Access to Health Care Coverage for West Virginia’s Uninsured Small Business SCI Summer Workshop for State Officials “Pressing Forward: Cuts, Coverage and Creativity” Gerald Roueche & Mary Angel June 28-29, 2004 Chicago, Illinois Bob Wise, Governor

2 Problem Scope 81% of West Virginia businesses employ 50 or fewer workers; of these, only 41% offer health insurance to employees. 1 out of 5 West Virginia adults ages , most of whom are employed, have no health insurance.

3 Goal Establish a viable insurance option for the working uninsured partnered with the strengths of PEIA, but not subsidized by the state budget. Create a private/public partnership which includes health care providers, insurance carriers and state government to deliver the product. Offer health insurance coverage to uninsured small businesses and bring those employees into the pool of insured West Virginians.

4 The Legislation Senate Bill 143 §33-16D-16 is under the Insurance code, “Marketing and Rate Practices for Small Employer Accident and Sickness Insurance Policies”.

5 Key Points of Senate Bill 143 Plan open to 2-50 employees. Use of Public Employees Insurance Agency reimbursement rates by participating carriers. Crowd-out policy; – 6 months bare before effective date of June 13, months bare after June 13, 2004.

6 Eligible Carriers Must be licensed in accordance with West Virginia insurance code. Must have an existing provider network that will be used for this plan.

7 Eligible Small Business – Employer Share The employer must pay a minimum of 50% of the premium cost for individual coverage. 75% of eligible employees must participate.

8 Carrier Directives - Loss Ratio Carriers must demonstrate a minimum anticipated loss ratio of 77% to be eligible to ask for a rate increase after the first year of the plan (current requirement is 73%).

9 Option for PEIA Plan Offering If no carrier has offered a plan under this legislation by July 1, 2005, PEIA and the Insurance Commission may develop a plan to be administered by PEIA with the approval of the West Virginia Legislature. Written notice of such intent would be provided to the Legislature’s Joint Committee on Government and Finance, PEIA’s Finance Board and the West Virginia Health Care Authority.

10 Policy Advisory Committee The Insurance Commissioner shall appoint a body to monitor the plan. Appointees must include representatives of labor, hospitals, physicians, business, local government, insurance carriers and uninsured persons, among others.

11 Reporting Requirements Carriers shall provide to the Insurance Commissioner by December 1, the number of plans and and number of persons covered. The Commissioner shall report by January 1 to the Legislature’s Joint Committee on Government and Finance regarding this plan.

12 West Virginia Lessons Learned Be willing to take the issue to the public; –To raise the level of awareness. –To establish a sense of immediacy. Imperative all players are brought into the picture – brokers, the uninsured, hospitals, primary care centers, doctors. One left out can spell doom. Be inclusive.

13 West Virginia Lessons Learned (continued) Nothing new and startling, but ………..the realities of working in the “political” world are true again. Discussions of the issues must include: – legislative leadership, key committee chairmen, influential members.

14 West Virginia Lessons Learned (continued) Must be willing to adjust to the changes in the “political” landscape; –Compromise on significant increase in premiums. –Loss ratio decrease. –Decision that Governor Wise would not seek second term. –Financial crises that have hit most states – no one is willing to take risks; Unwillingness of key leaders to expand PEIA.

15 West Virginia Going Forward From a governmental standpoint, maintaining viable PEIA physician and provider rates of reimbursement; –Results of May 2004 opt-out. Will the private carriers make a substantive effort to establish a viable, sustainable product?

16 West Virginia Going Forward (continued) Potential problems with the brokers; –Perception of small business as problems. –Lower commissions. –Further intrusion of government.

17 West Virginia Going Forward (continued) Passage of the legislation was the easy part. Market place success will be the true test. Grappling with the issue of excluded small businesses.