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- J.P. Wieske
- Council for Affordable Health Insurance
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- Rising Costs
- 9.2% (2005) preceded by double digit increases
- Fewer Businesses Offering Insurance
- 59.8% of the population had employment based insurance down from 60=
.4%
in 2003
- Uninsured Numbers Rising
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- 45.8 million were uninsured in 2004
- Up from 45 million in 2003
- National Percentage has remained at 15.7%
- 1998 – 16.3% uninsured
- 2000 14.2% uninsured
- Illinois 14.2 % -- below the national average
- Majority of uninsured work for firms with less than 100 employees=
li>
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- 1/3 have incomes less than $25,000
- 1/6 have incomes over $75,000
- 41% 18-34 years Old
- 21% 45-64
- 79% were employed full or part time
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- Provide access to low-cost health insurance for those with low incom=
es
- Decrease the uninsured rate
- Ensure health insurance remains affordable
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Targeting Solutions
- The uninsured are diverse…young, older, rich, poor, employed, =
and
unemployed
- Solutions should be targeted to specific populations
- There is no one solution to everyone’s problem
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- Large Group
- Mostly ERISA plans outside of state control
- Flexibility in rating, no guaranteed issue
- Small Group & Individual
- Primarily state regulated products
- Face numerous cost drivers
- Smaller groups
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- Significant costs difference state by state
- Mandated Benefits
- Plan Design Flexibility
- Community Rating / Rating Windows
- High Risk pools
- Rate / Form regulation
- Demographics
- Health Care Costs
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- Enzi Bill – Small Business
- Small Business Health Plans
- Elimination of Mandates and Rating Rules
- Choice Act -- Individual
- Interstate insurance sales
- Maintains state regulatory structure
- SMART Act / Optional Federal Charter
- Simplify regulation of insurance
- Replace state regulation with federal regulation
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- Mandate-lite insurance plans
- High Risk Pools
- Rate Reform
- Pooling Arrangements (co-op plans, MEWAS, AHP’s)
- Public-Private “partnerships”
- Massachusetts
- Healthy New York
- Dirigo Health
- Premium Subsidies
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- Health Savings Accounts/ Consumer driven plans
- Low-cost / mandate free plans
- Limited Benefit Policies
- Plan Design Flexibility
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- Pooling arrangements are designed to provide large group benefits to
small groups
- Often increases choice in the marketplace
- Competes with the private market
- Usually limited to small segment of the population (small businesse=
s,
farmers)
- Rarely leads to significantly decreased costs
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- State Employee Plans – allows private individuals or small gro=
ups
to purchase state employee insurance
- Very difficult to appropriately price
- Benefit plans often richer than the private market
- Guaranteed issue/ community rated coverage leads to death spiral
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- MEWAs (Multiple Employer Welfare Arrangements)
- Self-funded plans for multiple employers who band together
- Limited state regulatory authority and limited federal oversight
- If improperly funded, could lead to insolvency
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- Co-operative Plans – allows cooperatives – especially
farmers – to sell a plan designed for its members
- Flexible plan design allows coverage to reflect members needs
- Community Rated plans may lead to “death spirals”
- May create unlevel playing field for the rest of the private market=
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- State-run pools – These plans compete with the private market
replacing the private insurer with the state
- Plans are often guarantee issue and community rated
- Unless the plans offer additional cost savings features (i.e.
mandate-lite, or tax savings) very little savings
- Can become a dumping ground for high risk companies leading to a de=
ath
spiral.
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- 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 7300 currently enrollees
- We’ve spent more than $40 million of federal money … to
essentially insure 2,300 or 2,400 people” State Sen. Karl Turn=
er
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- Massachusetts Plan -- Market decimated by guaranteed issue and commu=
nity
rating
- Employer mandate
- Employers pay $295 fee and responsible employee and dependent clai=
ms
in excess of $50,000 (in aggregate)
- Must offer cafeteria / section 125 plan
- Individual mandate – lose tax deduction
- Combines Individual and Small Group Market
- Creates “Connector” which will define “affordable
insurance” and clearinghouse
- Extensive reporting requirements including personal medical data
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- Healthy New York
- New York has guarantee issue, community rating and no high risk poo=
l
- Covers 107,000 people
- Reinsures coverage between $5,000 - $75,000
- Community rated and guarantee issue (similar to NY)
- HMO based (no out-of-network coverage)
- Limited benefit policies (eliminates mandates)
- Losses funded by the state of New York
- Primarily targeted at uninsured poor (individual and small group
coverage)
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- 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
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- Lower cost benefit plans -- sometimes referred to as limited benefit
plans
- Allow carriers to offer plans without state mandated benefits. (CAHI estimates Illinois has
38benefit mandates.
- 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)
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- Health Savings Accounts have been successful at targeting some unins=
ured
- Consensus number is around 30% of H.S.A. purchasers were previously
uninsured
- Successful at targeting very small businesses (50% previously uninsu=
red)
- State Tax deductibility helps protect employees
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- 32 states have them including Illinois
- Targets individuals who are uninsurable
- Pools should have broad-based funding
- Extremely successful in ensuring healthy individual market
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- 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
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- Targets employed individuals not eligible for group insurance
- Allows individuals to purchase an individual insurance plan through
payroll deduction
- Easier for individuals to purchase coverage
- No employer involvement except agreement to remit premiums
- May receive favorable tax treatment
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