollment(May 2000- August 2009)

0

200,000

400,000

600,000

May-00

Oct-00

Mar-01

Aug-01

Jan-02

Jun-0

2Nov

-02Apr

-03Sep

-03Feb

-04Ju

l-04

Dec-05

May-05

Oct-05

Mar-06

Aug-06

Jan-07

June

-07Nov

-07Apr

-08Sep

-08Feb

-09Ju

l-09

Source: Texas Health and Human Services CommissionDoes not include CHIP Perinatal program.

Highest, 5/02: 529,271

9/03: 507,259CHIP Cuts Begin

8/09: 490,603Child Medicaid

Simplified

9/07: HB 109

Texas Child Medicaid Enrollment(February 2001 – August 2009)

2006 low:1,720,025

1,000,000

1,300,000

1,600,000

1,900,000

2,200,000

Feb-01

Jul-0

1Dec

-01May

-02Oct-

02Mar-

03Aug

-03Ja

n-04Ju

n-04

Nov-04

Apr-05

Sep-05

Feb-06

Jul-0

6Dec

-06May

-07Oct-

07Mar-

08Aug

-08Ja

n-09Ju

n-09

Source: Texas Health and Human Services Commission1/2007 to present include newborn CHIP “perinates”; last month is preliminary due to lag

Simplified Enrollment begins under SB 43

12/2005 High: 1,838,239

August 2009:2,015,117

Texas Child Medicaid and CHIP Enrollment

1.5

2.0

2.5

3.0

Jan 02

Apr 02

Jul 0

2Oct

02Ja

n 03Apr

03Ju

l 03

Oct 03

Jan 04

Apr 04

Jul 0

4Oct

04Ja

n 05Apr

05Ju

l 05

Oct 05

Jan 06

Apr 06

Jul 0

6Oct

06Ja

n 07Apr

07Ju

l 07

Oct 07

Jan 08

Apr 08

Jul 0

8Oct

08Ja

n 09Apr

09Ju

l 09

Enro

llmen

t (m

illio

ns)

0.5

1.5

2.5

3.5

4.5

5.5

6.5

Chi

ld p

opul

atio

n (m

illio

ns)

Sources: Enrollment from Texas Health and Human Services Commission; Texas State Demographer's 0-17 Population Estimates

Sept. ’03: 2,150,543

August ‘09:2,505,720

Estimated child population growth is almost 70,000 per year

Combined CHIP/Child Medicaid Enrollment

Staffing Levels and Workload

0

5,000

10,000

15,000

Num

ber o

f sta

ff

01002003004005006007008009001,000

Wor

kloa

d

Eligibility Staff 9,606 9,668 9,142 8,446 7,573 6,676 5,975 6,381 6,659 7,377 8,519

Recipients per w orker 367 374 442 561 691 814 946 849 782 769

FY 00

FY 01

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09*

FY '10**

*Estimated recipients per w orker. **Number of w orkers if additonal staff are approved under Rider 61.

Eligibility Staff Shortage: A Vicious Cycle

The Texas CHIP Coalition was formed in 1998 to work for

the establishment of a strong Children’s Health

Insurance Program in Texas. Today, our broad-based Coalition continues to work to improve access to health care for all Texas children, whether through Medicaid, CHIP, or private

insurance.www.texaschip.org

Texas CHIP Coalition Statewide Organizations, 81st SessionAARPAdvocacy Inc.AMERIGROUP Community CareAny Baby Can of TexasCatholic Health Association of TexasCenter for Public Policy PrioritiesChildren's Defense Fund of TexasChildren's Hospital Association of

Texas (CHAT)Christian Life Commission, Baptist

General Convention of TexasCoalition for Nurses in Advanced

PracticeCommunity Health Choice, IncFamily Medicaid Access ProjectLa Fe Policy Research and Education

CenterLeague of Women Voters TexasMarch of DimesMental Health America of TexasMethodist Healthcare MinistriesNational Council of Jewish Women,

