STATE STRATEGIES TO EXPAND OR MAINTAIN HEALTH CARE COVERAGE

1. STATE STRATEGIES TO EXPAND OR MAINTAINHEALTH CARE COVERAGE Presentation to the Citizens’ Health Care Working Group May 12, 2005 Linda T. Bilheimer, Ph.D.

2. Overview • Variation in nature of the problem among the states • Strategies affecting private health insurance • Public program strategies • Impact of current fiscal constraints • Future directions

3. Variation in the Uninsured ProblemAmong States *U.S. estimates are for 2003. Source: Kaiser Commission on Medicaid and the Uninsured, statehealthfacts.org. Estimates basedon pooleddatafrom the 2003 and 2004 March Supplement to the Current Population Survey.

4. Variation in the Relative Size of the Poverty Population Among States Source: U.S. Census Bureau, Income, Poverty and Health Insurance Coverage in the United States: 2003. Estimates fromthe 2003 and 2004 Current Population Survey, Annual Social and Economic Supplements.

5. Efforts to Improve Availability and Affordability of Private Coverage • Underwriting and rating reforms in individual and small-group markets • Exemptions from mandated benefits • Group purchasing arrangements • Reinsurance • High-risk pools • Tax incentives

6. Expansions of Public Coverage:Income Eligibility • Focus on low-income children, following enactment of SCHIP in 1997 • Most states at 200% FPL or above for Medicaid/SCHIP children, by July 2004 • Expansions for low-income parents and other adults, in some states • Income eligibility standards generally much lower for adults

7. Variation in Medicaid Income Eligibility for Parents Source: Kaiser Commission on Medicaid and the Uninsured, statehealthfacts.org.

8. Expansions of Public Coverage: Facilitating Enrollment • Outreach • Simplification of enrollment and re-enrollment processes • Coordination among public coverage programs

9. Strategies for Enrolling More Children in Medicaid/SCHIP, April 2003 • No interview at renewal (49 states) • No interview at application (46 states) • No asset test (44 states) • 12-month renewal period (41 states) • 12-month continuous eligibility (14 states) • No income verification by family (12 states) • Presumptive eligibility in Medicaid (8 states) Source: Donna Cohen Ross and Laura Cox, “Preserving Recent Progress on Health Coverage for Children and Families: New Tensions Emerge,” Kaiser Commission on Medicaid and the Uninsured, July 2003.

10. Effects of Economic Turndown onState Medicaid Programs • Reductions or slower growth in state revenues • Counter-cyclical enrollment growth in Medicaid

11. Recent Rapid GrowthIn Medicaid Enrollment Source: Eileen R. Ellis, Vernon K. Smith and David M. Rousseau, Medicaid Enrollment in 50 States: June 2003 Data Update. Kaiser Commission on Medicaid and the Uninsured, October 2004.

12. Effects of Recession on Coverage of Children and Adults Uninsured Employer Other Medicaid/SCHIP Source: Urban Institute estimates from the 2001 and 2004 March Supplement to the Current Population Survey.

13. Medicaid’s Fiscal Burden on the States Source: National Associationof State Budget Officers, 2003 State Expenditure Report.

14. State Attempts to Control Costs and Maintain Coverage (1) • Scaling back eligibility (MO, TN) • Cutting optional benefits (vision, dental, podiatry, Rx) • Freezing or cutting provider payments • Initiating or increasing premiums and cost-sharing • Shifting more beneficiaries into managed care • Restructuring benefits, to expand limited coverage to a broader population (UT, NJ, OR, MI) • Using Medicaid to help low-income workers pay employer premiums (ID, OR, MI, NM)

15. State Attempts to Control Costs and Maintain Coverage (2) • Shifting care from hospitals and nursing homes to home settings (NY) • Restructuring public coverage programs, with beneficiary incentives to control costs, adopt healthy behaviors (FL, SC) • Restructuring health care system in the state (ME, MA)

16. HRSA Grantees: A Look at the Future? • 2000-2005, State planning grants (SPGs) to study demographic and health insurance trends • More recently, pilot planning grants (PPGs) to: • Plan for implementation of policy option • Test option among population subgroup • Implement plan • SPG research findings: large majority of uninsured are workers or their dependents Focus on employment-related strategies

17. Other Strategies Explored by SPG Grantees • Outreach to eligible unenrolled people • Expansions of public coverage to adults • Health savings accounts • Single-payer and multipayer universal coverage models

18. PPG Strategies • “Three-share” models to subsidize employer premiums (DE, GA, IL) • Other premium subsidies for employer coverage (CT, IN, OK, KS) • Purchasing pools (IL, OK, VI) • Reinsurance mechanisms (IL, KS)

19. Growing State Interestin Employer Mandates Legislation Pending as of March 2005 • Employer mandates (10 states) • Conditioning state contracts and business tax breaks on covering employees (11 states) • Reporting on employees enrolled in Medicaid and SCHIP (20 states) Source: HR Policy Association, Policy Brief, April 1, 2005.

20. Governors’ Proposals for Medicaid • Restructure the Medicaid program with different benefits for different sub-populations • Relatively healthy, low-income people • SCHIP model, with different benefits & cost-sharing for different groups • Ability to coordinate with tax credits, employer buy-ins, etc. • Disabled • More consumer choice, with focus on improving quality • Elderly • New alternatives for financing long-term-care (LTC) and end-of-life care • Slow the growth of low-income people becoming Medicaid eligible • Refundable individual tax credits • Employer tax credits • State purchasing pools • Reinsurance or other risk-sharing models for insurers • Slow the growth of Medicaid long-term care (LTC) spending • Tax subsidies for LTC insurance • LTC partnerships