Implementing Massachusetts Health Reform Families USA Brian Rosman Health Care For All ( January 2007

Presentation Outline What Is Health Care For All MA Health Reform History – Why Third Wave? Round 3: Chap. 58 Acts of 06 – What Passed? Insurance Connector: Subsidized Coverage – CCHIP MassHealth Expansions & Restorations Individual and Employer Responsibility Insurance Market Reforms Quality, Costs, Health Disparities and more Why and How Did Chapter 58 Happen? Whats Happening with Implementation? Is Chapter 58 a National Model? Whats the Emerging Political Window of Opportunity for Health Care Access Reform?

Health Care For All: Who We Are Just Massachusetts We Run Health Policy Coalitions Affordable Care Today (ACT!!) Childrens Health Access Coalition (CHAC) Racial & Ethnic Health Disparities Action Network (DAN) Oral Health Advocacy Task Force Private Market Consumer Coalition Emerging projects on e-Health and Quality We Run Programs to Help Consumers Consumer Helpline (telephone/ ), Outreach & Enrollment, Health Law Advocates We Communicate to Inform Everyone updates, Blog (blog.hcfama.org)

Brief History of MA Health Reform 1988: Universal Health Care Law $1680 Pay or Play Employer Mandate Delayed three times/Repealed 1996 CommonHealth, Student Insurance Mandate, Medical Security Plan (unemployed), Healthy Start (pregnant) 1996: MassHealth Waiver Expansion law Medicaid->MassHealth; Enrollee growth from 670,000 (95) to 1,020,000 (01) Uninsurance Drop: 680,000 to 365,000 Coverage for all children – CMSP Senior Pharmacy Program Both reform waves inspired national action 1988 Leads to state-based innovations 1996 Leads to Creation of SCHIP

April 12, 2006: Chapter 58

Medicaid Expansions and Restorations MassHealth ( = Medicaid waiver): Childrens coverage expands to 300% fpl from 200% fpl MassHealth enrollment caps lifted Essential, CommonHealth, HIV Optional Benefits Restored: dental, dentures, eyeglasses, other adult services New smoking cessation and wellness benefits $3M outreach/enrollment grants $270M ($90 per year) rate hikes to hospitals and physicians Years 2/3 tied to Pay for Performance/Racial Ethnic health disparities benchmarks Bottom Line: 53,000 new enrollees since July – half kids, half adults

Chapter 58 – Insurance Connector and Commonwealth Care Insurance Connector set up as quasi-public authority – 10 member board Provides Commonwealth Care - subsidized coverage for below 300% fpl Provides Commonwealth Choice – non- subsidized affordable coverage for individuals and small business Defines individual mandate

Subsidized Coverage Commonwealth Care: subsidized coverage for uninsured adults below 300% of poverty Rules: No employer coverage available in past 6 months COBRA or non group OK Legal residents OK, even Medicaid ineligible private coverage – offered by 4 Medicaid MCOs

Subsidized Coverage Below 100%: No premium, no deductibles Medicaid Drug copays ($1 / $3) comprehensive benefits, including dental No major issues 34,000 enrolled, mostly from charity care program (Uncompensated Care Pool)

Subsidized Coverage 100% - 300%: Sliding scale premiums, no deductibles commercial copays ($10 - $30) comprehensive benefits, but no dental Enrollment just getting started Were pushing to add dental To be decided: employee buy-in for those with employer coverage Top Issue: are premiums too high?

Subsidized Coverage Premiums for lowest cost plan (per month): 100%-150% $18 ($9,800 - $14,700) 150%-200% $40 ($14,700 - $19,600) 200%-250% $70 ($19,600 - $24,500) 250%-300% $106 ($24,500 – $29,400) note: income amounts rounded

Individual Responsibility Individual Mandate Beginning 7/1/07, all residents 18+ must obtain health insurance coverage. Penalty if no coverage on 12/31/07 Penalties assessed if affordable coverage is available 2007: loss of personal tax exemption 2008+:tax penalty=½ cost of affordable plan per month Issue: what is affordable? Coalition doing focus groups, research. Decision this spring. What is Minimum Creditable Coverage? that meets mandate. Initial proposal: $1,500 deductible, generics only. We issued policy guidance.

Employer Responsibility Employer Mandate Fair Share Employer Contribution Employers (11+ workers) who dont offer fair and reasonable coverage must pay $295 per worker Definition of fair and reasonable neither: either pay 25% of premium, or cover 33% of workers Were filing bill for 50% of premium, 50% of workers, include part-timers ERISA issue????? Employers must facilitate Section 125 cafeteria plan for pre-tax health insurance, or pay Free Rider Surcharge

Non-Subsidized Coverage Commonwealth Choice Plans for individuals and small business 3 levels: high, mid and minimum creditable coverage Tough new issues for us to learn: List billing Brokers and intermediaries Actuarial equivalents etc... Starts July 1

Chapter 58– Insurance Market and Other Reforms Small/Nongroup Insurance Market Reforms Non-group (individual) market will merge with small group market on 7/1/07. Study commission found non-group goes down 15%, small group up 1.5% Young adults (19-25) can stay on parents plans for 2 years after lose dependency Reduced-benefit plans for year olds Other Reforms $20M Public Health/Prevention Restorations Diabetes, cancer, infection control, more Quality and Cost Council Sets cost and quality benchmarks Produces website with data/findings Racial/Ethnic Health Disparities Council Statewide Disparities Council Pay for Performance benchmarks Computerized Prescription Order Entry – $5 million

How Do the Pieces Fit Together? Percent of States Total Uninsured Targeted by different approaches

Coalition Role After Bill Passes Coalition continues strong. ACT! is now ACT!! Monitoring implementation – central source of information Administrative advocacy with Connector and state agencies (Division of Insurance, Medicaid) Introduced legislation with 15 provisions Its never over

Is Chapter 58 a National Model…? Reasons why not… Different makeup of uninsured population Lower proportion of uninsured Lower proportion of lower-income uninsured Highly regulated insurance market Guaranteed issue, prohibition on medical underwriting, modified community rating Essential protections for individual responsibility Robust Safety Net/Deep Federal Financing Reasons why… Individual/Employer/Government responsibility Confronting the affordability challenge Less a policy blueprint/More a political one

Medicare Medicaid Employer Coverage IndividualMandate Medicaid Expansions Employer Responsibility Insurance Market Reforms Affordable Products Young Adult Products Connector Commonwealth Care

Where From Here? State Actions – New, invigorated conversation CA, CO, CT, MI, MO, NY, OH, RI, WA, WI, IL… 10 states now Democratic Gov and leg (was 3) Congressional Action – SCHIP expires Medicare issues Access – is there room on the agenda? 2008 Presidential Campaign Changed dynamic for all Democrats Changes dynamic for all Republicans Different kind of conversation in 2008