Maryland Health Care Reform

1
MarylandHealth Care Reform

• Alice Burton
• Chief of Staff
• Department of Health and Mental Hygiene
• February 5, 2007

2
Overview

• Background
• Impetus for expansion
• Working Families and Small Business Coverage Act
  of 2007
• Getting it done

3
Maryland Health Policy Strengths

• Unique All-Payer Hospital Waiver finances over
  800 million in uncompensated care
• Investments in data and transparency
• Leader in report card development
• Medicaid has stable delivery system -
  HealthChoice
• National leader in data driven rate setting
• 7 MCOs participate, covering 75 of Medicaid
  population
• Systems and incentives to manage care and improve
  quality
• High Risk Pool (MHIP) fills important gap in
  individual market

4
Health Insurance Coverage of the
NonelderlyMaryland and the United States,
2004-2005
61
Employment-based
68
18
Uninsured
16
3
Other Public
3
United States
13
Maryland
Medicaid
9
6
Direct purchase
5
Source Health Insurance Coverage in Maryland
Through 2005, MHCC, January 2007
5
MD Small Business More Likely to Offer Insurance
Than in Many Other StatesStill less than ½ offer
insurance
6
Public Coverage(Effective 07/01/06)
Pregnant Women
300
300
MCHP Premium
250
200
185
MCHP
133
Medicare
Percent Federal Poverty Level
100
Primary Adult Care Program 116 FPL
40
Medicaid
Age 65 and Over
19
6
1
0
Parents or disabled age 19 to 64
PW
Poverty Level 1 person 10,210 2 persons
13,690 4 persons 20,650 As of 1/24/2007
Note This chart is for illustrative purposes
only. Each coverage group has specific
eligibility and some asset requirements, which
are not shown.
7
Impetus for Expansion

• New Governor
• House leadership - call for expansion
• 1.5 Billion Budget Deficit need for new
  revenues
• Massachusetts Effect
• Readiness

8
Maryland significantly trails leading states in
Medicaid eligibility for parents
Adult Medicaid Eligibility, 2004-2005
Median Income and
300
Dirigo
Catamount
250
Commonwealth
200
150
Eligibility (FPL)
100
50
0
Maine
Maryland
Vermont
District of
Minnesota
Eligibility
Columbia
Massachusetts
State
9
State Small Business Initiatives - Lessons

• Significant subsidy needed for employers to begin
  to offer insurance
• Many initiatives attract self-employed or
  low-wage workers vs. small business groups
• Complex participation rules designed to target
  funding can stifle enrollment altogether
• Subsidy program operates in context of larger,
  competitive market
• Leaner benefit designs not likely to expand
  coverage, marketable benefit designs essential
• W/out subsidies or lower costs little reason to
  join exchange or pool.

10
Small Business Subsidy InitiativeTough Policy
Issues

• Crowd-out
• Include self employed and low wage workers
  without access to insurance
• How narrowly to target subsidy
• Role for agents and brokers
• Relationship to rest of small group market

11
Working Families and Small Business Coverage Act

• Small business coverage initiative
• Builds on current delivery and sales system
• Simple design, easy access
• Capped enrollment
• 30 million annual subsidy program for very small
  businesses
• 2-9 employees, low-wage, not previously offering
• 50 subsidy
• Requires 125 plan
• Any small business product w/wellness rider

12
Working Families and Small Business Coverage Act

• Expands Medicaid coverage for parents up to 116
  FPL - July 2008
• Expand Medicaid coverage to childless adults to
  116 FPL phase in coverage beginning July 2009
• Authority to cap enrollment limit benefits
• Expansion contingent upon availability of funds

13
Working Families and Small Business Coverage Act
- Financing

• Already spending over 800 million on uninsured
  in hospitals
• Minimize impact on general fund through
  redistributed savings in uncompensated care
• All Payor Waiver provides mechanism to
  recapture savings to finance part of expansion
• Hospitals continue to be paid full amount
  funding shifts from uncompensated care to
  coverage
• Savings for all payers (employers and
  individuals)
• Maximize use of existing funding sources and
  potential surpluses (MHIP)

14
Health Care Quality Council

• Problem
• High cost, low quality
• In Maryland, public and private health care
  quality improvement initiatives are disparate and
  uncoordinated
• Goal
• Leverage Marylands leadership in health care
  delivery to improve quality and affordability of
  health care for all Marylanders
• Solution Health Care Quality Council
• Inventory public and private quality initiatives,
  prioritize and focus initiatives
• Develop statewide plan for better management and
  prevention of chronic disease
• Coordinate with other efforts to assure Health IT
  used effectively

15
Getting it Done

• Leadership, opportunity and readiness
• Realism
• Stamina
• Leaders not too locked into ideas or ownership
• Buy-in from all key decision makers