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State Health Reform: Lessons 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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State health reform lessons for the nation

State Health Reform:Lessons for the Nation

Jennifer Tolbert

Principal Policy Analyst

Kaiser Commission on Medicaid and the Uninsured

Kaiser Family Foundation


Healthcare Leaders Forum

Detroit Regional Chamber and Federal Reserve Bank of Chicago

Detroit, MI

March 31, 2009

Health insurance coverage of the total population 2007
Health Insurance Coverage of the Total Population, 2007



Employer-Sponsored 53%

Military/VA 1%

Uninsured 15%



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.

State health reform lessons for the nation

Uninsured Rates Among the Nonelderly, Population, 2007

by State, 2006-2007





















































≥ 18% (18 states)

13-17% (19 states )

US Average = 18%

< 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).

Availability of employer based coverage
Availability of Employer-Based Coverage Population, 2007

Percentage of Firms Offering Health Benefits, 2007

Family Work Status of Uninsured, 2007







1 or More Full-Time Workers


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 (p<.05)

SOURCE: KCMU/Urban Institute analysis of March 2008 CPS; Kaiser/HRET Survey

of Employer-Sponsored Health Benefits, 2007

Affordability of health coverage
Affordability of Health Coverage Population, 2007

Family Income of

Uninsured, 2007

Average Annual Premium Costs, 2008



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.

Cumulative changes in health insurance premiums inflation and workers earnings 1999 2008
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).

Role of public programs
Role of Public Programs and Workers’ Earnings, 1999-2008

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%

<200% 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.

Medicaid enrollees are poorer and sicker than the low income privately insured

Low-Income and and Workers’ Earnings, 1999-2008

Privately Insured


Medicaid Enrollees are Poorer and Sicker Than the Low-Income Privately-Insured

Percent of Enrolled Adults:


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.

Cutting back care due to cost
Cutting Back Care Due to Cost and Workers’ Earnings, 1999-2008

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)

States tackle health reform
States Tackle Health Reform and Workers’ Earnings, 1999-2008

  • 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

Public program expansions
Public Program Expansions and Workers’ Earnings, 1999-2008

  • 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)

Employer incentives and requirements
Employer Incentives and Requirements and Workers’ Earnings, 1999-2008

  • 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

Pay or play in san francisco upheld
Pay or Play in San Francisco Upheld and Workers’ Earnings, 1999-2008

  • 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

New options for the uninsured
New Options for the Uninsured and Workers’ Earnings, 1999-2008

  • 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

Improving access to care
Improving Access to Care and Workers’ Earnings, 1999-2008

  • 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

Improving system efficiency and quality
Improving System Efficiency and Quality and Workers’ Earnings, 1999-2008

  • 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???

Comprehensive reform the massachusetts model
Comprehensive Reform—The Massachusetts Model and Workers’ Earnings, 1999-2008

  • Individual Mandate

    • Mandate enforced through tax filings

  • Employer Assessment

    • Employers with >10 employees that don’t offer coverage must pay $295 per employee per year

  • Subsidized Coverage

    • Sliding scale subsidies for individuals <300% FPL

    • Full subsidies for those <150% FPL

  • The Connector

    • Links consumers & small employers to insurance

    • Establishes affordability standards and certifies insurance products

  • Medicaid Expansion to Children <300% FPL

Massachusetts health reform successful in improving health coverage
Massachusetts Health Reform Successful in Improving Health Coverage

Commonwealth Care


Total = 442,000 Newly Insured

SOURCE: Massachusetts Division of Health Care Finance and Policy, Health Care in Massachusetts: Key Indicators, November 2008.

Minnesota focus on system improvement
Minnesota: Focus on System Improvement Coverage

  • 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

Looking forward
Looking Forward Coverage

  • 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

For more information
For more information Coverage

Coming soon…

Health reform webpage on