Three Approaches to Achieve Near-Universal Coverage in Delaware

1
Three Approaches to Achieve Near-Universal
Coverage in Delaware

• Based on Work Prepared for theSingle Payer
  Committee
• Jack A. Meyer, Ph.D.
• Elliot K. Wicks, Ph.D.
• Economic and Social Research Institute

2
Building Blocks ApproachELEMENTS

• Medicaid and SCHIP become single program
• Cover everyone up to 200 of poverty
• Make enrollment automatic, where possible
• State purchasing pool for small employers and
  individuals offering multiple insurers
• Reduce insurers ability to rate premiums based
  on risk
• Have young adults covered under parents policies
• State-funded tax credits, graduated by income
  for
• High-risk individuals
• People with incomes 200 to 300 of poverty

3
Building Blocks ApproachASSESSMENT

• Substantially more people covered
• Fragmented system remains
• Portability somewhat improved for those in new
  combined SCHIP/Medicaid program and those in the
  state pool
• Resource costs (medical services consumed) higher
  because more people covered little change in
  administrative costs
• Substantial increased budgetary cost to pay for
  those newly eligible for public programs and for
  those with tax credits
• Improved equity more equal treatment of equals
  broader sharing of risks
• No new tools to control costs
• Little government compulsion or disruption of
  status quo

4
Employer Play or Pay MandateELEMENTS

• Employers not offering coverage pay a fee to
  cover cost of coverage for standard plan.
• Employers pay 80 for employee and dependents
• Employees contribute 20
• Fee is waived for employers who offer coverage
  and pay 80 of premium
• Temporary subsidies for low-wage, low-profit
  employers
• State operates Delaware Health Insurance Pool
• Contracts with multiple insurers
• Provides coverage for those without employer
  coverage

5
Employer Play or Pay MandateELEMENTS (cont.)

• All people below 150 of poverty covered by
  Medicaid/SCHIP
• Non-employees must buy coverage through the pool,
  premiums graduate by income
• Insurers cant sell any policy except those
  offering at least the standard benefits and
  also requiring employer to pay 80 of premium

6
Employer Play or Pay MandateASSESSMENT

• Nearly everyone covered, but coverage sources
  fragmented
• Improved portability if in the pool
• Increased real resource cost more people
  covered little administrative cost savings
• Budgetary cost not greatly increased employers
  and employees bear most new costs, so off
  budget
• Broader risk sharing
• Improved equity equals treated equally
• Increased compulsion on employers and all
  residents

7
Single State Purchasing PoolELEMENTS

• Eligibility all legal residents
• Automatically enrolled in state pool two
  variants
• Single state plan (like Medicare for all) or
• Multiple insurers (like state employees plan for
  all)
• Benefit package
• Up to 150 of poverty Medicaid benefits
• Everybody above 150 of poverty actuarially
  equal to most popular small-group plan (but could
  buy supplemental coverage)

8
Single State Purchasing PoolELEMENTS (cont.)

• Financing
• Single payer
• Premiums (community rated) with graduated
  subsidies up to median income others pay full
  cost
• General revenues cover subsidies
• Multiple payer
• Employer 8 of payroll
• Employees 2 of wages between 10,000 and
  200,000
• Health Care Commission would administer

9
Single State Purchasing PoolASSESMENT

• Universal coverage, automatically
• Full portability of coverage
• Real resource cost (medical services consumed)
• Single payer Higher because of new people
  covered reduced by large administrative savings
• Multiple payer Somewhat less administrative
  savings
• Substantially higher government budgetary costs
• Single payer to cover subsidies (other costs
  paid by premiums)
• Multiple payer Payroll tax a major source of
  financing, but expenditure is on-budget

10
Single State Purchasing PoolASSESMENT (cont.)

• Cost control
• Single payer State has great leverage to bargain
  with providers and vast data
• Multiple payer State bargains with insurers
  insurers compete for enrollees (like state
  employees plan)
• Much greater equity
• No penalty for high-risk people risk very
  broadly shared
• Subsidies based on income (need)
• Equals treated equally
• Substantial compulsion and disruption of status
  quo