St@teside

Maine 

Earlier this month, Maine Governor Baldacci announced new plans for the Dirigo Health Reform initiative that was enacted in 2003. Coined “Dirigo Health 2.0,” Baldacci’s proposal is multi-faceted and, following in the philosophy of the original Dirigo reform, looks to build upon the existing programs aimed to expand access, control costs, and improve quality in the state.

Baldacci has proposed the following initiatives under the Dirigo 2.0 proposal:

1. Improve cost-containment and delivery of care in MaineCare, the state’s Medicaid program by:

• Maintaining current eligibility levels;
• Assuring MaineCare members get the right care at the right time at the right price by encouraging clinical care management, improving the management of behavioral health benefits, and conducting prior authorization for radiology services like private insurers;
• Improving coordination of benefits to recover money from private carriers, workers compensation insurers, and the Department of Veterans Affairs for services they, not MaineCare, should pay; and
• Increasing the prescription co-pay by $0.50.

     2.  Modifications to DirigoHealth include:

• Reducing the employer cost to join;
• Allowing the state to self-insure the plan;
• Allowing the Savings Offset Payment (the current subsidy funding mechanism) to continue for only one year as a transition. On July 1, 2008, the current 2 percent premium tax on insurers will be extended to HMOs. Additionally, a surcharge on hospital payments paid by all payers equal to the amount of health care provided to previously underinsured and uninsured enrollees in DirigoChoice will be implemented.
• Enacting an employer requirement and an individual mandate (for those over 400 percent FPL) in 2008 and 2009, respectively.

      3.  Other Cost Containment and Market Reforms:

• Requiring review & approval of small group rate increases; and encouraging transparency of those rates for consumers;
• Creating the Maine Reinsurance Plan to make individual coverage more affordable (revenues from the assessment on HMOs will support this plan);
• Allowing the self-employed to purchase in the small group market;
• Requiring insurance discounts for non-smokers and worksite wellness programs; and
• Retaining voluntary hospital cost containment targets.

These proposals will require legislative approval.

Massachusetts 

The issue of affordability has been the cornerstone of all discussions related to the Massachusetts health reform. Recently, SCI highlighted the Health Insurance Connector board’s approval of new Commonwealth Choice plans which will be available starting May 1. On April 12, the board approved what appears to be one of the last policy determinations needed to implement the unprecedented reform—new affordability standards that will guide the determination of which individuals will be exempted from the individual mandate.

The newly approved standards eliminate premiums in the Commonwealth Care program for an estimated 29,000 low-income residents. The new standards also reduce premiums for another 23,000 residents.[1]

• The income threshold for an individual who can receive a full subsidy and not have to pay monthly premiums for the Commonwealth Care health insurance program will increase from 100 percent FPL ($10,210) to 150 percent FPL ($15,315).
• For those earning between 151 and 200 percent FPL ($20,420), the monthly premiums for Commonwealth Care will be reduced from $40 to $35.

Next steps for the board include developing draft regulations and conducting hearings. The final regulations should be completed in June in time for the health reform law to go into effect on July 1.

New York 

On April 1, 2007, Governor Eliot Spitzer and the New York State Legislature finalized a budget that will expand health insurance coverage for children. The proposed budget would raise the eligibility requirement for Child Health Plus from 250 percent of the federal poverty level (FPL) to 400 percent FPL. This expansion, effective September 1, 2007, will create the nation’s highest ceiling for SCHIP and will allow access to almost all of the 400,000 children in New York currently uninsured.

The following proposed, graduated sliding fee scale for premiums makes it more affordable for families to access coverage for their children than the existing buy-in program:[2]

• 251 percent to 300 percent FPL: $20 per month/per child; family max $60 per family/per month
• 301 percent to 350 percent FPL: $30 per month/per child; family max $90 per family/per month
• 351 percent to 400 percent FPL: $40 per month/per child; family max $120 per family/per month

The budget also would simplify the Medicaid enrollment process by eliminating unnecessary documentation at renewal for children and adults enrolled in Child Health Plus. This will not only make it easier for families to keep their coverage, but also save administrative costs associated with re-enrollment of individuals who have lost their coverage.

It is unknown how much the program expansions will cost or how many people will enroll in the programs as a result of the changes. About one million state residents are eligible for Medicaid but are not enrolled.

Rhode Island 

Rhode Island Health Insurance Commissioner Christopher Koller recently unveiled new, low-premium “wellness health benefit plans” that are intended to encourage small businesses to offer health coverage to workers. These plans will include coverage for physician visits, hospitalization, preventive services, and prescriptions drugs. These new plans were developed after legislation requiring insurers to offer plans to businesses with 50 or fewer employees was passed last year. The law requires premiums to equal no more than 10 percent of the average annual wages in the state. Employee-only premiums will average $314, 18 percent lower than similar plans currently on the market. Blue Cross Blue Shield of Rhode Island and UnitedHealthcare of New England plan to offer a “basic plan” and an “advantage plan.” Each employee will have the option of choosing between the two types of benefit designs with both being priced at the same level.

The design of the new lower-premium plans is intended to give incentives to enrollees to be more actively engaged in managing their own health care. The plan proposes to achieve significant cost savings though financial incentives for enrollees who improve and maintain their health through five key wellness initiatives:

• Selection of a primary care physician;
• Completion of a health risk appraisal;
• Pledge to either remain at a healthy weight or participate in weight management programs if morbidly obese;
• Pledge to either remain smoke free or participate in smoking cessation programs; and
• Pledge to participate in disease and case management programs, if applicable.

For enrollees who choose to participate in the wellness programs, it is proposed that deductibles, co-pays and co-insurance will be reduced to amounts normally seen in plans with much higher premiums.[3]

Further cost reductions for the proposed wellness health benefit plan will be achieved through the development of tiered provider networks. The plan will encourage enrollees to select providers who have demonstrated cost effective, high quality practice patterns. Commissioner Koller estimated that between 5,000 and 10,000 small business employees will enroll in the plans.

Tennessee 

Governor Phil Bredesen recently launched Tennessee’s CoverKids program aimed at providing health insurance to tens of thousands of Tennessee’s uninsured children. As part of Gov. Bredesen’s multipronged insurance initiative, Cover Tennessee, CoverKids will provide comprehensive health coverage for children age 18 and under with household income below 250 percent FPL. Additionally, CoverKids will provide maternity coverage for pregnant women. Families with annual incomes higher than 250 percent FPL will be able to purchase insurance through the program for a monthly premium.

CoverKids benefits include preventive care, such as well-baby and well-child exams, and age-appropriate immunizations with no co-payments. Families will not have to pay a monthly premium but each participant will pay reduced co-payments for services.

The state is allocating $63 million over the next three years to pay for CoverKids, which will be matched at a three-to-one ratio by the federal government. Tennessee officials hope to enroll 75,000 of the state’s 130,000 uninsured children in CoverKids over the next three years.