State Health Reform: Lessons for the Nation

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State Health ReformLessons for the Nation

• Jennifer Tolbert
• Principal Policy Analyst
• Kaiser Commission on Medicaid and the Uninsured
• Kaiser Family Foundation
• for
• Healthcare Leaders Forum
• Detroit Regional Chamber and Federal Reserve Bank
  of Chicago
• Detroit, MI
• March 31, 2009

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Health Insurance Coverage of the
Total Population, 2007
Children 8.9
Employer-Sponsored 53
Military/VA 1
Uninsured 15
Adults 36.1
Medicaid/SCHIP 13
Private Non-Group 5
Medicare 14
298.2 million
45.0 million uninsured
SOURCE KCMU and Urban Institute analysis of
March 2008 CPS.
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Uninsured Rates Among the Nonelderly, by State,
2006-2007
NH
VT
ME
WA
ND
MT
MN
MA
OR
NY
ID
WI
SD
RI
MI
CT
WY
PA
NJ
IA
NE
OH
IN
NE
IL
NV
DE
WV
UT
VA
MD
CO
KY
CA
MO
KS
NC
DC
TN
SC
OK
AR
AZ
NM
GA
MS
AL
TX
LA
AK
FL
HI
18 (18 states)
13-17 (19 states )
US Average 18
lt 13 (13 states DC)
SOURCE Urban Institute and KCMU analysis of the
March 2007 and 2008 Current Population Survey.
Two-year pooled estimates for states and the US
(2006-2007).
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Availability of Employer-Based Coverage
Percentage of Firms Offering Health Benefits, 2007
Family Work Status of Uninsured, 2007
Part-Time Workers 12
No Workers 19
1 or More Full-Time Workers 69
Higher Wage Firms
Large Firms (200 Workers)
Lower Wage Firms
Small Firms (3-199 workers)
Total 45 million uninsured
Estimates are statistically different from each
other within category (plt.05) SOURCE KCMU/Urban
Institute analysis of March 2008 CPS Kaiser/HRET
Survey of Employer-Sponsored Health Benefits,
2007
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Affordability of Health Coverage
Family Income of Uninsured, 2007
Average Annual Premium Costs, 2008
12,680
4,704
Total 45 million uninsured
The federal poverty level was 22,050 for a
family of four in 2009. SOURCE KCMU/Urban
Institute analysis of March 2008 CPS.
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Cumulative Changes in Health Insurance Premiums,
Inflation, and Workers Earnings, 1999-2008
Source Kaiser/HRET Survey of Employer-Sponsored
Health Benefits, 2000-2008. Bureau of Labor
Statistics, Consumer Price Index, U.S. City
Average of Annual Inflation (April to April),
2000-2008 Bureau of Labor Statistics, Seasonally
Adjusted Data from the Current Employment
Statistics Survey, 2000-2008 (April to April).
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Role of Public Programs
Median Medicaid/CHIP Income Eligibility
Thresholds, 2008
Nonelderly Uninsured, 2007
Federal Poverty Line (For a family of four is
22,050 per year in 2009)
Parents 17
Adults without Children 35
Adults without Children21
lt200 FPL
200 FPL
Total 45.0 million uninsured
National median Medicaid income eligibility
level for working parents in 2008. SOURCE
KCMU/Urban Institute analysis of March 2008 CPS.
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Medicaid Enrollees are Poorer and Sicker Than the
Low-Income Privately-Insured
Percent of Enrolled Adults
Poor
Health Conditions that Limit Work
Fair or Poor Health
SOURCE Coughlin et al, Assessing Access to Care
Under Medicaid Evidence for the Nation and
Thirteen States, Health Affairs, July/August
2005.
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Cutting Back Care Due to Cost
Percent of nonelderly adults who say because of
cost they or a family member has
Put off or postponed getting health care you
needed
Skipped a recommended medical test or treatment
Not filled a prescription
Cut pills or skipped doses of medicine
Had problems getting mental health care
SOURCE Kaiser Health Tracking Poll Election
2008, October 2008 (conducted October 8 13,
2008)
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States Tackle Health Reform

• Initially, states focused on improving coverage
  through public program expansions and private
  market reforms
• As economy deteriorated, efforts broadened to
  address system reform
• care coordination
• system efficiency
• quality improvement
• Most states remain committed to implementing
  coverage expansions

