1	State Impact on Private Health Insurance J.P. Wieske Council for Affordable Health Insurance
2	Health Insurance Crisis Rising Costs 9.2% (2005) and 6.4% (2006) preceded by double digit increases Other estimates indicate lowest health care increase in 10 years for 2007, but still potentially double digit Fewer Businesses Offering Insurance 59.5% of the population had employment based insurance down from 60.4% in 2003 and 59.8 in 2004
3	Health Insurance Crisis 46.5 Million People were uninsured in 2005 45.8 million were uninsured in 2004 Up from 45 million in 2003 National Percentage has remained at 15.7% (2 year average) 1998 – 16.3% uninsured 2000 14.2% uninsured Majority of uninsured work for firms with less than 100 employees
4	The Uninsured 1/3 have incomes less than $25,000 19% have incomes over $75,000 (up from 16%) 18% 18-24 years Old 21% 45-64 32.7% of Hispanics are uninsured 81% of the uninsured were employed full or part time Anecdotal evidence of employee refusal of health insurance coverage
5	How Do States Regulate Insurance Large Group – Primarily federally regulated Mostly ERISA plans outside of state control Flexibility in rating and plan design, no guaranteed issue Small Group & Individual - Primarily state regulated products Mandated Benefits Community Rating / Rating Windows High Risk pools Rate / Form regulation
6	Affordable Health Insurance (Indiv.) Lowest Cost Cities Grand Rapids MI $159.06 Columbus OH $179.68 Akron OH $191.46 Des Moines IA $194.40 Louisville and Lexington KY $197.75 Phoenix, Tucson, Mesa, and Scottsdale $202.34 Highest Cost Cities Spokane WA $962.00 Yonkers and New York NY $916.79 Boston MA $865.18 Wichita, KS $773.06 Augusta GA $758.57 Jersey City and Newark NJ $744.02
7	Low Cost vs High Cost States Low Cost States Carriers are allowed to underwrite No guarantee issue requirement Fewer mandated benefits More choices Many have high risk pools High Cost States Community Rating or Modified Community Rating Guarantee Issue Lots of mandated benefits Fewer choices No High Risk Pools
8	Community Rating “At the same time, premium rating restrictions in the small group market were just as clearly associated with lower rates of private and overall health insurance coverage…” “…our results strongly suggest that guaranteed issue plus nongroup premium rating restrictions in tandem work to decrease overall and private health insurance coverage…” Variations in the Uninsured : State and County Level Analyses published by the Urban Institute.
9	Targeting Solutions The uninsured are diverse…young, old, rich, poor, employed, and unemployed Solutions should be targeted to specific populations There is no one solution to everyone’s problem
10	Targeted Solutions Chronically Ill – High Risk Pools “Invincibles” – Plan Design Flexibility Poor – Targeted Tax Credits No Group Coverage – Individual Tax Deduction, List Bill, Mandate-lite Affordability – Health Savings Accounts Small Business – Plan Design Flexibility, Mandate-Lite, Tax Credits, Subsidies
11	High Risk Pools 32 states have them Provides access to health insurance for the chronically ill Pools should have broad-based funding – typically a partnership Individuals pay premiums Insurers pay assessments (tax credit) State and federal government provide additional funding Extremely successful in ensuring healthy and thriving individual market
12	Public – Private Partnerships Premium Subsidy Plans Montana Targeted at small employers 2-5 Tax credits for providing health insurance Subsidies for those who do not Oklahoma 185% of Federal Poverty Employer-based coverage Funded by tobacco revenue
13	Public – Private Partnerships Tennessee – Replaced TennCare with Gov. Bredesen’s targeted and market-based approach. AccessTN – Tennessee’s high risk pool CoverTN – A program to provide low-cost health insurance. Contributions to premium from the state and optionally from employers. Expected to be priced at $100 CoverKids – Tennessee’s SCHIP program CoverRX – A subsidized prescription program
14	Public-Private “Partnerships” Dirigo Health – Sold as a public-private partnership Created to solve problems caused by guarantee issue and community rating Subsidized with tax on insured people Premiums and plan design based on sliding scale Limits on private healthcare investment Strict insurer rate review Only 25% previously uninsured Only 11,100 currently enrollees (Sept 2006) “We’ve spent more than $40 million of federal money … to essentially insure 2,300 or 2,400 people” State Sen. Karl Turner
15	Public Private Partnerships Arkansas -- Arkansas Safety Net Benefit Program Targeted at businesses with fewer than 500 employees that do not provide health insurance in previous 12 months Employers pay $15 for employees below 200% of poverty (state and feds pay the rest) $100 for above federal poverty Bare Bones-style benefit plan Demonstration begins in 2007 with maximum of 15,000 participants
16	Mandate-Lite Insurance plans Lower cost benefit plans -- sometimes referred to as limited benefit plans Allow carriers to offer plans without state mandated benefits. (See www.cahi.org for the state mandate chart.) States often limit the ability of carriers to offer these plans. (uninsured, market share, poor, or limited plan design) Uptake has been low in many states (commissions, up selling, unattractive benefit limitations)
17	Reinsurance Reinsurance Pool (Voluntary) Voluntary reinsurance pools allow carriers to pool the costs of high risk cases Very few carriers participate in most states Even fewer individuals are covered under the pool Primary benefit is to ensure solvency of very small carriers Minimum Coverage Model allows the state to provide reinsurance after a certain amount of coverage Typically provides very little real savings State will define minimum benefit plans and coverage limits Wisconsin is looking at this model
18	Tax Credits / Tax deductibility Economic studies of tax credits targeted at the poor could substantially reduce the uninsured rate ( Cutting Taxes for Insuring (AEI Press, 2002), Mark V. Pauly and Bradley Herring, Tax Credits for Health Insurance, (Urban-Brookings Tax Policy Center) Leonard E. Burman and Jonathan Gruber Many states have considered additional tax credits to encourage very small businesses (2-25) to offer insurance Individual health insurance is still not tax deductible
19	Resources Visit www.cahi.org to download publications including: Mandates in the States State Legislator’s Guide to Health Insurance Solutions Issues and Answers on Single Payer, Dirigo, Massachusetts, Healthy New York, and List Billing Or contact me jpwieske@cahi.org 920-499-8803