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Healthcare Group of Arizona

Healthcare Group of Arizona. Arizona’s Health Care and Policy Laboratory for Small Business Coverage Options. The Evolution of AHCCCS Health Care Coverage.

wesley-acosta
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Healthcare Group of Arizona

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  1. Healthcare Group of Arizona Arizona’s Health Care and Policy Laboratory for Small Business Coverage Options

  2. The Evolution of AHCCCS Health Care Coverage • Arizona Revised Statute gives AHCCCS broad authority to provide health care coverage to federally funded beneficiaries, small businesses, and public employees for acute and long term care. • Started in October 1982, 3 year demonstration waiver approved by CMS for AHCCCS Acute program . • In 1987, the Waiver request includes a proposal to include long Term Care and the Arizona Long Term Care System (ALTCS) is approved. • In 1988, small employers in 4 counties are allowed to purchase medical coverage for their employees from AHCCCS Health Plans through Healthcare Group.

  3. The Evolution of AHCCCS Health Care Coverage • In 1990there is Phase-in of behavioral health services for certain Title XIX members. • In 1993 Healthcare Group services for small employers is expanded statewide. • In 1997, AHCCCS submits an amendment to cover single adults and children up to 100% of the FPL. • 1998 there was a 3 year pilot to provide coverage based on a sliding scale monthly premium to uninsured people who do not qualify for Medicaid – Premium Sharing. • 1998 Arizona implemented it’s version of State Children’s Health Insurance Program (SCHIP) – KidsCare- Covers children under 150% of the FPL.

  4. Voter Approved Proposition 204 • In 2001 Arizona voter approved proposition 204 which funded the expansion of AHCCCS and created the opportunity for the state to replace state and local funding for the medically needy population with federal funds. • Prop 204 replaced a state-only program for the Medically Needy and Medically Indigent (MNMI), which cost $200 M per year from the General Fund and over $30 M in county funds.

  5. FY 2006/2007 Legislative Changes • HB-2698 Small Businesses Exemptions • Exempts small business health care coverage from specified insurance coverage requirements, including certain mandates for businesses that employ 2 to 25 persons and that have been uninsured for at least 6 months. • Exemptions for small businesses health insurance plans include: any surgical services, maternity benefits, coverage of medical foods to treat metabolic disorders, and drug or devices for contraception or outpatient contraception services. • HB- 2177 Tax Credit for Small Businesses and Employees • A tax credit for individual or a small business that is certified by Dept. of Revenue as meeting the requirements for tax credit.

  6. FY 2006/2007 Legislative Changes • SB 1442 Temporary Medical Coverage • Appropriates $6.5 million to AHCCCS to establish the Temporary Medical Coverage Program to provide health care coverage to persons who are citizens and residents and who have been enrolled in AHCCCS at any time within the last 24 months and became ineligible for coverage due to federal disability insurance benefit payment.

  7. While the rate of uninsured in Arizona has declined significantly since 1997, 17.0% of Arizona residents remained uninsured in 2004. Source: U.S. Census Bureau, Housing & Household Economic Statistics Division.

  8. The small business market is growing. Extremely price sensitive. Small business owners to do not see health benefits as a necessary part of competitive employee compensation. Significant employee turn over. What the small business owner wants in a health benefit their employees cannot afford. Small business employers prefer a defined contribution for any employer participation in health benefit coverage. Assumptions About the Small Business Market

  9. Policy Question: Can the Market Work? Will the small business market respond to differentiated benefits and health coverage products? • Designing benefit plans that the small business Market will buy • Product and Pricing Strategy • Product Differentiation • Product Evaluation

  10. Healthcare Group Business Model Budgetability Choice B C A Administrative Ease

  11. A = Administrative Ease Easy to enroll Easy to deal with B = Budget-ability A health plan that fits into every employees budget C = Choice Choice of health plan benefits Choice of provider networks Choice of providers Our success equation is …… A + B + C = Success The ABCs of Healthcare Coverage for Small Businesses

  12. Product Development Strategy Design benefit plans that: • Address varyinghealth needs • Address varyingincomes • Address varyingconsumer needs • Can bereasonably-priced • Aremeaningful,provideutilityandvalue • Can beself-sufficient

  13. HCG Healthstyles HCG Healthstyles Designed for varying health needs, income, and lifestyles. • Richest benefit package, intended for: • employees with existing disease or chronic condition • employees wanting the added security of a wide range of benefits CLASSIC Intended for employees with limited health needs beyond routine and preventive care. Little or no co-pays for most physician office visits, diagnostic services and prescriptions. Maternity excluded. SECURE ACTIVE A variation of the Secure plan, with lower premium and higher co-pays and coinsurance. Maternity excluded.