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Public Program Expansions

• Expanding coverage for children
• 11 states pursuing universal coverage for
  children
• Raising Medicaid eligibility levels for parents
  (examples Maryland, New Jersey)
• Using/expanding Medicaid waivers to cover
  childless adults (examples Wisconsin, Minnesota)
• Using Medicaid funding to purchase private
  insurance (examples Indiana, Vermont)

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Employer Incentives and Requirements

• Partnering with small employers
• three-share models to assist employers in
  offering coverage
• tax incentives for small employers
• state examples Maine, Montana, Oklahoma,
  Tennessee
• Employer Section 125 requirements
• Allows employees to pay premiums on a pre-tax
  basis
• Pay or Play requirements
• Require employers to provide coverage to
  employees or contribute toward the costs of
  coverage
• Massachusetts, Vermont, San Francisco

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Pay or Play in San Francisco Upheld

• San Francisco requires employers to make defined
  contribution toward health care for employees
• 9th Circuit Court of Appeals upholds requirement,
  saying no ERISA violation
• Implications for other states
• cannot require employers to provide health
  coverage
• must create universal coverage programs funded
  partly with employer assessments
• cannot specify what employer coverage must look
  like to qualify for credit against the assessment

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New Options for the Uninsured

• Premium subsidies for state-administered plans
• Plans offered through contracts with private
  insurers
• state examples Connecticut, Massachusetts,
  Vermont
• Benefit plan redesign
• Wellness plans emphasize preventive care, with
  financial incentives for participation in
  wellness programs
• state examples Maryland, Rhode Island
• Low-cost plans preventive benefit packages
  (usually include service limits and some do not
  cover hospitalizations)
• state example Florida

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Improving Access to Care

• Medical homes
• link patients with provider teams responsible for
  coordinating full range of care
• enhanced payment for care coordination
• Improving reimbursement for primary care
• Strategies to address primary care workforce
  shortages
• Scope of practice for non-physician providers
• Loan forgiveness programs

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Improving System Efficiency and Quality

• Cost and quality transparency
• require provider reporting of cost and quality
  data
• comparison tools for consumers
• Inpatient quality initiatives
• non-payment for never events
• reporting of hospital-acquired infections
• Promoting HIT adoption
• statewide HIT infrastructure and standards for
  EHRs
• e-prescribing
• Provider payment reform???

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Comprehensive ReformThe Massachusetts Model

• Individual Mandate
• Mandate enforced through tax filings
• Employer Assessment
• Employers with gt10 employees that dont offer
  coverage must pay 295 per employee per year
• Subsidized Coverage
• Sliding scale subsidies for individuals lt300 FPL
• Full subsidies for those lt150 FPL
• The Connector
• Links consumers small employers to insurance
• Establishes affordability standards and certifies
  insurance products
• Medicaid Expansion to Children lt300 FPL

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Massachusetts Health Reform Successful in
Improving Health Coverage
Commonwealth Care 40
Total 442,000 Newly Insured
SOURCE Massachusetts Division of Health Care
Finance and Policy, Health Care in Massachusetts
Key Indicators, November 2008.
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Minnesota Focus on System Improvement

• Comprehensive reform passed May 2008
• Expands MinnesotaCare to 250 PFL for childless
  adults
• Requires employers to establish Sec. 125 plans
• Provides tax credit for uninsured with access to
  Sec. 125 plans
• Requires care coordination for people with
  chronic conditions
• Will establish standards for medical homes and
  pay care coordination fee
• Creates tools for comparing providers on cost and
  quality measures available to providers and
  public
• Establishes baskets of care to promote
  transparency and payment reform
• Requires e-prescribing by 2011

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Looking Forward

• Economic picture remains bleak
• 8.1 unemployment in Feb. 2009 (up from 4.9 in
  Dec. 2007)
• 46 states facing budget shortfalls of 350
  billion for the rest of 2009 through 2011
• Growing uninsured and increasing Medicaid and
  CHIP enrollment
• Federal legislation will help states
• CHIP reauthorization bonuses to enroll currently
  eligible children in Medicaid plus federal
  funding for expansions
• American Recovery and Reinvestment Act increased
  federal Medicaid matching funds for states
• Despite challenges, state continue to innovate
  and lead the way on health reform
• many health reform strategies being discussed at
  national level are currently being tested in the
  states

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For more information

• www.kff.org
• www.kaisernetwork.org
• www.kaiserEDU.org
• Coming soon
• Health reform webpage on kff.org