State Approaches to Coverage in a Time of Budget Austerity

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State Approaches to Coverage in a Time of Budget
Austerity Ben Wheatley Senior Associate,
AcademyHealth Montana HRSA State Planning Grant
Steering Committee Helena, Montana November 14,
2002
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HRSA State Planning Grants

• Identify the uninsured population of the state
• Demographic characteristics
• Specific groupings (e.g., low-income, rural
  residents, minorities)
• Characteristics of employers that do and do not
  offer coverage
• Develop plans to provide coverage to the
  uninsured, especially through innovative state
  strategies

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HRSA Grantee States
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Rising Medicaid Expenditures Declining Tax
Revenues
11.7
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Medicaid Expenditures
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3.7
0
1998
1999
2000
2001
2002
State Tax Revenues
-10
Projected Source Kaiser Commission Survey of
Medicaid officials (2002) and Medicaid to
Stress State Budgets Severely into Fiscal 2003,
National Association of State Budget Officers,
March 2002
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Is THIS What We
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Key Themes in the New Environment

• Emphasis on cost containment
• Shift from coverage expansion to maintenance
• Low-cost/no-cost expansion options
• Program restructuring/new federal flexibility
• Trade-offs in benefit structure increase covered
  services or covered lives?
• Partnerships seeking to combine funding sources
  (federal, state, local, employer, employee)

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Coverage Expansion Strategies Examined by HRSA
Grantees

• Expansions of public coverage
• Medicaid, SCHIP, state-only programs
• Waivers (1115, HIFA, Pharmacy Plus)
• Eligible-but-unenrolled
• Public/private partnerships
• Employee premium subsidies
• Direct subsidies to employers
• Indirect subsidies
• Market mechanisms

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HIFA Flexibility

• Allows states to control costs while expanding
  coverage
• Benefits closer to commercial packages
• Increased cost-sharing
• Enrollment caps
• Streamlined waiver process
• Status
• Approved AZ, CA, CO, IL, ME, NM, OR
• Pending DE, MI, NJ, WA
• 1115 (HIFA clone) UT

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HIFA Waiver Flexibility
Population group Mandatory (categorically
eligible populations)
Benefit standards Traditional Medicaid benefits

• SCHIP benefits
• Federal employees
• State employees
• Largest commercial HMO
• Secretary approved

Optional (waiver not needed to cover, e.g.,
SCHIP kids Medicaid parents)
Expansion (waiver needed to cover, e.g., adults
with no kids)
Primary care benefit package
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Utahs 1115 Waiver Demonstration Primary Care
Network

• Adults (19-64) without coverage for 6 months,
  with income lt150 FPL
• Capped at 25,000 enrollees
• Benefits primary care, preventive, some
  emergency (no hospital or specialty physician
  services)
• 50 annual enrollment fee (with 1,000 cap)
• HB 122 to allow private sector to purchase the
  primary care package

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Public/Private Partnerships Employee Premium
Subsidies

• Medicaid Health Insurance Premium Payment (HIPP)
  program, established under OBRA 1990
• SCHIP Title XXI allows states to use SCHIP funds
  to pay the employee share of private coverage
• HIFA Encourages states to pursue premium subsidy
  approach
• Administratively complex, but offers states a
  funding partner

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Employer Subsidies to Increase Private Coverage
Offer Rates

• Direct subsidies to employers
• Direct payments (MA Insurance Partnership)
• Tax incentives (e.g., KS, ME)
• Subsidies must be substantial and stable over
  time to increase offer rates
• Indirect subsidies
• Reinsurance (e.g., Arizona Health Care Group)
• Risk corridors (e.g., Healthy New York)

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Market Mechanisms

• Small-group and non-group insurance market
  reforms (e.g., issuance requirements and rating
  restrictions)
• Purchasing pools
• Buy-ins to state employee pools
• Limited benefit products
• Educational efforts for consumers and small
  employers
• Administrative simplifications

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Innovative Safety Net Programs New Hampshires
HealthLink Program

• A pro bono health plan established in 1993
• Uninsured with incomes lt200 FPL are eligible
• Co-pay charges based on income
• Increases access by managing uncompensated care
• Provides care management to patients with
  multiple health and social service needs
• Provides pharmaceutical coverage to patients
  through BC/BS plan

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Delawares Community Healthcare Access Program
(CHAP)

• Infrastructure to identify uninsured individuals
  and screen for health status, utilization, and
  behaviors
• Checks for public program eligibility, or directs
  to CHAP network of volunteer or discounted health
  services
• Case management provided through CHAP care
  coordinators, emphasizing prevention and
  compliance
• 6-month redetermination used to evaluate change
  in health status, and estimate financial savings

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State Coverage Initiatives (SCI)

• Funded by The Robert Wood Johnson Foundation
• Direct technical assistance to states
• Meetings for state officials
• January 2003 conference Stretching Dollars and
  Building Partnerships
• Publications
• Grant funding
• Web site http//statecoverage.net

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