Overview and Analysis of Key Dirigo Health Components A perspective prepared by Consumers for Affordable Health Care with modifications from the Governor

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Overview and Analysis of KeyDirigo Health
Components A perspective prepared by Consumers
for Affordable Health Care with modifications
from the Governors Office of Health Policy and
Finance October 2003
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Overview

DIRIGO HEALTH
Health Reform for Maine
Legislature
Governor

Approves
Appoints
Dirigo Health Board of Directors
Governors Office of Health Policy and Finance
Commission to Study Maines Hospitals
Public Purchasers Steering Committee (state
employees, Corrections, MEA, MMA, MaineCare)
Advisory Council on Health Systems Development
State Health Planning Document
Advisory Council

• Dirigo Health Insurance
• Private carriers
• (subsidized health care to 300 FPL)
• Bad Debt and Charity Care Recovery

Task Force on Veterans Health Services Dept.
of Defense, Veterans and Emergency Mgt.
Maine Quality Forum
DPFR
DHS

• Insurance Regulation
• - Rate justification small group
• - Actuarially validated rate filing
  large group
• Require physician electronic billing

• CON
• Annual Public Health needs/data
• MaineCare expansion

Maine Health Data Organization
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Dirigo Health is Maines new voluntary health plan

• Individual and small business participation and
  payments are voluntary
• Businesses and individuals can keep their current
  coverage if they so choose
• Existing insurance products will still be
  available

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Conceptual framework for Dirigo

• Create Partnership Between Dirigo Health and
  Small Businesses
• Dirigo Health will arrange health coverage for
  small businesses and participating insurer(s),
  and provide a range of other benefits to members
• A portion of membership payments for low-income
  workers will be directed to MaineCare via
  interagency transfer
• Insurers receive payment from Dirigo Health or
  MaineCare
• Providers receive commercial reimbursement rates
  for all Dirigo members
• Extend Health Premium Assistance
• Current MaineCare eligibility expanded to higher
  income people
• Provide Workers and Families With Choice
• Adds option of receiving same assistance through
  qualified private insurers

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Dirigo will expand access to coverage with a
focus on

• Small Businesses (an eligible business means a
  business with at least 2 but not more than 50
  workers including municipalities w/ 2 - 50
  employees)
• Self-employed (includes sole proprietorships)
• Individuals Without Access to Job-based Coverage
  (from an Eligible Business)
• Dirigo Health Board may include large public or
  private employers in the future

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Criteria for Voluntary Participation by Small
Business

• At least 75 participation of eligible employees
  working at least 30 hrs./wk. with no other
  coverage
• Eligible employee is an employee of an eligible
  business who works at least 20 hrs./wk. but does
  not include temps or subs or employees working 26
  or fewer wks. per yr.
• 60 ceiling on employers contribution toward
  combined premium for full-time worker
• Employer share is prorated for part-time workers
  who work 20 or more hrs./wk. but less than
  full-time status.

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Individual Eligibility for Dirigo Health
Insurance

• Individuals without access to job-based coverage
  from an eligible employer (i.e., 2 - 50
  employees)
• Dirigo Health Board may prohibit coverage to an
  individual whose current employer dropped
  coverage within past 12 months
• Self-employed individuals
• Unemployed individuals qualify for coverage
• Exceptions may be established by Dirigo Health
  Board

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Benefit Package

• Not provided in statute Dirigo Board decides
• Governors May 5, 2003 materials described
  benefit package as follows
• Comprehensive
• No lifetime maximum
• Low deductibles (estimated at 250 - 500)
• Out-of-pocket maximums 1250/individual and
  2500/family
• Preventive coverage includes wellness care,
  nutrition counseling, smoking cessation, wellness
  education, cardiac rehab and routine vision
• Dental and eyeglasses are not covered, but may be
  ridered

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Dirigo Health Ends Premium Lockout

• Unlike traditional private insurance, Dirigo
  Health allows eligible employees and individuals
  at certain income levels to pay on a sliding
  scale basis and receive full coverage
• Dirigo Health provides sliding scale subsidies
  for those individuals with household incomes
  between 200 - 300 FPL
• 200 FPL 30,528/yr. for a family of 3
• 300 FPL means 45,780/yr. for a family of 3
• Enables individuals to contribute toward their
  coverage
• MaineCare (Medicaid) remains available to cover
  adults without children and disabled persons to
  125 FPL and parents and children to 200 FPL

