Envisioned LTC Structure

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Recent Trends in Health Insurance Premiums
Federal Employees Health Benefits Plan
Mercer
National Health Expenditures
Kaiser Family Foundation
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Growth In Uninsured Low, Moderate, Middle and
High Incomes
Source U.S. Census Bureau revised estimates
at www.census.gov .
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Impact of Cost Shifting from Uncompensated Care,
2005
10,979
4,065
Source K. Stoll, Paying A Premium, Families
USA, June 2005
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Indications of Under-compensated Care
Private Payer
Medicare
Medicaid (1)
Source 2007 Chartbook, Trends Affecting
Hospitals and Health Systems, April 2007.
American Hospital Association. Data by Avalere
Health, analysis of AHA Annual Survey data, 2005,
for community hospitals. (1) Includes Medicaid
Disproportionate Share payments.
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Coverage and Uninsurance Patterns
Source Battery-Powered Health Insurance?
Stability in Coverage of the Uninsured, Pamela
Farley Short and Deborah R. Graefe, Health
Affairs, November/December 2003
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Average Individual Market Premiums by State,
Single Policies, 2006-2007
Source 2006-2007 AHIP Individual Insurance
Survey (forthcoming)
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Premiums for Selected States, AHIP Small Group
Survey, 2006
Source Americas Health Insurance Plans, Small
Group Survey, 2006.
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Variation in Medicare Spending
Source Dartmouth Atlas of Health Care
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Quality Variation Even within Medicare
Source Dartmouth Atlas of Health Care
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Source American Hospital Associations
Trendwatch Chartbook 2007.
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Technological Progress Without Clear Studies of
Appropriate Use
Source McKinsey Company Accounting for the
Cost of Health Care in the United States, January
2007 (OECD Frost Sullivan MGI analysis)
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PHRs

• Interoperability
• Data Element Definition
• PHR/EHR Standards and Certification
• Flexibility
• Beyond Claims-Based Data

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AHIP Proposal to Expand Health Insurance to All
Americans
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AHIP Reauthorize and Expand SCHIP

• Increase SCHIP funding to help states cover
  projected shortfalls (at minimum funding to cover
  all children to 200 percent of FPL)
• Improve the environment for Premium Assistance
• Provide incentive funding for improving quality

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AHIP New Health Tax Credit for Children

• Encourage parents to maintain coverage for their
  children
• Proposal 200 per child / 500 per family

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AHIP Tax-Free Universal Health Account

• Pays for any type of health insurance
• Promotes portability
• Promotes continuity of coverage
• Serves as a 125

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AHIP State Performance Grant Program

• 50 billion seed money over 10 years to assist
  states in expanding access
• States would submit plans to achieve coverage
  goals
• Ensure affordable coverage
• Ensure availability of coverage
• Establish Medicaid to FPL
• Improve quality and reducing costs
• Establish healthy living incentives

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For each proposal, majority support extends to
Americans of each party.
Ranked by Percent Support
Rep
Ind
Dem
Giving a federal tax credit to low and moderate
income parents
Increasing funding for health insurance program
for children
Providing grants from the federal government
Having the federal government match contributions
Giving federal tax deduction for purchase of
private insurance
Expanding the federal governments Medicaid
program
Establishing a tax-free Health Account for all
Americans
Question Now I am going to read some different
ideas that some people have proposed for
providing health care coverage for people who are
currently uninsured. Would you please tell me if
you support or oppose each idea.
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Getting Started Right Away

• Areas in which we can act now
• Improving High Risk pools
• Funding
• SCHIP Reauthorization
• Giving consumers peace of mind about individual
  market coverage
• How the industry makes rescission and
  pre-existing exclusion decisions
• Third-party review of decisions
• Constructive Engagement
• States, Small Business, Early Retirees,
  Portability

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Background on Individual Market

• Approximately 15 million Americans are covered in
  the individual market
• Premiums in the individual market are more
  affordable than may be widely known
• According to AHIPs new survey of the individual
  market, national average annual individual market
  premiums are 2,613 for single and 5,799 for
  family coverage

