States try it again

New meth­ods tried to lure unin­sured to high-risk pools

Modern Healthcare - - The Week In Healthcare - Re­becca Vesely

States are ex­plor­ing ways to boost en­roll­ment in a fed­eral pro­gram that pro­vides health in­surance to the unin­sured with pre-ex­ist­ing con­di­tions amid lag­ging pub­lic en­thu­si­asm.

Pro­pos­als to en­cour­age par­tic­i­pa­tion in­clude hav­ing pri­vate foun­da­tions pick up part of the monthly pre­mium costs, re­duc­ing pre­mi­ums and in­creas­ing plan de­ductibles.

This month, HHS re­leased en­roll­ment fig­ures for the pro­gram, called the Pre-ex­ist­ing Con­di­tion In­surance Plan. It was cre­ated in 2010 as part of the fed­eral health­care re­form law and is funded with $5 bil­lion. It sun­sets in 2014, when in­sur­ers will no longer be able to deny cov­er­age be­cause of pre-ex­ist­ing con­di­tions.

As of Feb. 1, about 12,000 peo­ple na­tion­wide had en­rolled. That’s far less than an­tic­i­pated; last sum­mer, Medi­care’s chief ac­tu­ary pre­dicted en­roll­ment would top 375,000 by the end of 2010. HHS runs the pro­gram in 23 states and the District of Columbia; the re­main­ing states op­er­ate the pro­gram them­selves.

States say there are three pri­mary bar­ri­ers to get­ting peo­ple en­rolled: the cost of pre­mi­ums; a pro­vi­sion in the law re­quir­ing that qual­i­fied ap­pli­cants be unin­sured for at least six months; and lack of aware­ness about the pro­gram.

“The main ob­sta­cle is the pre­mium costs,” said Scott Wilk­er­son, pres­i­dent and CEO of Physi­cians Health Plan of Mid-Michi­gan, which runs the pro­gram for the state. “It’s un­for­tu­nate be­cause it is a good pro­gram.”

The Michi­gan plan had only 163 en­rollees as of mid-Fe­bru­ary, Wilk­er­son said. He es­ti­mates that it could han­dle a max­i­mum of 3,500 en­rollees, with a bud­get from HHS of $141 mil­lion over the three-year life of the pro­gram. Monthly pre­mi­ums range from $172 to $687, with a $2,500 de­ductible and an out-of-pocket limit of nearly $6,000.

Since the pro­gram launched in Michi­gan three months ago, claims costs have to­taled about $700,000 for the 163 en­rollees. “I’m not sur­prised,” Wilk­er­son said. “The whole point is these peo­ple have sig­nif­i­cant health prob­lems.” Mem­bers in­clude those di­ag­nosed with cancer left un­treated for half a year be­cause of lack of in­surance, and those need­ing surg­eries be­cause of long­stand­ing un­treated con­di­tions, he said.

Michi­gan and other states are work­ing with the fed­eral gov­ern­ment to de­velop new low­er­cost prod­ucts to boost en­roll­ment. Physi­cians Health Plan is rolling out a dif­fer­ent ben­e­fit de­sign in 30 to 60 days that in­cludes a higher de­ductible and lower monthly pre­mium, for in­stance. The plan is also reach­ing out to foun­da­tions and other phil­an­thropic groups that might be will­ing to pick up part of the pre­mium costs to mem­bers, Wilk­er­son said.

The Pa­tient Pro­tec­tion and Affordable Care Act re­quires that pre­mi­ums for the pro­gram be set at mar­ket rate, so states are un­able to of­fer deep dis­counts. Last fall, HHS is­sued guid­ance to states on ac­cept­ing third-party fund­ing to sub­si­dize the pre­mium costs. HHS is con­cerned about em­ploy­ers dump­ing pa­tients into the pools or hos­pi­tals sub­si­diz­ing cov­er­age to in­crease their own bot­tom lines. How­ever, third-party sub­si­dies are al­lowed un­der the law, and HHS has told states it will mon­i­tor any such ar­range­ments.

In Ore­gon, which has also seen slow en­roll­ment, sub­si­dies are al­ready avail­able. The state’s Fam­ily Health In­surance As­sis­tance Pro­gram pays for be­tween 50% and 95% of the cost of monthly pre­mi­ums to some par­tic­i­pants with low in­comes.

To­day, Ore­gon has 546 en­rollees in its plan. In its first three months, the state paid out about $500,000 in claims. Last sum­mer, the state pre­dicted it would have to go to a wait­ing list or cap by this spring be­cause of high de­mand. But the pro­gram can still take many more peo­ple. HHS gave Ore­gon $66 mil­lion to cover the three-year life of the pro­gram.

“In some ways it’s good that our pro­jec­tions are not com­ing true,” said Don Myron, pro­gram man­ager of the Ore­gon Med­i­cal In­surance Pool at the state Of­fice of Pri­vate Health Part­ner­ships. “This pro­longs the length of time we can ac­cept new peo­ple in.”

Ore­gon still an­tic­i­pates go­ing to a wait list at the be­gin­ning of 2013 and has no in­ten­tion of low­er­ing pre­mi­ums or chang­ing the pro­gram’s de­sign. “When you look at the pop­u­la­tions in the pools, they are very high users of health­care,” Myron said. “If you are go­ing to use the in­surance a lot, it makes sense to pay a higher pre­mium.”

Un­der fed­eral law, en­rollees must be U.S. cit­i­zens. This has also been a bar­rier to ap­pli­cants, Myron said, though Ore­gon also runs a state-funded high-risk in­surance pool that ac­cepts non-cit­i­zens.

Cal­i­for­nia is start­ing to see an up­turn in ap­pli­ca­tions. At the end of Jan­uary, 1,352 peo­ple were en­rolled in the pool. The state has had nearly 2,600 ap­pli­cants in the past year, in­clud­ing 551 in the past month, ac­cord­ing to the Cal­i­for­nia Man­aged Risk Med­i­cal In­surance Board, which ad­min­is­ters the pro­gram.

Still, Cal­i­for­nia es­ti­mated it could ac­cept up to 23,000 peo­ple into the pro­gram. The state is ex­plor­ing a low-in­come sub­sidy or pre­mium as­sis­tance, ac­cord­ing to a board spokes­woman.

Colorado, which has 493 en­rollees, has no im­me­di­ate plans to lower pre­mi­ums and raise de­ductibles, but that could change. “It’s a con­ver­sa­tion that’s been dis­cussed here as well as na­tion­ally,” said Jon Pushkin, spokesman for Get­tingUsCovered Colorado, the state’s pre­ex­ist­ing con­di­tion in­surance plan, op­er­ated by Rocky Moun­tain Health Plans.

Mean­while, HHS an­nounced fur­ther ini­tia­tives to ed­u­cate the unin­sured who might ben­e­fit, in­clud­ing an outreach ef­fort with the So­cial Se­cu­rity Ad­min­is­tra­tion. HHS has not yet re­leased claims data on the pro­gram.

Some states, in­clud­ing Ore­gon, Texas and Wash­ing­ton state, now re­quire in­surance com­pa­nies that deny peo­ple cov­er­age be­cause of pre-ex­ist­ing med­i­cal con­di­tions to in­form them about the fed­eral pro­gram. Wel­lPoint, Unit­edHealth Group, Hu­mana and sev­eral Blues plans have also agreed to in­clude this in­for­ma­tion in let­ters to de­nied ap­pli­cants.

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