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DH May Contribute to Coverage of Individuals
Working For Large Employers

• Dirigo Health may provide subsidies for the
  purchase of employer sponsored coverage paid by
  the employee after the first year of operation
• The employee who works for an employer with
  greater than 50 workers may qualify if s/he
• Is not eligible for MaineCare
• Has a household income below 300 FPL (family of
  3 45,780)
• These subsidies would offset the employees
  contribution in order to participate in the large
  employers plan

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Dirigo Health Gives Individuals Small
Businesses Coverage Choices

• Insurers will continue to offer individual and
  small group products
• Dirigo Health is simply one more option for
  individuals and small businesses to buy
• May enable small businesses to provide better
  coverage at a lower cost

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Cost Containment is part of Dirigo Health

• One-year moratorium on new CON projects
  (Executive Order, May 1, 2003) but allows CON
  projects already in pipeline on May 1st to go
  through usual review
• Sets a statewide Capital Investment Fund that
  limits capital expenditures and equipment
  purchases on an annual basis
• Extends CON to ambulatory surgical centers for
  capital expenses greater than 2.4 million and
  equipment costs greater than 1.2 million
• Reduces uncompensated care costs
• Asks hospitals to put a voluntary 3 limit on
  operating margins and 3.5 on cost increases
  (begins 9/13/03)
• Asks doctors and health care practitioners to
  voluntarily limit their net revenue to 3 (begins
  9/13/03)
• Asks health insurance carriers to put a voluntary
  3 limit on underwriting gains (begins 9/13/03)
• Requires electronic claims submission by 2005 w/
  loans and assistance to providers

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Funding Sources

• 53 million in federal fiscal relief in year one
• Voluntary contributions (individuals and small
  businesses)
• Federal matching dollars for MaineCare eligibles
• In year two and subsequent years, 4 savings
  offset payment (SOP) on health carriers,
  excess loss carriers and third party
  administrators to recover a portion of their
  premiums currently devoted to uncompensated care
  and use it to provide subsidies under DHI
• SOP is commensurate with savings achieved under
  Dirigo Health SOP is capped at 4

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Provider Reimbursement Rates

• Market rates
• Dirigo Health contracts with private health
  carriers that will administer claims and pay
  private market rates to health care providers

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Quality Improvement

• Maine Quality Forum (within Dirigo Health)
  coordinates data and quality initiatives
• Four primary functions
• Collect/disseminate evidence-based research
• Provide consumers with useable information to
  compare provider performance
• Consumer education to promote informed decisions
  and healthy lifestyles and
• Technology assessments to inform CON and State
  Health Plan.

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State Health Plan

• Established by Governors Office
• Requires an annual statewide health expenditure
  budget report to set priorities within the SHP
• Biannual State Health Plan - required report to
  the public that assesses progress toward meeting
  SHP goals
• Sets a statewide limit on CON spending
• Addresses major cost drivers major threats to
  public health and safety
• Strategies to address major cost drivers and
  public health goals
• Annual Public Health Report - required

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Price Disclosure

• Provide consumers with information about price
  and quality
• Requires publication of lists of average charge
  and disclosure of accepted payments at hospitals
  and physicians and other providers offices
• Focus on commonly performed services

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Commission to Study Maine Community Hospitals

• 9 person commission appointed by Governor
• Report and legislation by Nov. 1, 2004
• Collect and evaluate data regarding statewide
  hospital spending, funding mechanisms and
  reimbursement
• Study facility and equipment needs, financing
  options and capital needs
• Study roles of community hospitals in relation to
  other providers develops a blueprint for the
  future of Maines hospitals

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Strengthens Oversight of Insurance Costs

• Extends rate review process that is now applied
  to individual products to small group products
• Increases accountability to the public
• Makes rate information available to the public
• Standardizes carrier definitions of profit and
  underwriting gains
• Requires large group carriers to file actuarial
  certification with rate filings