Texas State Public Affairs

Superior Health PlanTeaching Hospitals of TexasTexas Association of Health PlansTexans Care For ChildrenTexas Academy of Family PhysiciansTexas American Federation of

Teachers (Texas AFT)Texas Association of Community

Action Agencies, Inc. (TACAA)Texas Association of Community

Health CentersTexas Children’s Hospital Texas Dental AssociationTexas Hospital AssociationTexas ImpactTexas Medical AssociationTexas Nurses Association Texas Network of Youth ServicesTexas Pediatric SocietyTex Protects: The Texas Association

for the Protection of ChildrenUnited Ways of Texas

100-200% FPL

300-400% FPL

<100% FPL

200-300% FPL

> 400% FPL

Uninsured Texas Children, (0-18) 2007-2008

By Family Income

Total uninsured children: 1.418

millionUS Census, March 2008 & 2009 CPS

Since 2003, Texas Kids in Moderate to High Income Families Saw the Biggest Increases in Number of Uninsured

4.3%

-5.0%

29.5%

16.4%

Below 100% 100% to below 200% 200% to below 300% 300% and above

Source: 3-year average data (2002-2004 vs. 2006-2008) for children ages 0-18, Current Population Survey, U.S. Census Bureau

Number of Uninsured Kids betw een 100-200%

poverty declined

Wor

seBe

tter

0.0

2.5

5.0

7.5

2000 2001 2002 2003 2004 2005 2006 2007 2008

Millions of Texas Children (Under 19)

Medicaid and CHIP Critical for Children’s Coverage

Uninsured

Employer-sponsored insurance

Medicaid

Medicare or Military

CHIP

Source: CPS Annual Social & Econ. Supplement, www.census.gov/hhes/www/hlthins/hlthins.htmlTexas Health and Human Services Commission, Medicaid and CHIP data

State Regulation of Health Insurance• RATES for H.I. virtually unregulated:

– Under Texas law today, small employers pay an average high premium of $22,000 a year for a single worker.

– 2003-2006 medical loss ratio averaged 72% in small employer market, 84% in large, but wide range between companies—from 22% percent to 267% share of premiums spent on medical care.

• 2009 CPPP advocacy & education on above, gains include:– First time subsidy in high-risk pool– new Healthy Texas small employer reinsurance program– Continuation reforms to extend ARRA subsidy– Damage control on default program for IV-D children– Revival of coalition work, public and lawmaker education

Texas Voice for Health Reform Principles

1. Affordable Access to Good Health Care Must be Available for All Americans. It should:

• Be affordable for people at all income levels • Remain available and affordable when family and economic circumstances change• Establish both a responsibility for the public to contribute and an assurance of cost containment

for individuals and families• Eliminate health costs as the #1 cause of bankruptcy in America.

2. A Decent Standard of Comprehensive Care Must Be Established. It should:

• Keep people healthy and treat them when they’re ill• Cover the whole person• Not be lost or reduced based on pre-existing conditions or pregnancy

• These first 2 steps will not happen by accident: Americans must choose to do this and demand it.

3. To be effective, sustainable, equitable, and balanced with our other important priorities as a nation, national health reform should also address safe and high quality care; costs and cost-effectiveness of health care; consumer choice; and eliminating non-financial barriers to care

• Just working on Step 3 will not make Steps 1 or 2 happen.

• Three bills being drafted: Senate Finance; Senate HELP; House “Tri-Committee” (E&C, W&M, Ed & Labor)

– Senate Finance: Bill to be released this week, concerns that they are cutting back by reducing affordability subsidies, protections.

– HELP: passed out of committee• Will have to be merged with Finance bill when it is passed.

– House: bill filed Tuesday July 14. Each of 3 committees made amendments which must be reconciled in September before a full House vote can happen.

• House-Senate compromise process starts as soon as Chambers vote their bills.