  14. Healthstyles™ Benefit Grid * 100% coverage for first 10 days, thereafter 50% coinsurance.

  15. Product Evolution HCG Enrollment Product Evaluation Begins Subsidy Starts New HCG Administration Healthstyles Benefit Plans Introduced • Broker fees ends • To single plan • Rate increase Loss of health plan

  16. Historic Enrollment Trends(1999-2006)

  17. HMO Enrollment by Benefit Plan and Deductible Total Membership as of July 11, 2006: 22,027 HMO 20,473 members Classic $0 deductible Classic $500 deductible Classic $1,000 deductible Classic $2,000 deductible Secure $0 deductible Secure $500 deductible Secure $1,000 deductible Active $0 deductible Active $500 deductible Members electing a deductible option: 28%

  18. PPO Enrollment by Benefit Plan Total Membership as of July 11, 2006: 22,027 PPO 1,554 members Medallion PPO Medallion PPO Plus Medallion Classic PPO Medallion Classic PPO Plus Medallion Platinum PPO Medallion Platinum Plus PPO Medallion Gold PPO Medallion Silver PPO Medallion Plus, Classic Plus and Platinum Plus meets federal requirements for pairing with an optional HSA.

  19. Product Evolution Original Healthstyles design based on: • Historical experience with previous HCG benefit plans • Meetings with small business employers • Experience of other states • Characteristics of the working uninsured • Demographic from Kaiser • CAN initiative (St. Luke’s)

  20. HCG Product Evolution December 2004 Results from Employers and Employee Satisfaction Survey (n=285)

  21. Product Evolution Validation of Focus Group/Survey findings: • Asked Brokers/Producers what they thought • Actuarial pricing analysis • Empirical research • Experience of other states

  22. HMO HMO HMO Healthstyles HMO Single Plan Active Secure Classic Product Evolution 1998-2003 June-July 2004 Employer Focus Groups April 2004 SB1166 • Solidify relationships with HCG employer groups • Evaluate employer satisfaction • Validate product design assumptions • Assess unmet need (benefits & services) • Validate future product ideas

  23. PPO PPO Rx Medallion PPO Deductible Option Deductible Option HMO Healthstyles HMO HMO HMO Option $2,000 Silver Single Plan Secure Active $1,000 Expanded Formulary Classic Gold Platinum, Platinum + Vision (Avesis) Dental (EDS) $500 January 2006 September 2005 October2004 Product Evolution 1998-2003 June-July 2004 Employer Focus Groups April 2004 SB1166 • DESIRED BENEFITS • Deductible options • Mental Health benefits • Vision benefits • Dental benefits • Expanded provider network • PPO plans • HSA/HDHP option • Wellness February 2006

  24. Product Differentiation as of May 2006 Products are differentiated by covered services, benefit plan features, provider networks, and availability

  25. Classic Secure Active Plat/+ Gold Silver Benefit Comparison

  26. Classic Secure Active Plat/+ Gold Silver Benefit Comparison * Health plan assumes first dollar liability for services excluded from deductible.

  27. Coconino Coconino Apache Apache Mohave Mohave Coconino Navajo Navajo Apache Mohave Yavapai Yavapai Navajo LaPaz LaPaz Yavapai Gila Gila Maricopa Maricopa Green-lee Green-lee LaPaz Gila Maricopa Pinal Pinal Yuma Yuma Green-lee Graham Graham Pinal Yuma Graham Pima Pima Cochise Cochise Pima Cochise Santa Cruz Santa Cruz Santa Cruz HMO Provider Networks Geographic differentiation: HMO benefit plans are not available statewide

  28. AFMC Medallion Series Benefit Plans Platinum Coconino Apache Mohave Navajo Platinum Plus (HSA) Yavapai Gold LaPaz Gila Maricopa Green-lee Silver Pinal Yuma Graham Pima Cochise Santa Cruz PPO Provider Network Geographic differentiation: PPO availability varies by county

  29. HMO Product DemographicsDecember 2004 to April 2006 Classic Secure Active *Represents stated income from subscribers on enrollment forms. Not all subscribers supply these data.

  30. Product Growth (2005-2006) Healthcare Group Growth by Product

  31. December 2004 12,438 members September 2005 16,451 members May 2006 20,798 members HCG Enrollment by Product December 2006* 25,000 members anticipated * Expected

  32. HCG Enrollment by Product and Provider Network Total Membership as of July 11, 2006: 22,027 HCG Products 22,027 members HCG Networks 22,027 members

  33. HMO Product MigrationDecember 2004 to April 2006* Deductible options were first introduced in October 2004. By April 2006, 25% of members had switched to a deductible option. *This period represents the migration behavior of 100% of membership following a complete contract renewal cycle.

  34. Product Evaluation Evaluation Tools: • Financials • Actuarial Analysis (COG) • Analytic Dashboard (Rates and Measures) • Enrollment Reports • Ad-hoc Analysis • Risk Profiling (Medical Intelligence) • Satisfaction Surveys • Focus Groups

  35. Actuarial Tool Box Milliman Health Cost Guidelines (Industry standard) Pricing Models Reserving Models Ad-Hoc Studies National Studies (CMS, Kaiser Family Foundation, etc.) Financial and Actuarial Education External Actuarial Services Rate Analysis Tools

  36. Small groups are subject to significant fluctuations in premium rates Community Rated Premiums Medical cost risk is spread across a larger group Member “Out of Pocket” Costs Co-pay and co-insurance is used to pass on financial responsibility and mitigate premium rate increases Pricing Strategies

  37. HCG Member Satisfaction Member satisfaction with choice of …

  38. HCG Member Satisfaction Member satisfaction with choice of …

  39. HCG Member Satisfaction Overall member satisfaction with …

  40. Our first care is your healthcare

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