The Michigan Healthcare Marketplace

1
The Michigan Healthcare Marketplace

Initial Observations
Eileen Ellis Health Management Associates
eellis_at_healthmanagement.com
2
What Do We Know and What Do We Need to Learn?

• Who is insured/covered in Michigan?
• How are they insured?
• Who is without insurance/coverage?
• Why are they uninsured?
• What characteristics of the Michigan insurance
  market impact the rate of insurance?
• How does insurance regulation impact todays
  market and impact options for the future?

3
Sources of Information

• Data that will be reviewed by the Data Workgroup
• Household survey
• Employer survey
• Focus Group reports
• Data collected through town hall meetings
• National Sources with State data
• Current Population Survey (CPS) (2004 data just
  out)
• Medical Expenditure Panel Survey (MEPS)
• Snapshots of Americas Families (Urban Institute)
• Models workgroup will use State Office of
  Financial and Insurance Services (OFIS) data on
  the Michigan insurance marketplace

4
Overview of Coverage in Michigan in 2003
Primary Source of Coverage
Source Kaiser State Health Facts
5
Managed Care In Michigan in 2004

• Group Coverage
• Individual
• Medicare Comp.
• Medicaid/SCHIP
• Other
• HMO Total

• 1,730,917
• 11,761
• 20,998
• 889,065
• 10,206
• 2,705,763

HMO penetration in Michigan in 2003 was 26.7 per
Kaiser State Health Facts, versus 23.7 national
average. OFIS 2004 data implies increase to
about 30.
Source Michigan Office of Financial and
Insurance Services 2004 HMO Enrollment
Information
6
How adequate are existing Insurance products in
Michigan?

• HRSA Requires that Michigan answer questions
  about the adequacy of current insurance products
  
• For persons of different income levels?
• For persons with pre-existing conditions?
• We must also indicate how adequacy is defined.

7
Affordability of Premiums Group Coverage
In 2003 the average premium in Michigan was
similar to the national average, but the employee
share of costs was lower.
Note for single coverage the results are
similar for MI as nationally employee pays 15
in MI, and 17 nationally.
Source Kaiser State Health Facts.
8
Employer-Based Coverage
Employer-based coverage is more prevalent in
Michigan.
Source 2003 Medical Expenditure Panel Survey
(MEPS)
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Individual Coverage

• Michigan has guaranteed coverage through Blue
  Cross Blue Shield of Michigan (BCBSM).
• Michigan has a lower percentage covered through
  individuals plans than the national average (4
  vs 5), but has 6 more persons covered through
  groups.
• Premiums for individual policies are age and
  community rated.
• Individual policies for family coverage may cost
  from 248 to 993 per month.
• Individual policies when a family converts from
  group coverage to individual coverage may cost
  from 206 to 854 per month.

Source BCBMS Individual Care Blue hospital,
surgical and medical plan premiums, August 2005.
10
Medicaid Coverage in Michigan
Source Michigan Department of Human Services
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Medicaid Coverage in Michigan

• Optional groups covered in Michigan
• Pregnant women children lt age 1 to 185 of the
  federal poverty level (FPL)
• Other children to 150 of FPL on Medicaid to
  200 of FPL through MI Child.
• Low-income women diagnosed with breast or
  cervical cancer.
• Aged disabled individual with income lt 100
  FPL.
• Medically Needy families, aged, disabled.
• 55,000 Childless adults to 35 FPL through the
  Adult Benefits Waiver (ABW)
• Disabled individuals through Ticket to Work
  initiative.
• But Michigan only covers parents to about 35 of
  FPL.
• Many states at 100 to 150 - no waiver required.

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Adequacy of Options for Low-Income Individuals

• Income status of Michigan insured
• Less than 100 FPL 4 (238,000)
• 100-199 FPL - 12 (702,000)
• 200 FPL or more 84 (5,086,000)
• Income status of Michigan uninsured
• Less than 100 FPL 37 (412,000)
• 100-199 FPL - 26 (292,000)
• 200 FPL or more 37 (409,000)

Note Michigan percentages nearly identical to US
average.
Source Estimates by Kaiser Foundation and Urban
Institute based on 2003 and 2004 CPS.
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Pre-existing Conditions

• HIPAA has reduced this issue from the time when
  HRSA first developed the SPG program.
• No limit when transferring from one employer to
  another with a certificate of credible
  coverage.
• HMO group products in Michigan may not include a
  pre-existing condition waiting period.
• Individually purchased HMO coverage may be
  subject to a six month waiting period.

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Variation in Benefits Prevalence of
Self-Insured Employers

• HRSA asks what variations exist in benefits for
  Non-group, small group, large group and
  self-insured.
• Specific data is difficult to obtain.
• Since BCBSM and HMOs cover a large portion, could
  use their data.
• Most states have not addressed this issue in
  their reports to HRSA.
• One state plans to survey all insurers.
• Mandated benefits will be included in the report,
  but do not apply to self-insured.
• OFIS has no data on prevalence of self-insurance.
• Ideally comes from employer survey.

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Employer-Based Coverage In Michigan Health
Insurance Offered
Source 2003 Medical Expenditure Panel Survey
(MEPS)
16
Characteristics of Non-elderly Uninsured in
Michigan 2002 2003

• Children represent 16 in MI, 20 in US.
• Employment Status
• Families with at least one full-time worker are
  63 of the uninsured in MI and 69 for the US.
• Families with no worker are 22 of uninsured in
  Michigan and 19 for the US.
• Families with only part-time workers are 15 of
  the uninsured in MI and 12 for the US.

Estimates by Kaiser Foundation and Urban
Institute based on 2003 and 2004 CPS.
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The State as a Purchaser