State Insurance Plus Initiatives

1. State Insurance Plus Initiatives Cathy Schoen Senior Vice President, The Commonwealth Fund Alaska Work Shop Panel: National Overview and State Strategies Anchorage, Alaska December 7, 2006

2. Moving Forward: Recent State Strategies to Expand Insurance

3. Massachusetts Health Plan THE COMMONWEALTH FUND • MassHealth expansion for children up to 300% FPL; adults up to 100% poverty • Individual mandate, with affordability provision; premium subsidies between 100% and 300% of poverty • Employer mandatory offer, employee mandatory take-up • Employer assessment ($295 if employer doesn’t provide health insurance) • Connector to organize affordable insurance offerings through a group pool Source: John Holahan, “The Basics of Massachusetts Health Reform,” Presentation to United Hospital Fund, April 2006.

4. Massachusetts Strategies for Coverage: Building Blocks for Reform Government Health Care System • Builds on past low income expansion • Subsidized insurance • Uncompensated Care pool reform • The Connector • Meet quality and performance standards • New levels of “transparency” • Adjust to payment changes Expanded Coverage Employers Individuals • Fair Share Assessment • “Free Rider” provisions • Mandatory “cafeteria plans” • Individual Mandate Source: A. Lischko, “Massachusetts Health Reform.” NASHP 19th Annual State Health Policy Conference, Pittsburgh, PA (October 16, 2006) and Alliance for Health Reform Briefing, November 2006.

5. Maine’s Dirigo Health: Knitting Together Public, Private and Employer Insurance THE COMMONWEALTH FUND Annual expenditures on deductible and premium $2,738 • New insurance product; sliding scale deductibles and premiums below 300% poverty • Employers pay fee covering 60% of worker premium • Began Jan 2005; Enrollment 14,700 as of 4/30/06 • Combined with expanded public $2,188 $1,638 $1,100 $550 $0 * After discount and employer payment (for illustrative purposes only).

6. Building Quality Into RIte CareHigher Quality and Improved Cost Trends THE COMMONWEALTH FUND • Low income insurance expansion • Quality targets and $ incentives • Improved access, medical home • One third reduction in hospital and ER • Tripled primary care doctors • Doubled clinic visits • Significant improvements in prenatal care, birth spacing, lead paint, infant mortality, preventive care Cumulative Health Insurance Cost Trend Comparison Percent RI Commercial Trend RIte Care Trend Source: Silow-Carroll, Building Quality into RIte Care, Commonwealth Fund, 2003.Tricia Leddy, Outcome Update, Presentation at Princeton Conference, May 20, 2005.

7. Creating affordable plans for small businesses & individuals Increasing wellness programs Investing in health care technology Developing centers of excellence Leveraging the state’s purchasing power RI Quality Institute Non-profit coalition -- hospitals, providers, insurers, consumers, business, academia & government Partnered with “SureScripts” to implement state-wide electronic connectivity between all retail pharmacies and prescribers in the state Health Information Exchange Initiative Statewide public/private effort AHRQ contract 5 yr/ $5M Connecting information from physicians, hospitals, labs, imaging & other community providers Rhode Island:Five-Point Strategy THE COMMONWEALTH FUND

8. Illinois All-Kids • Effective July 1, 2006 • Available to any child uninsured for 6 months or more • Cost to family determined on a sliding scale • Linked to other public programs - FamilyCare & KidCare • Federal and state funds • Children <200% of FPL covered by federal funds • Children 200%+ of FPL funded by state savings from Medicaid Primary Care Case Management Program • All-Kids Training Tour • Public outreach program to highlight new and expanded healthcare programs

9. New Jersey Raises Age of Dependent Status for Health Insurance THE COMMONWEALTH FUND Millions uninsured, adults ages 19–29 • Rapid increase in uninsured young adults since 2000 • Several states have expanded age of dependents • As of 5/2006, NJ requires all state insurers to raise dependent age limit to 30 • Highest age limit in country • Covers uninsured, unmarried adults with no dependents, NJ residents or FT students • Premium capped at 102% of amount paid for dependent’s coverage prior to aging out • 200,000 young adults expected to receive coverage Source: S.R. Collins et al., “Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help,” Commonwealth Fund issue brief, May 2006. (Analysis of the March 2001–2005 Current Population Surveys)

10. Enacted March 2004 Partnership between WV Public Employees Insurance Agency (PEIA) & private market insurers Small business insurers pay providers at same rates negotiated by PEIA West Virginia Small Business PlanLeveraging Purchasing Power THE COMMONWEALTH FUND

