Maine Small Business Health Coverage Plan

1
Maine Small Business Health Coverage Plan

• A Partnership that works for the people who work
  for Maine

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Maines Small Group Insurance Market is in Crisis
It just seems like the system is faulty. It
obviously cant work. It has to crash, if not
this year, next year. -Jeff Grammelin, Owner
of Freshwater Stone Brickwork in Orland, as
quoted in the Ellsworth American, Jan. 31, 2002

• Health insurance premiums have risen to
  unaffordable levels for many small businesses and
  self-employed people.
• In 1999, the percentage of small businesses
  offering health care coverage dropped from 77 to
  68.

3
Maines Small Group Insurance Market is in Crisis

• 87 of Maine employers feel that offering
  health insurance is the right thing to do, either
  as a matter of principle or philosophy.
• -from At Risk Small Business Health Insurance
  in Maine

4
Maines Small Group Insurance Market is in Crisis

• 43 of small Maine businesses say they will drop
  coverage if premiums increase 11-20 and another
  21 of companies plan to drop coverage even if
  premiums stay the same or increase less than 10.

• Small businesses make up more than 90 of Maines
  business and employ almost 50 of Maines
  workforce.

• Maines small businesses have seen increases of
  58 between 1996 and 2001, with a 49 increase in
  just the past two years.

5
Part of the Solution
Other States

• Maines Small Business Health Coverage Plan
  provides part of the solution to Maines health
  care crisis by creating a public-private
  partnership modeled on premium assistance
  programs successful in other states.

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What is Maines Small Business Health Care Plan?

• Where did the idea come from?
• What are the most important ideas?
• How does it work?

7
Where did the idea come from?

• Discussions with insurance carriers.
• Discussions with providers.
• Discussions with consumer advocates.
• Discussions with state and national health care
  experts about what works to make health care
  affordable.

8
What are the most important ideas?

• Publicly appointed administrative board to create
  and oversee the plan.
• Fixed fee schedule for provider reimbursement.
• Cap on allowable profit for the plan.
• Use of currently unused federal funds.

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How does it work?

• The Board
• Actuarial/Marketing study
• Request for Proposal

How does it work?
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Who is the Board?

• A health economist
• A representative of Maine health care providers
• A representative of the self-employed
• A representative of organized labor
• A representative of small businesses in Maine

• A health policy expert
• A representative of health care consumers in
  Maine
• A representative of low-income Maine people and,
• The Commissioner of DHS will serve as an ex
  officio member.

How does it work?
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Actuarial/Marketing Study
Many of the important questions about this plan
cant be fully answered until we know more about
the potential market
LD 1784 requires the Department of Human Services
to contract for an actuarial/marketing study to
determine exactly how many Maine people would
benefit and how much they would save.
How does it work?
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The Board

• The Board will be responsible for negotiating a
  fixed fee schedule for providers that will be
  regularly reviewed to ensure that it controls
  costs, provides access and fairly addresses the
  costs of providing health care in Maine.
• The Board will also be responsible for requesting
  proposals from Maines insurance carriers and the
  Department of Human Services for an health
  coverage plan to provide affordable health care
  to Maine small businesses and workers who choose
  to take advantage of it.

How does it work?
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Request for Proposal

• Once the board determines a fee-schedule it will
  request proposals from Maines insurance
  carriers.
• DHS is required to submit a bid as well.
• Bids will be accepted for part or all of the
  plan, multiple carriers could participate.

How does it work?
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Why Does it Work?

• Every player contributes something

• Carriers
• Offer Cap on profits
• Gain Standardized fee-schedule

• Providers
• Offer Set fee-schedule
• Gain Regular review of reimbursements

• Business Owners and Workers
• Offer Mandatory Contributions (If they choose to
  participate, which is voluntary)
• Gain Access to Quality Affordable Health Care