Michigan’s top health care priority: Insuring the uninsured

Michigan’s top health care priority:Insuring the uninsured Rick Murdock Michigan Association of Health Plans

Michigan Association of Health Plans Industry voice for 19 health care plans Members cover over 2.4 million Michigan residents Our mission: Advocate for health care that is High quality Affordable Accessible

MAHP Agenda for Michigan • Don’t fix what’s not broken • Don’t fix what people don’t want fixed • Fix what people do want to fix • Fix what policymakers agree needs to be fixed

Don’t fix what’s not broken • How would you rank the quality of your health insurance today? • Excellent 35% • Good 37 • Fair 15 • Less than fair 4 • Poor 3 Statewide MAHP commissioned phone survey, 600 likely voters, 9/13-17, 2009 72 percent of people consider their health insurance excellent or good

Fix what people want fixed • Do you support or oppose making it a priority to give every single Michigan citizen quality and affordable healthcare? • Strongly support 47% • Somewhat support 24 • Somewhat oppose 13 • Strongly oppose 13 71 percent support giving all quality health care

Fix what policymakers know needs to be fixed • About 1.1 million uninsured • Drives up health care cost for all • Still get health care • Often at expensive emergency rooms • Uncompensated care = Cost shifting • Average family paying $1,000/year due to uncompensated care • Getting more people into managed care can mean lower costs for all

Who benefits by covering uninsured? • The uninsured • Businesses who are paying $1,000/covered family in hidden taxes for uncompensated care caused by state and federal policies • Hospitals and physicians who are covering the uninsured today

Far more uninsured than in individual market

Characteristics of smart expansion of insurance to uninsured Create a level playing field for all insurers More competition is good for all consumers Consumer-centric Serving greater public good not one interest Take pressure off of other insurers (cross-subsidy, uncompensated care)

Characteristics of smart expansion of insurance to uninsured All interest groups have a stake in its implementation (Pay/Play) Advances competition on quality and performance Must provide certainty of coverage, costs, and responsibility.

Characteristics of smart expansion of insurance to uninsured Maximize use of Medicaid/MiChild (Preserving safety net) Established programs History of working well Need to ensure all people who are eligible are in these programs Let’s federal government share costs

MAHP and consumer groups agree Standard benefits package All carriers required offer, limited by market share Low income subsidized in some fashion Consistent treatment of pre-existing conditions by all carriers Goal is to limit gaming of system But still ensure those in need can get care

MAHP and consumer groups agree • Subsidize by combination of government & private sector • Reinsurance options/pools

Policy changes needed Boost Medicaid coverage by maximizing federal support Need to increase state match substantially Use existing $ now allocated toward uninsured Establish consensus on other revenue sources including self insured and insured Small investment to dramatically cut $1,000 “hidden tax” that all commercial subscribers paid today

For those not eligible for Medicaid Require all carriers to offer the same basic benefit packages Include doctor visits Some level of hospitalization Smart use of pharma Smart use of copays High copay for ER No copay for maintenance drugs (Value based purchasing)

For those not eligible for Medicaid Subsidize so not pay more than 10 percent of income for coverage Subsidy comes from same sources used for Medicaid full funding

For those not eligible for Medicaid Provide for key consumer protections Guaranteed issue proportional to market share 6 month limit on pre-existing conditions and other consumer protections agreed to in both House and Senate discussions

Number of technical issues Must have level playing field on provider payments If companies can negotiate different rates, system falls apart Need reinsurance plan—what level or attachment point How much hospitalization? Annual cap? These can be worked out if broad plan adopted

This plan can work Creates competition Many companies offering similar product Maximizes federal dollars Feds willing to pay $1.71 for every $1 state pays Provides consumer protections Lessens problems of individual market Cuts cost of uncompensated care Cuts hidden tax now imposed on all insured

Concepts being explored by Legislature Sen. Tom George, Rep. Marc Corriveau issue their plans—both Chairs communicating issues with each other Many pieces of MAHP/consumer proposal in both Helping them to work out differences Hope to see resolution this year

Other reforms Recognize some regulatory reform needed Make it easier for carriers to bring products to market Accelerated rate approval process for all carriers This prevents rate shocks Increases competition Preserving appropriate regulatory oversight

Michigan’s top health care priority: Insuring the uninsured