11. Initiated in 2004 – alliance between state, private businesses, and labor groups Purchase health insurance for 70% of state residents ~3.5 million people Pool purchasing power to drive value in health care delivery system Set uniform performance standards, cost/quality reporting requirements & technology demands Four key strategies: 1. Reward or require “best in class” certification 2. Adopt and utilize uniform measures of quality and results 3. Empower consumers with easy access to information 4. Require use of information technology Minnesota Smart-Buy Alliance THE COMMONWEALTH FUND

12. Wisconsin Collaborative for Healthcare Quality Voluntary consortium formed in 2003 -- physician groups, hospitals, health plans, employers & labor Develops & publicly reports comparative performance information on physician practices, hospitals & health plans Includes measures assessing ambulatory care, IT capacity, patient satisfaction & access Wisconsin Health Information Organization Coalition formed in 2005 to create a centralized health data repository based on voluntary sharing of private health insurance claims, including pharmacy & laboratory data Wisconsin Dept of Health & Family Services and Dept of Employee Trust Funds will add data on costs of publicly paid health care through Medicaid Wisconsin THE COMMONWEALTH FUND

13. Maine, Maine, Vermont, Rhode Island have quality initiatives built into coverage expansions Maine Created Maine Quality Forum to advocate for high quality health care and help Maine residents make informed health care choices. Massachusetts Cost and Quality Council formed Vermont Quality improvement initiatives Interest in joint purchaser strategies – public and private payers collaborate to share information and leverage Several States Looking to More Comprehensive Health Reform Statewide THE COMMONWEALTH FUND

14. What Are the Goals of More Universal Coverage?Insurance as Foundation to Improve System Performance • Meaningful, affordable, and equitable access • Broad risk pooling • Eliminate insurance market incentives that reward avoidance of health risk or cost shifting • Use insurance as foundation to facilitate system-wide - • Timely, appropriate and effective care • Enhanced primary, preventive and well-coordinated care • More effective chronic care • Lower insurance administrative costs by simplification and more efficient coverage • Stable coverage with seamless transitions • Reduce marketing, underwriting and overhead costs • Simplification and coordination • Use insurance expansions as a vehicle and foundation to achieve more integrated, high quality and efficient care

15. State Strategies to Expand Coverageto Provide a Foundation to Improve Access, Quality and Cost Performance THE COMMONWEALTH FUND • Develop blueprints toward more universal coverage • Coherent policies that maximize connection and minimize complexity • Expand public programs and “connect” with private • Provide financial assistance for affordability – premium assistance; “buy-in” provisions • Assure benefit designs cover primary, preventive and essential care • Pool risk and purchasing power, with multi-payer collaboration • More efficient insurance arrangements and simplification • Pool purchasing power • Develop reinsurance or other financing strategies to make coverage more affordable, pool risk and stabilize group rates • Shared responsibility: mandate that employers offer and/or individuals purchase coverage

16. CATEGORIES OF PEOPLE IN THE U.S. HEALTH INSURANCE SYSTEM For the rich, “Disneyland” the sky-is-the limit policies without rationing of any sort (Boutique medicine) The federal-state Medicaid program for certain of the poor, the blind and the disabled The 47 million or so uninsured tend to be near poor The employed and their families who are typically covered through their jobs, although many small employers do not provide coverage. Near poor children may be temporarily covered by Medicaid and S-Chip, although 7-8 million are still uninsured. The Young Working-age people QUIMBIES SLIMBIES Persons over age 65, who are covered by the federal Medicare program, but not for drugs or long-term care. Often the elderly have private supplemental MediGap insurance People age 65 and over The poor The near poor The broad middle class The rich The very poor elderly are also covered by Medicaid Source: Professor Uwe Reinhardt, Princeton University

18. Making Coverage More AutomaticEmployer vs. Public Insurance EmployeeHealth BenefitDecision Low Income Public Program Applicant Decision Learn about programs Take ajob Obtain an application Decide to participate; choose plan Apply and prove eligibility Choose plan Payroll deduction Make regular payments by check or money order Periodic proof of eligibility 85%-90% participation rates 40%-70% participation rates Source: Based on D. Remler, S. Glied “What Can the Take-Up of Other Programs Teach Us: Increasing Participation in Health Insurance Programs,” Am. J. of Public Health, January 2003.