State Approaches to Increase Insurance Coverage

1
State Approaches to Increase Insurance Coverage

• Improving access to private health insurance (
  focus of VA SPG )
• Expanding government-sponsored health insurance
• Comprehensive approach (combination of private
  and public options)

2
Options Improving Access to Private Insurance

• Subsidizing or Reducing Cost of Coverage
• Eliminating Barriers to Getting Insurance
• Mandating Coverage for Certain Groups

3
Options Expanding Government-Sponsored Insurance

• Expanding Medicaid/SCHIP Programs
• Strengthening Outreach/Enrollment for
  Medicaid/SCHIP
• Establishing or Expanding State High-Risk Pools
  that make Individual Coverage Available
• Sponsoring a State-Only (no federal funds)
• Health insurance program for low-income uninsured
• Universal health insurance plan covering all VA
  residents

4
State Options Expanding Private Coverage for
the Working Uninsured

• Reinsurance Programs
• Tax Incentives
• Sale of No-Mandate/Mandate-Lite Benefit Policies
• Tax-Free Medical Savings Accounts (MSAs)
• Group Purchasing Arrangements
• Small Group Rating Reforms
• Enact/Broaden State Continuation-of-Coverage Laws
• Allow Other Groups to Join State Employee Health
  Benefit Plans
• Other
• Employer Mandate
• Comprehensive Reform
• HIFA waivers

5
Expanding Private Coverage for the Working
UninsuredReinsurance Programs

• Reduce steep premium increases for small
  employers with high claims experience
• Present in at least 21 states
• VA Unsuccessful attempts to establish pilot
  projects
• Lessons Learned
• Many state pools are inactive or have low
  enrollment
• Substantial subsidies and marketing efforts
  needed
• Keys to success
• Low (subsidized) premiums, high benefits,
  significant insurer participation

6
Expanding Private Coverage for the Working
UninsuredTax Incentives

• Tax relief (deductions or credits) to
  employer/individual who purchases health
  insurance
• Examples
• Oklahoma 100 credit for employers whose
  eligible employees participate in state-certified
  basic benefit plan
• VA 2005 bill would provide income tax credit
  for small employers (lt 50 employees) for
  cost of health insurance premiums
• Several states allow self-employed individuals to
  deduct full amount of insurance premium payments
• Subsidies appear to have minimal impact on
  increasing coverage To be effective, subsidies
  must be substantial (60).

7
Expanding Private Coverage for the Working
UninsuredSale of No/Low Mandate Benefit Policies

• Intent By dropping requirement to cover
  mandated benefits, price of coverage will decline
  and more will buy coverage.
• Handful of states have exempted certain insurers
  from covering certain state health benefit
  mandates
• VA Established special advisory committee
  (1990) to examine efficacy of mandated health
  benefits 2004 bill would place moratorium on
  new insurance mandates until 2009.
• Lessons Learned
• Not clear that waiving benefit mandates increases
  coverage
• Benefit mandates have strong negative impact on
  small employers

8
Expanding Private Coverage for the Working
UninsuredTax-Free Medical Savings Accounts

• MSAs For covered individuals that assist to
  finance part of cost of deductibles, copays,
  other medical expenses not covered by insurance
  plan
• Most states allow income tax deductibility for
  MSAs as allowed under federal law
• VA 2002 implementation plan found to show low
  participation to date and insurers offering MSA
  coverage has declined 2005 bill would develop
  system of tax deductions for employers
  contributing to HSAs, providers delivering
  reduced/free care to HSA holders, and working
  poor.
• Lessons Learned Unclear if MSAs have had
  measurable impact on coverage rates Tax
  deductibility appears to mainly benefit upper and
  middle income employees (less likely to be
  uninsured).

9
Expanding Private Coverage for the Working
UninsuredGroup Purchasing Arrangements

• Most such arrangements permit small employers to
  band together to purchase insurance and negotiate
  provider discounts
• Over 20 states have authorized formation of
  purchasing cooperatives
• VA Previous studies found cooperatives not to
  be effective in achieving significant savings
  current legislation requests 1) state to
  design voluntary public/private purchasing pool,
  2) provider groups to report on
  high-deductible insurance plans
• Lessons Learned Little evidence that group
  purchasing increases coverage rate or ability of
  small employers to offer such insurance.

10
Expanding Private Coverage for the Working
UninsuredSmall Group Rating Reforms

• Designed in part to increase of small employers
  that offer insurance by controlling variability
  in premium rates.
• Examples
• NY Requires insurers to charge all small
  employers the same per-employee rate for the same
  coverage
• VA Small employers are provided with guaranteed
  issue and can also participate in
  association-sponsored health plans
  Earlier consideration given to including
  self-employed in small group market.
• Lessons Learned Small group reforms have not
  appeared to raise chances of small employers
  offering coverage or employees taking up coverage.

11
Expanding Private Coverage for the Working
Uninsured

• State Continuation-of-Coverage Laws
• Allow employees to continue health coverage under
  employer-sponsored plan after employee leaves
• Nearly all states require insurers to offer
  continuation coverage
• Lessons Learned No state studies exist
  Studies of federal COBRA shown to have positive
  influence.
• Allow Others to Join State Employee Health
  Benefit Plans
• State-employee health benefit plans in at least
• 30 states cover public colleges/universities 20
  states cover public schools 22 states cover
  cities and counties
• VA 2004 law allows part-time state employees to
  participate 1990 measure allows local govt
  employees to participate
• Lessons Learned Not known no studies exist