Delaware Health Care Commission

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Delaware Health Care Commission February 17,
2005 Alice Burton, Director AcademyHealth
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FY 2006 Budget Highlights

• Pledge to reduce deficit in half by 2009
• Record deficit of 427 billion
• Non-security, discretionary spending will rise 1
• However, HHS will decrease discretionary funding
  by 1.2
• 17 increase in Medicare - Revised cost estimates
  for Medicare Modernization Act

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President Bushs Health Agenda

• Economic opportunity and ownership
• Health Information Technology
• Comprehensive, consumer driven health care HSAs,
  tax credits, Association Health Plans and medical
  liability reform
• Compassionate Society
• Providing access through Health Centers
• Medicaid and SCHIP
• Protecting America
• Making government more effective

Source Overview of Presidents 2006 Budget, OMB
2/7/05
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President Bush Coverage Agenda

• Health Insurance Tax Credit
• Health Savings Accounts
• Tax credit
• Above the line deduction
• Rebate to small employers
• State Purchasing Pools
• Association Health Plans (AHPs)
• SCHIP outreach
• Community Health Centers

Source Overview of Presidents 2006 Budget, OMB
2/7/05
5
Medicaid Proposals

• Secretary Leavitt identified 60 billion in cuts
  over ten years
• Eliminating Inter-governmental transfers
  (IGTs) 40 billion
• Fraud and Abuse 5 million
• Amend Medicaid Drug Rebate Formula 15 million
• Medicaid and SCHIP modernization

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Delaware Health Commission Project Guiding
Principles

1. Highest ratio of dollars to insured
2. Target policy at low income populations
3. Administratively feasible
4. Avoid entanglement with federal law
5. Build on older programs and successful structures

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Policy Options 2004 Strategic Plan

1. Limited Benefit Plan
2. One-Third Share Plan
3. Delaware Healthy Children Expansion
4. Purchasing Pool

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Limited Benefits Plan

• Low Cost Insurance product or direct
  reimbursement emphasizing primary and
  preventative care
• Program can be targeted at low income
• Affordable for low income individuals via minimal
  cost sharing

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One-Third Share Plan

• Employer, employee, and the state each pay
  one-third of total premium
• Streamlined benefit package
• Affordable coverage for the working uninsured
  employed by small businesses

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Delaware Healthy Children Expansion

• Expand Delaware CHIP program to cover parents of
  Medicaid and CHIP eligible children between 100
  FPL and 200 FPL
• 1115 HIFA Waiver allows state additional freedom
  for benefit , cost-sharing, and enrollment caps

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Purchasing Pool

• Pool negotiates with private carriers and
  determines which plan to offer
• Employers pay minimum premium percentage and
  enroll a minimum percentage of employees
• State absorbs adverse selection with subsidy