The Michigan Healthcare Marketplace Eileen Ellis Health Management Associates Initial Observations

1 Health Management Associates What Do We Know and What Do We Need to Learn? Who is insured/covered in Michigan?  How are they insured? Who is without insurance/coverage?  Why are they uninsured? What characteristics of the Michigan insurance market impact the rate of insurance? How does insurance regulation impact today’s market and impact options for the future?

2 Health Management Associates Sources of Information Data that will be reviewed by the Data Workgroup:  Household survey  Employer survey  Focus Group reports  Data collected through town hall meetings  National Sources with State data: Current Population Survey (CPS) (2004 data just out) Medical Expenditure Panel Survey (MEPS) Snapshots of America’s Families (Urban Institute) Models workgroup will use State Office of Financial and Insurance Services (OFIS) data on the Michigan insurance marketplace

3 Health Management Associates Overview of Coverage in Michigan in 2003 – Primary Source of Coverage Source: Kaiser State Health Facts

4 Health Management Associates Managed Care In Michigan in 2004 Group Coverage Individual Medicare Comp. Medicaid/SCHIP Other HMO Total 1,730,917 11,761 20, ,065 10,206 2,705,763 Source –Michigan Office of Financial and Insurance Services: 2004 HMO Enrollment Information HMO penetration in Michigan in 2003 was 26.7% per Kaiser State Health Facts, versus 23.7% national average. OFIS 2004 data implies increase to about 30%.

5 Health Management Associates How adequate are existing Insurance products in Michigan? HRSA Requires that Michigan answer questions about the adequacy of current insurance products: For persons of different income levels? For persons with pre-existing conditions? We must also indicate how adequacy is defined.

6 Health Management Associates Affordability of Premiums Group Coverage In 2003 the average premium in Michigan was similar to the national average, but the employee share of costs was lower. Source: Kaiser State Health Facts. Note – for single coverage the results are similar for MI as nationally – employee pays 15% in MI, and 17% nationally.

7 Health Management Associates Employer-Based Coverage Source: 2003 Medical Expenditure Panel Survey (MEPS) Employer-based coverage is more prevalent in Michigan.

8 Health Management Associates Individual Coverage Michigan has guaranteed coverage through Blue Cross Blue Shield of Michigan (BCBSM). Michigan has a lower percentage covered through individuals plans than the national average (4% vs 5%), but has 6% more persons covered through groups. Premiums for individual policies are age and community rated.  Individual policies for family coverage may cost from $248 to $993 per month.*  Individual policies when a family converts from group coverage to individual coverage may cost from $206 to $854 per month.* *Source: BCBMS Individual Care Blue hospital, surgical and medical plan premiums, August 2005.

9 Health Management Associates Medicaid Coverage in Michigan Source: Michigan Department of Human Services

10 Health Management Associates Medicaid Coverage in Michigan Optional groups covered in Michigan:  Pregnant women & children < age 1 to 185% of the federal poverty level (FPL)  Other children to 150% of FPL on Medicaid; to 200% of FPL through MI Child.  Low-income women diagnosed with breast or cervical cancer.  Aged & disabled individual with income < 100% FPL.  “Medically Needy” families, aged, disabled.  55,000 “Childless adults” to 35% FPL through the Adult Benefits Waiver (ABW)  Disabled individuals through Ticket to Work initiative. But Michigan only covers parents to about 35% of FPL.  Many states at 100% to 150% - no waiver required.

11 Health Management Associates Adequacy of Options for Low- Income Individuals Income status of Michigan insured  Less than 100% FPL – 4% (238,000)  % FPL - 12% (702,000)  200% FPL or more – 84% (5,086,000) Income status of Michigan uninsured  Less than 100% FPL – 37% (412,000)  % FPL - 26% (292,000)  200% FPL or more – 37% (409,000) Source: Estimates by Kaiser Foundation and Urban Institute based on 2003 and 2004 CPS. Note: Michigan percentages nearly identical to US average.

12 Health Management Associates Pre-existing Conditions HIPAA has reduced this issue from the time when HRSA first developed the SPG program. No limit when transferring from one employer to another with a “certificate of credible coverage”. HMO group products in Michigan may not include a pre-existing condition waiting period. Individually purchased HMO coverage may be subject to a six month waiting period.

13 Health Management Associates Variation in Benefits & Prevalence of Self-Insured Employers HRSA asks what variations exist in benefits for Non- group, small group, large group and self-insured.  Specific data is difficult to obtain.  Since BCBSM and HMOs cover a large portion, could use their data.  Most states have not addressed this issue in their reports to HRSA.  One state plans to survey all insurers.  Mandated benefits will be included in the report, but do not apply to self-insured. OFIS has no data on prevalence of self-insurance.  Ideally comes from employer survey.

14 Health Management Associates Employer-Based Coverage In Michigan: Health Insurance Offered Source: 2003 Medical Expenditure Panel Survey (MEPS)

15 Health Management Associates Characteristics of Non-elderly Uninsured in Michigan: 2002 & 2003 Children represent 16% in MI, 20% in US. Employment Status:  Families with at least one full-time worker are 63% of the uninsured in MI and 69% for the US.  Families with no worker are 22% of uninsured in Michigan and 19% for the US.  Families with only part-time workers are 15% of the uninsured in MI and 12% for the US. Estimates by Kaiser Foundation and Urban Institute based on 2003 and 2004 CPS.

16 Health Management Associates The State as a Purchaser ProgramEnrollment State Active Employees & Dependents 127,000 State Retirees & Beneficiaries68,000 Medicaid Managed Care913,000 Medicaid Fee For Service531,000 MI Child34,000 Adult Benefits Waiver62,000 Total1,735,000