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Average Individual Market Premiums by State,
Single Policies, 2006-2007
Source 2006-2007 AHIP Individual Insurance
Survey (forthcoming)
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Third Party Review for Rescission and Pre-Ex
Disputes

• State Responsibilities
• Create third-party review process for medical
  decisions related to pre-existing conditions
  denials and rescission decisions
• Allow individuals subject to rescissions to
  enroll in guarantee access plan on a retroactive
  basis
• Health Plan Responsibilities
• Develop clear and understandable communications
• Identify unclear or incomplete application
  information and follow up
• Limit rescissions to those based only on
  information that should have been included in a
  complete and accurate response or gathered during
  a review of unclear or incomplete information
• Provide coverage of pre-existing conditions if
  disclosed (unless subject to a rider)

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Clarifying Rights Responsibilities

• Consumer Responsibilities
• Have knowledge of their medical information when
  applying for coverage and promptly respond to
  inquiries about medical and personal information
• Provide complete and accurate answers on
  application
• Verify information on the application
• Follow health plan procedures for internal
  appeals
• Follow external review process

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Responding to State Universal Participation
Proposals
Insurance Enrollment Data
State Residency Records
State Insurance Verification System
Proof of Coverage
No Proof of Coverage
Auto-Enrollment

• Universal Seamless Coverage
• State matches enrollment data with state
  residency records
• State contacts residents identified as not
  having coverage
• State auto-enrolls those who do not provide
  proof of coverage
• State pays initial premiums for auto-enrolled
  residents
• Auto-enrolled residents responsible for premiums
  penalty

Penalties
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Responding to State Universal Participation
Proposals

• Steps for States Proposing Purchase Requirements
• Create insurance verification and monitoring
  system
• Implement auto-enrollment premium payment
  process
• Impose effective enforcement mechanisms
• Provide sliding-scale premium subsidies
• Fund coverage initiatives from a broad base of
  resources
• Role of Health Plans
• If a state universal participation program is
  proven effective, then health plans could
  guarantee issue without regard to pre-existing
  conditions

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Current Federal Proposals

• SHOP Act (Durbin)
• Wyden Bill
• Public Program/Tax Credit Combination Deals
• Various Regulatory (AHP, Shadegg)
• Obama/Clinton (Buy-In)
• McCain
• SCHIP Funding Fiasco

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State Proposals

• Massachusetts
• California
• Connectors
• Funding? Mandates Workable? Regulation without
  Funding and Workable Mandates?

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State-Based Reform Massachusetts
Massachusetts Uninsured by Income (as a of
poverty)

• Medicaid-eligible but not enrolled
• Outreach
• Mandatory enrollment

lt 100 106,000
Individual Mandate to Carry Health Insurance
gt 300 204,000

• Affordable Products
• Sliding Scale Premium Subsidies
• Insurance Connector

100-300 150,000

• Affordable Products
• Insurance Connector

Total Uninsured Population 460,000 (7.2 of
total) Total Population 6,400,000
Source Presentation to the Medicaid Commission
by Governor Mitt Romney, January 26, 2006
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Governor Schwarzenegger Original Proposal

• Individual Mandate with Subsidies
• Medi-Cal or SCHIP to 300 of Poverty for Kids
• Subsidies under 250 of Poverty
• Purchasing Pool
• Employers With 10 Workers Coverage or In
  Lieu Fee of 4 of Payroll
• Increased Medi-Cal Reimbursement
• Coverage Dividend 4 of Revenues for
  Hospitals 2 for Physicians
• Section 125 and HSA Contribution Improvements
• Cost, Quality, Wellness Provisions

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How the HCTC Works
PBGC
State Workforce Agencies
Eligibility Determinations
HCTC Program Office
State Department of Insurance Certifies Qualified
Insurers
Enrollee Premiums
35 Premiums
Eligibility and Enrollment Information
Health Plan 1
Plan Selection
Eligible Beneficiaries
Health Plan 2
U.S. Treasury (65)
Health Plan 3