Transcript What is Hospital Free Care?

Massachusetts Health Reform
Nancy Turnbull
Blue Cross Blue Shield of Massachusetts Foundation
The Massachusetts Law:
A Landmark
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Ambitious goal: Near universal coverage
Transcends ideology
Combines policy solutions from the right and the
left
 Partnership between federal government and state
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Novel approaches
Individual mandate
 Employer responsibility
 Merger of small group and direct pay insurance
markets
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Energizing effect on other states
Massachusetts:
The Building Blocks for Reform
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Relatively low rate of uninsurance
History of health coverage expansions
Broad Medicaid program
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1115 waiver implemented in 1996
Uncompensated Care Pool
Funded in part by assessment on health plans and
hospitals; paid by employers
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Strong Safety Net providers
Highly regulated small group and individual
health insurance markets
Massachusetts:
The Moment for Reform
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Increasing number of people without coverage
Medicaid waiver renewal
• $385 million per year in federal funds at risk
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Leadership by Governor, Senate President and Speaker of
House
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Affordable Care Today (ACT) Coalition
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Health reform ballot initiative (including payroll tax)
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Growing concerns about under-funding of
Uncompensated Care Pool and Medicaid cost-shifting
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BCBSMA Foundation’s Roadmap to Coverage initiative:
begun in early 2004
The Starting Point: People were Losing
Coverage in Massachusetts
800,000
700,000
683,000
671,000
748,000
600,000
627,000
500,000
496,000
682,000
549,000
400,000
365,000
300,000
644,000
418,000 439,000
460,000
200,000
100,000
0
1995
1998
2000
2002
2003
Sources: “Health Insurance Status of Massachusetts Residents,” 1998, 2000, 2002, 2004,
Massachusetts Division of Health Care Finance and Policy. “Massachusetts Residents Without
Health Insurance, 1995,” Blendon, et al, Harvard School of Public Health. Office of Medicaid
MassHealth caseload snapshot, 7/31/06.
2004
State estimat
CPS estimate
Roadmap to Coverage:
Goals
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Provoke thoughtful public debate
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Inform debate with rigorous, independent, nonpartisan information
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Urban Institute
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Use Foundation’s neutrality to engage
policymakers and leaders
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Develop practical, phased-in plan to extend
coverage to most, if not all, Massachusetts
residents
Roadmap to Coverage:
Three Phases
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The cost of medical care for the uninsured
(November 2004)
Detailed options to achieve near universal
coverage (June 2005)
Phased-in implementation plan
(October 2005)
All reports available at:
www.roadmaptocoverage.org
Deliberate process to build
understanding and support
Policy committee of Foundation board
 Joint meeting of BCBS and Foundation boards
 3 “Access Summits”
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Presentations by Urban, panel discussions
 Keynote by major leader: Senate President, Governor,
and House Speaker
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Pre-summit briefings with legislators, media and
other key opinion leaders
 Regular meetings with other important
stakeholders, including 10-15 key media contacts
 Increased grant funding to key advocacy groups
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Urban Institute Policy Options
Four “building blocks”
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Medicaid expansions for children, parents and
childless adults
Sliding scale tax credits up to 400% FPL
New voluntary purchasing pool
Publicly funded reinsurance
Three options:
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Individual Mandate: Building blocks + individual
mandate
Broad Employer Mandate: Building blocks + individual
mandate + employer pay-or-play for firms with 10 or
more employees
Narrow Employer Mandate: Building blocks +
individual mandate + employer pay-or-play for firms
with 500 or more employees
Comparison of Roadmap to Coverage
and Final Health Care Reform Law
Roadmap to Coverage
MassHealth
Expansions
Subsidies
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Final Health Care
Reform Law
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Purchasing
Pool
Reinsurance
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Individual
Mandate
Employer
Responsibilities
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Key Elements of the Massachusetts Law
Medicaid Expansions and Restorations
 Health Insurance Connector
 Commonwealth Care – Premium Subsidy
Program
 Health Insurance Market Reforms
 Individual Mandate for all adults
 Employer Responsibilities (for firms > 11
employees)
 Medicaid provider rate increases
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MA Health Care Reform Law:
Key Components: Connector
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New public authority (10-member board)
Administers “Commonwealth Care” premium
subsidy program
Will offer “affordable” health insurance
products to individuals and small businesses
(50 or fewer employees)
Premiums can be paid with pre-tax dollars
 Mechanism to reach part-time and seasonal
workers, individuals with more than one job
 Can pool premium contributions from multiple
employers
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MA Health Care Reform Law:
Key Components: Commonwealth Care
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Eligibility rules
Household income <300% FPL
• Resident of Commonwealth for previous 6 months
• Includes “qualified aliens” and documented
refugees
• Not eligible for MassHealth or Medicare
• No employer coverage “available” for past 6
months
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Can be waived by Connector – employer’s contribution
then goes to offset state premium subsidy costs
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Benefits are comparable to, or better than,
most employer coverage
Commonwealth Care Premiums
Minimum* Monthly Premiums (Percentage of Income)
FPL
Individual
Couple (2 adults)
Couple with 3
children
<100%
$0 (0%)
$0 (0%)
$0 (0%)
100.1 – 150%
$18 (1.5-2.2%)
$36 (2.2-3.3%)
$36-$48 (2.3-2.6%)
150.1 - 200%
$40 (2.5-3.3%)
$80 (3.6-4.9%)
$116 (3.3-4.4%)
200.1 – 250%
$70 (3.4-4.3%)
$140 (5.1-6.4%)
$200 (4.6-5.8%)
250.1 – 300%
$106 (4.3-5.2%)
$212 (6.4-7.7%)
$296 (5.8-6.9%)
* Premiums could be higher if individual selects a higher cost
MCO and/or higher cost product.
