Maryland Health Care Reform John M. Colmers Secretary Department of Health and Mental Hygiene SCI Coverage Institute Kick-Off September 26, 2007

Key Problems High Uninsured Health care unaffordable Disparate quality initiatives that lack focus Access CostQuality

Policy Environment $1.7 billion structural deficit Likely special session to address revenue package Many health reform ideas proposed MD Coverage Institute Team charged with consensus development –Includes legislative and administration health leaders

Maryland Health Policy Strengths Unique All-Payer Hospital Waiver finances over $800 million in uncompensated care Investments in data and transparency –Leader in report card development Medicaid has stable delivery system - HealthChoice –National leader in data driven rate setting –7 MCOs participate, covering 75% of Medicaid population –Systems and incentives to manage care and improve quality High Risk Pool (MHIP) – fills important gap in individual market –Surplus funds and delivery system potential for further coverage Indoor Air Act – significant achievement to improve health, strong anti-tobacco initiatives

Insurance Coverage by Income Source: Maryland Health Care Commission. “Health Insurance Coverage in Maryland through 2005” (Nonelderly) 0% 20% 40% 60% 80% 100% Poor (≤100%) Near Poor (101% to 200%) Low Moderate (201% to 300%) Mid Moderate (301% to 400%) High Moderate (401% to 600%) High (601%+) Uninsured Medicaid & Other Public Direct Purchase Employment Based

Public Coverage (Effective 07/01/06) Note: This chart is for illustrative purposes only. Each coverage group has specific eligibility and some asset requirements, which are not shown Age 65 and Over Parents or disabled age 19 to PW 185 Poverty Level: 1 person = $10,210 2 persons =$13,690 4 persons = $20,650 As of 1/24/2007 MCHP Premium MCHP Medicaid Primary Adult Care Program – 116% FPL Pregnant Women Medicare 300

MD Small Business More Likely to Offer Insurance Than in Many Other States Still less than ½ offer insurance

High cost, low quality High cost & high readmission rate

Maryland’s Long term goals Expand insurance coverage – improve access to care and improve health status –Reduce uncompensated care – reduce health insurance premiums Improve quality and contain costs – sustain expansions in coverage –Encourage adoption of health IT – support quality initiatives –Inventory quality improvement activities – align incentives –Improve management of chronic disease – reduce health care costs, improve health

Proposed Approach Include Administration and Legislative Leaders Separate state funding sources from policy options Develop consensus on 3 policy options: –Low-cost: <$50 million state funds –Mid-range: $150 million - $250 million state funds –Comprehensive Reform: >$250 million state funds Options should inform future state revenue debate Goal is long term plan to address uninsured, health costs and quality –Incremental steps towards long term goal

Prioritizing First Steps State experience demonstrates reform is long term process, building on prior efforts Maryland not likely able to do all of these now Priorities: –Focus on reforms that are consistent with long term vision for reformed health system –Maximize federal funding –Subsidies should be targeted –Cost and quality essential to sustainability