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Virginia State Planning Grant Funded by the Health Resources and Services Administration. Overview of Model Option Recommendations: Comments Invited June, 2005. Virginia State Planning Grant.

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Virginia state planning grant funded by the health resources and services administration
Virginia State Planning GrantFunded by the Health Resources and Services Administration

Overview of Model Option Recommendations: Comments Invited

June, 2005


Virginia state planning grant
Virginia State Planning Grant

The goal of Virginia’s State Planning Grant calls for the development of a business plan for extending health insurance coverage to a specific population of working uninsured


Model develop workgroup charge
Model Develop Workgroup Charge

  • 1) Identify the target population of working uninsured individuals and families to be served by an insurance coverage expansion

  • 2) Understand the various state options and their feasibility for insurance coverage expansion, and

  • 3) Identify and recommend an insurance model designed to have the most significant impact on coverage expansion.


Virginia state planning grant mdwg decision timeframe
Virginia State Planning GrantMDWG Decision Timeframe

  • 2004- Virginia Household Survey conducted by SHADAC

  • March 2005- Principles for model option selection established

  • March 2005 -Target population of uninsured determined

  • June 2005- Insurance model option identified and prototype product design begun

  • July 2005-Period of comment on recommended model option


Principles guiding model development
Principles Guiding Model Development

For Target population:

  • Improve rates of continuous coverage

  • Not duplicate existing coverage options or

    adversely impact the coverage of other populations

  • Reduce health care costs

  • Improve health status (provide access to care through insurance coverage)


Principles guiding model option selection
Principles Guiding Model Option Selection

  • Costs of coverage shared by employees and employers as well as state government

  • Budget-neutral to Commonwealth of Virginia

  • Reduce employer costs associated with lack of health care coverage

  • Be easily understood

  • Economically attractive and politically feasible


Choosing the target population
Choosing the Target Population

Target population was identified based on Virginia Household Survey results (2004) and national trends

Targeted population includes uninsured working Virginia adults, ages 19-64


Point in time rates of uninsurance fall 2004 virginia regions
Point in Time Rates of Uninsurance (Fall 2004)Virginia Regions

Source: 2004 Virginia Health Care Insurance and Access Survey


Virginia household survey findings small employers have much lower offer rates

90

79.3

80

69.1

64.2

70

60

50

40

32.1

30

20

10

0

<11 employees

11-50

>50 employees

Overall offer

employees

rate

Virginia Household Survey FindingsSmall employers have much lower offer rates

Health Insurance Offer Rates by Employer Size Virginia 2004

Source: 2004 Virginia Health Care Insurance and Access Survey

Source: 2004 Virginia Health Care Insurance and Access Survey


Virginia Household Survey FindingsLow income individuals more likely to be uninsured

Health Insurance Offer Rates by Employee Income (as % of FPL), 2004

Source: 2004 Virginia Health Care Insurance and Access Survey


Age of uninsured virginia 2004
Age of Uninsured- Virginia 2004

Virginia Household Survey FindingsYoung adults most likely to be uninsured

Source: 2004 Virginia Health Care Insurance and Access Survey


Model options explored but not selected
Model Options Explored But Not Selected

Subsidizing or Reducing the Cost of Private Coverage:

  • Create state-funded premium assistance / private insurance buy-in programs

  • Make state-funded reinsurance available (Reduce price of private insurance for low-income uninsured and small employers by having state cover portion of health insurers’ high-cost or catastrophic claims)


Model options explored cont d
Model Options Explored, cont’d.

Compelling Employers to Provide Coverage for Certain Groups:

  • Enact employer mandate to offer health insurance to some/all employees

  • Other: Require college students to be insured; Require provision of health insurance as condition of state contracts

    Expanding Public Coverage


Model options explored cont d1
Model Options Explored, cont’d.

Eliminating Barriers to Getting Insurance:

  • Enact individual health insurance market reforms

  • Establish/broaden state continuation-of-coverage (COBRA-like) laws

  • Allow other groups to join state employee health benefit plans

  • Expand definition of ‘dependent’ in health insurance policies (e.g., raise eligible age)


Drivers influencing model option selected recommended
Drivers influencing model option selected/recommended

Affordability

  • 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


Drivers influencing model selected recommended
Drivers influencing model selected/recommended

Benefits

  • First-dollar coverage on the front end

    for preventative and primary care

  • Greater cost-sharing on other benefits

  • Annual maximum out-of-pocket

    payment

  • Catastrophic protection with caps


Drivers influencing model selected recommended1
Drivers influencing model selected/recommended

Incentives for employers and insurance brokers

  • Tax Credits for employers

  • Commission benefits for volume

    sales of product by insurance brokers


Recommended model options
Recommended Model Options

  • New insurance product to be issued in Virginia’s small group health insurance market

  • Small employers (2-50 employees) who have not offered insurance within the last 12 months would be eligible

  • Tax credit or rebate to employers to cover 80% of employer contribution to the premium

  • Extensive marketing, education and outreach



Why was this model option recommended
Why was this model option recommended?

  • It’s a start

  • No additional public dollars were available to support various insurance coverage options such as “Reinsurance” or public program expansions

  • Recommended option is consistent with ‘affordable insurance’ trends in other states

  • Involves a public private partnership

  • Designed to address needs of an under-served market (small businesses who employ individuals with incomes between 100-300% federal poverty limit)


Next steps
Next steps

  • Run actuarial projections on the prototype product

  • Obtain public comment

  • Begin business plan development- to be submitted to Governor through Virginia Secretary of Health & Human Services


Feedback needed from community work group
Feedback Needed from Community Work Group

  • What do you see are the greatest problems associated with the lack of availability of health insurance for working individuals in your community?

  • What do you see are the greatest challenges in providing health insurance to working uninsured individuals within your community?

  • What factors account for why people do not possess health insurance? (Why people lack health insurance)

  • How are people who lack health insurance getting their health needs met? (How medical needs are being met)

  • What are the perceptions, experiences, and expectations of people working with or utilizing public health insurance programs such as FAMIS and Medicaid? (Perceptions of public health insurance)


Feedback needed from community work group1
Feedback Needed from Community Work Group

  • What factors account for why some businesses provide health insurance to their employees while others do not?

  • What types of mechanisms or incentives would help small businesses in their ability to offer health insurance to employees?

  • By what means could health insurance be made available to all Virginia residents?


Visit the state planning grant website
Visit the State Planning Grant Website:

www.insuremorevirginians.org


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