Virginia State Planning Grant Funded by the Health Resources and Services Administration

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Virginia State Planning GrantFunded by the
Health Resources and Services Administration

• Overview of Model Option Recommendations
  Comments Invited
• June, 2005

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Virginia State Planning Grant

• The goal of Virginias State Planning Grant
  calls for the development of a business plan for
  extending health insurance coverage to a specific
  population of working uninsured

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Model Develop Workgroup Charge

• 1) Identify the target population of working
  uninsured individuals and families to be served
  by an insurance coverage expansion
• 2) Understand the various state options and their
  feasibility for insurance coverage expansion, and
• 3) Identify and recommend an insurance model
  designed to have the most significant impact on
  coverage expansion.

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Virginia State Planning GrantMDWG Decision
Timeframe

• 2004- Virginia Household Survey conducted by
  SHADAC
• March 2005- Principles for model option selection
  established
• March 2005 -Target population of uninsured
  determined
• June 2005- Insurance model option identified and
  prototype product design begun
• July 2005-Period of comment on recommended model
  option

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Principles Guiding Model Development

• For Target population
• Improve rates of continuous coverage
• Not duplicate existing coverage options or
• adversely impact the coverage of other
  populations
• Reduce health care costs
• Improve health status (provide access to care
  through insurance coverage)

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Principles Guiding Model Option Selection

• Costs of coverage shared by employees and
  employers as well as state government
• Budget-neutral to Commonwealth of Virginia
• Reduce employer costs associated with lack of
  health care coverage
• Be easily understood
• Economically attractive and politically feasible

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Choosing the Target Population

• Target population was identified based on
  Virginia Household Survey results (2004) and
  national trends
• Targeted population includes uninsured working
  Virginia adults, ages 19-64

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Point in Time Rates of Uninsurance (Fall
2004)Virginia Regions
Source 2004 Virginia Health Care Insurance and
Access Survey
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Virginia Household Survey FindingsSmall
employers have much lower offer rates
Health Insurance Offer Rates by Employer Size
Virginia 2004
Source 2004 Virginia Health Care Insurance and
Access Survey
Source 2004 Virginia Health Care Insurance and
Access Survey
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Virginia Household Survey FindingsLow income
individuals more likely to be uninsured
Health Insurance Offer Rates by Employee Income
(as of FPL), 2004
Source 2004 Virginia Health Care Insurance and
Access Survey
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Age of Uninsured- Virginia 2004
Virginia Household Survey FindingsYoung adults
most likely to be uninsured
Source 2004 Virginia Health Care Insurance and
Access Survey
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Model Options Explored But Not Selected

• Subsidizing or Reducing the Cost of Private
  Coverage
• Create state-funded premium assistance / private
  insurance buy-in programs
• Make state-funded reinsurance available (Reduce
  price of private insurance for low-income
  uninsured and small employers by having state
  cover portion of health insurers high-cost or
  catastrophic claims)

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Model Options Explored, contd.

• Compelling Employers to Provide Coverage for
  Certain Groups
• Enact employer mandate to offer health insurance
  to some/all employees
• Other Require college students to be insured
  Require provision of health insurance as
  condition of state contracts
• Expanding Public Coverage

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Model Options Explored, contd.

• Eliminating Barriers to Getting Insurance
• Enact individual health insurance market reforms
• Establish/broaden state continuation-of-coverage
  (COBRA-like) laws
• Allow other groups to join state employee health
  benefit plans
• Expand definition of dependent in health
  insurance policies (e.g., raise eligible age)

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Drivers influencing model option
selected/recommended

• Affordability
• Low income individuals have low price threshold
  tolerances (as low as 1-3 of take home pay)
• Designed with 100 monthly premium in mind, with
  premium cost to be shared by employer and
  employee

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Drivers influencing model selected/recommended

• Benefits
• First-dollar coverage on the front end
• for preventative and primary care
• Greater cost-sharing on other benefits
• Annual maximum out-of-pocket
• payment
• Catastrophic protection with caps

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Drivers influencing model selected/recommended

• Incentives for employers and insurance brokers
• Tax Credits for employers
• Commission benefits for volume
• sales of product by insurance brokers

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Recommended Model Options

• New insurance product to be issued in Virginias
  small group health insurance market
• Small employers (2-50 employees) who have not
  offered insurance within the last 12 months would
  be eligible
• Tax credit or rebate to employers to cover 80 of
  employer contribution to the premium
• Extensive marketing, education and outreach

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Exemplar New Product
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Why was this model option recommended?

• Its a start
• No additional public dollars were available to
  support various insurance coverage options such
  as Reinsurance or public program expansions
• Recommended option is consistent with affordable
  insurance trends in other states
• Involves a public private partnership
• Designed to address needs of an under-served
  market (small businesses who employ individuals
  with incomes between 100-300 federal poverty
  limit)

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Next steps

• Run actuarial projections on the prototype
  product
• Obtain public comment
• Begin business plan development- to be submitted
  to Governor through Virginia Secretary of Health
  Human Services

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Feedback Needed from Community Work Group

• What do you see are the greatest problems
  associated with the lack of availability of
  health insurance for working individuals in your
  community?
• What do you see are the greatest challenges in
  providing health insurance to working uninsured
  individuals within your community?
• What factors account for why people do not
  possess health insurance? (Why people lack health
  insurance)
• How are people who lack health insurance getting
  their health needs met? (How medical needs are
  being met)
• What are the perceptions, experiences, and
  expectations of people working with or utilizing
  public health insurance programs such as FAMIS
  and Medicaid? (Perceptions of public health
  insurance)

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Feedback Needed from Community Work Group

• What factors account for why some businesses
  provide health insurance to their employees while
  others do not?
• What types of mechanisms or incentives would help
  small businesses in their ability to offer health
  insurance to employees?
• By what means could health insurance be made
  available to all Virginia residents?

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Visit the State Planning Grant Website
www.insuremorevirginians.org