Mass Health Care Reform Law
Key Components: Market Reforms
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Non-group and small-group insurance markets
will be merged
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Retains regulatory structure of small group law
Guaranteed issue and renewal
Modified community rating by class of business
Must comply with all mandated benefit laws
Young Adult plans for 19-26 year olds
More flexibility in benefit design
• Must be rated in same risk pool as individuals and
small groups
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Age for eligibility for dependent coverage for
health insurance raised to 25 years
Mass Health Care Reform Law
Key Components: Individual Mandate
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Applies to all MA adult residents (July 1, 2007)
• As long as “affordable” coverage is available
Standard of affordability to be determined by the Connector
(based on household income)
Minimum acceptable benefit package also to be determined
by Connector
Enforcement mechanisms
• Indicate insurance policy number on state tax return
• Loss of state personal income tax exemption for tax year
2007
• Fine for each month without insurance equal to 50% of
affordable insurance product cost for tax year 2008
Massachusetts Health Reform:
The Financing
 Reallocation
total)
of existing financing (~2/3 of
 Federal
financing for safety net and uninsured
 Portion of Uncompensated Care Pool funds
 New
funds (~1/3 of total)
 Medicaid
expansion
 New assessments on employers
 State general revenues
 Premium contributions and cost-sharing by
newly insured people
Massachusetts Health Reform:
How Do the Pieces Fit Together?
Percent of State’s Total Uninsured Targeted by Different Aspects of Law
45%
40%
40%
35%
29%
30%
25%
20%
17%
14%
15%
10%
5%
0%
MassHealth
expansions
Commonwealth Care
Affordable Products
(for those with
incomes 300-599%
FPL)
Individual Mandate
(those with incomes
>600% FPL)
Insurance
Market
Reforms
Individual
Mandate
Connector
Affordable
Products
Employer
Responsibility
Commonwealth
Care
Medicaid
Expansions
Medicare
Employer Coverage
Medicaid
Young
Adult
Products
What’s Been Accomplished Since April?
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On July 1st
 MassHealth benefits restored to ~575,000 members
 40,000 new adults and children eligible for Medicaid
(~20,000 enrolled so far)
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As of October 1st
 57,000 with incomes <100% FPL became eligible for
Commonwealth Care
 No premiums, broad coverage, little cost-sharing
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As of January 1st
 155,000 with incomes 101-300% FPL will be eligible to
purchase Commonwealth Care
Massachusetts: Challenges Ahead
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Outreach and enrollment
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Adequacy of benefits and level of cost-sharing of products
offered through the Connector
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To whom will individual mandate apply? How will
“affordability” be defined?
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Public opinion abut the individual mandate
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Employer response and behavior: how much crowd-out?
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Adequacy and sustainability of financing
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Keeping a strong safety net for those who will remain
uninsured (especially undocumented immigrants)
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Moderating health care cost trends
Unexpected Good News: Number of
Uninsured Appears to be Falling
1,200,000
996,000
1,000,000
800,000
600,000
857,000
921,000
928,000
683,000
680,000
748,000
618,000
496,000
400,000
941,000
1,033,000
365,000
460,000
418,000 439,000
372,000
200,000
0
1995
1998
2000
2002
2003
2004
Sources: “Health Insurance Status of Massachusetts Residents,” 1998, 2000, 2002, 2004 and
2006, Massachusetts Division of Health Care Finance and Policy. “Massachusetts Residents
Without Health Insurance, 1995,” Blendon, et al, Harvard School of Public Health. Office of
Medicaid MassHealth caseload snapshot, 7/31/06.
2005
Uninsured
MassHealth
CPS
Massachusetts: Reasons to be
excited about what we’ve done
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Sweeping reform – not an incremental approach
Victory for Medicaid
Shared model of responsibility – individuals, employers
and government
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Shared problem, shared solution
Recognition of need and willingness to invest in reform
Win for public health, too
Health disparities get attention in the law
Massachusetts:
Lessons for Others
Political not a policy blueprint
 The past as prologue
 “Making the moment”
 Think big
 No reform is possible without strong
organizing and advocacy
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The National Opportunity Ahead
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Critical mass of state coverage expansion efforts
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Next year in Congress
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Maine, Illinois, Massachusetts, Vermont
Reauthorization of SCHIP program
2008 Presidential race
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Massachusetts law has raised bar for candidates on
health care