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

1
Virginia State Planning GrantFunded by the
Health Resources and Services Administration

• Update on Model Option Recommendations
• September 19, 2005

2
Since We Last Met

• Received MEPS-IC survey data
• SPG Worked with SBAB to develop and field a
  Virginia-wide survey of small businesses in
  Virginia and incorporated feedback into model
  option recommendation (to SPG Leadership Team
  8/24/05)
• Continuing to work with actuarial consultant
• on final projections for model prototype take
  up, and premium rate stability (expected end of
  Sept)

3
SBAB Initiated Survey of Small Businesses in
Virginia

• 7 item multiple response option survey
• Conducted via Email through Survey Monkey
  (mid-July to present)
• SPG website updates results periodically

4
Best way to inform sm. businesses about Insurance
Products
5
If cost of non-HMO Insur. affordable
(lt150/individ/mo), would you offer it to your
employees?
6
Concerned about administrative requirements for
offering insur?
7
Given prototype benefits, at 150 or less per
employee/mo, would you purchase or subsidize?
8
Importance of selected factors for purchasing
decisions?1-6 scale 1 Highest
9
Max amount my company will pay toward health
insurance per individual/mo
10
Offering health insurance is valuable to my
employees and is something I would like to do
11
We have even more planning dataits not good news

• Eroding Employer Sponsored Coverage
• Small Employers have lowest offer rates and are
  hardest hit with rising costs of insurance
• Low wage workers more likely to be uninsured

12
Current Conditions In Virginia

• 2003 annual per capita personal income was
  33,730
• The median employee wage in Virginia was 28,586,
  with individuals working in smaller firms
  receiving lower wages on average
• Among very small firms (fewer than 10 employees)
  the median wage was just 19,125

Source Agency for Healthcare Research and
Quality, Center for Financing Access and Costs
Trends 2003 Medical Expenditure Panel Survey-
Insurance Component
13
Median Average Wage by Region, 2003
Source Agency for Healthcare Research and
Quality, Center for Financing Access and Costs
Trends 2003 Medical Expenditure Panel Survey-
Insurance Component
14
Current Conditions In Virginia

• Only 29 percent of enrollees with single coverage
  and 24 percent of enrollees in family health
  coverage plans were employees with average annual
  incomes of lt/ 29,855 working in small
  businesses.
• Take-up rate for health insurance in 2003 for
  those who made less than the median wage of
  28,586 was 26 percent, compared to 67 percent
  for those that made more than 28,586.

Source Agency for Healthcare Research and
Quality, Center for Financing Access and Costs
Trends 2003 Medical Expenditure Panel Survey-
Insurance Component
15
Small Businesses and Health Insurance

• Currently in Virginia, over half (51.7) of all
  workers aged 19-34 years and eighty percent of
  all workers 35 to 64 years employed in Virginia
  businesses with 50 or fewer employees are
  uninsured.
• Just under a third of very small employers (those
  with less than 11 employees) in Virginia offer
  health insurance to their workers.
• Individuals working in companies with less than
  50 employees are twice as likely to be uninsured
  as individuals working in companies with more
  than 50 employees.

Source AHRQ, MEPS-IC Virginia, 2003
16
Current Conditions In Virginia

• Health insurance premiums in Virginia have
  increased at a rate 2.4 times the average rise in
  earnings
• Rates of coverage for individuals with incomes
  20-25,000 dropped from 81 in 2001 to 74 in
  2003.

17
SBAB Survey Reinforces Key Feasibility Elements
of Model Option Recommended

• Affordability is key!!!!
• 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
• Employer Interest high

18
Next Steps

• Complete actuarial projections on the prototype
  product
• Finalize recommendation (Report to Governor
  through Virginia Secretary of Health Human
  Services)
• State Planning Grant II begins

19
For Updates and More InformationVisit the State
Planning Grant Website
www.insuremorevirginians.org