• If successful, bill could be voted on and signed in November, December.

• If no deal reached, large portions of (but not all of) reform can/will be passed through “Budget Reconciliation,” but this is less than ideal, both politically and from policy standpoint.

– Budget Reconciliation only requires 51 Senate votes, but limits what you can do.

Health Reform Process

• Key elements BEING CONSIDERED:– If you like what you have now, you can keep it.– Medicaid expansion (e.g., cover all up to 133% FPL: $14,404 for one; $29,327 for 4).

– Reform Private Health Insurance: standardize benefits, limits on price variation, no denial of coverage, no excluding pre-existing conditions, no annual or lifetime maximums. Changes focused on individual and small employer coverage.

– Create health insurance exchanges where participating private options can be compared and purchased (like Amazon or Travelocity for insurance).

• Will there be a Public or Non-profit plan option?

– Premium assistance up to 300% or 400% of FPL? ($66,150 to $88,200 for family of 4)

– Out-of-pocket caps, too, to ensure real affordability/end (reduce?) medical bankruptcy

– Individual mandate to have coverage: but only if affordable coverage exists!

– Requirements for employers to contribute, with exemptions for smallest employers; One idea is a requirement to help pay for only employees who use Medicaid or get premium assistance (latter approach is opposed by advocates for low-income Americans).

Health Reform Basics

• Every Texan will have new health security. You cannot lose, be denied, or priced out of coverage no matter your age, health status, or employment status.

• Annual caps on out-of-pocket costs and no annual/lifetime benefit limits mean critical financial protection at all income levels that does not exist today.

• About 4.5 million Texans would gain coverage– About 1 million uninsured Texan adults would get Medicaid—up to 133%

FPL

– About 2.3 million uninsured Texans would get premium assistance--above Medicaid and below 400% of poverty ($88,200 for family of 4)

• Small businesses and individuals can pay what large businesses do for health insurance. Under Texas law today, small employers pay an average high premium of $22,000 a year for a single worker.

• Depending on wages they pay businesses with fewer than 25 employees (67% of Texas business) can get tax credits to cover up to ½ the cost of coverage.

Benefits of Health Reform

• Medicaid expansion—up to 133% FPL.– CPPP CONSERVATIVELY estimates the Medicaid expansion alone will add $3.7 billion a year

in new federal dollars to the Texas economy ($3.3 if 90% federal share); with a multiplier effect of $10 to $12 billion a year, and

– could convert Texas from being a “donor state” that sends more to DC in taxes than we get back by covering low-income adults in Medicaid.

– What share will Texas have to pay for required Medicaid expansions & increased Medicaid provider payment rates?

• 100% federally-funded in House proposal; E&C amends to 90% from year 3 onward• But Senate may push to “phase back” over time to a state-share formula

• Premium subsidies—up to 400% FPL– even more funding will flow to Texas from premium assistance to low-to-moderate income

families

• Goal is to make the final bill 100% paid for (combo of cuts/savings and new revenues); if “pay-fors” are cut, expect to see loss of affordability and/or health benefits!

• Long list of provisions would reduce cost, improve quality of care, but MORE may be added before a bill is passed.

Cost of Health Reform

How Advocacy Landscape Changes if Reform Bill Passes

• Below/Near Poverty Income: will eligibility system bottlenecks prevent coverage?

• Low-Moderate Income: Will premium and out-of-pocket cap assistance be affordable? If not:– Financial penalties and no coverage?– Exemption from penalties, but still uninsured?

• Middle+ Income: Will market/rating reforms be adequate to assure affordability?– House & HELP limit age rating 2:1; Senate Finance 5:1 will make

premiums unaffordable for many over 40.– Need “Hard Cap” included in House bill on out-of-pocket costs (over

75% of medical bankruptcies in 2008 were to INSURED persons)• Safety Net Care: Will be needed for undocumented (possibly

LPRs, too) ; MAY be needed for low-income if coverage not affordable.

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