States seek affordable health insurance solutions

Healthcare Financial Management, Dec, 2003

With the most recent U.S. Census numbers demonstrating an increase in the number of uninsured and latest reports showing health insurance premiums will increase at double-digit rates for the third consecutive year, state legislators continue to seek ways to make health insurance more accessible and affordable. This year, hundreds of bills were introduced addressing the uninsured.

Reaching Universal Coverage

Several states introduced legislation establishing a single-payer or an employer-based healthcare coverage system increasing access for individuals without health insurance. Maine and California enacted two significant pieces of legislation in 2003.

The Maine bill seeks to address three basic goals: to expand access to health care, control rising healthcare costs, and ensure healthcare quality. The bill provides health coverage for all Maine residents by implementing the state-sponsored Dirigo Health Insurance Program and expanding MaineCare, the state's Medicaid program. In a speech delivered at the signing ceremony, Governor Baldacci explained that Dirigo Health is a voluntary program for small employers that will offer comprehensive insurance policies and extensive disease management programs and that will subsidize, on a sliding scale, healthcare coverage for employees who cannot afford to pay the health insurance premiums. Coverage under Dirigo Health is scheduled to be available by Oct. 1, 2004.

In California, a "play or pay" employer based system was established with the enactment of the California Health Insurance Act of 2003. Signed by Governor Davis, the bill requires employers with 20 or more employees to pay into a purchasing pool if they do not provide healthcare coverage for their employees. Employers with 20 to 49 employees will not have to comply with the provisions of the act until a tax credit is enacted. Employers with fewer than 20 employees are exempt from participating in the program. The program will be funded through employer fees and enrollee contributions. The act also contains a provision requiring the Department of Health Services to implement a Medi-Cal premium assistance program, contingent upon federal financial participation.

Partnering with Medicaid

Many states are exploring ways to use two Medicaid initiatives: the Health Insurance Flexibility and Accountability (HIFA) demonstration waiver and the Health Insurance Payment Program (HIPP).

HIFA waiver. The HIFA waiver, a Section 1115 waiver, emphasizes initiatives that maximize private health insurance coverage targeted to Medicaid and SCHIP populations with incomes below 200 percent of the federal poverty level (FPL).

In April, Arkansas governor Mike Huckabee enacted legislation seeking approval to establish the Arkansas Safety-Net Benefit Program through a federal HIFA waiver. The voluntary program is designed to help increase access to health insurance for uninsured, employed individuals and their spouses.

Bills in Connecticut, Louisiana, and Texas were also enacted in 2003 authorizing the respective Medicaid agencies to apply for a HIFA waiver.

HIPP waiver. HIPP provides subsidies for Medicaid eligible individuals and their families who have access to employer-sponsored health-care coverage. This program allows states to spend Medicaid funds on health insurance premiums, coinsurance, and deductibles, as long as the coverage is cost-effective compared with "regular" Medicaid coverage.

NCSL research indicates the following states have implemented HIPP programs: California, Georgia, Iowa, Massachusetts, Missouri, Pennsylvania, Rhode Island, Texas, Virginia, and Wisconsin.

Other State Initiatives

Other notable state initiatives in 2003 have been enacted in Idaho, Iowa, and Louisiana.

Idaho. The Idaho Health Insurance Access Card Act promotes the availability of health insurance to adults, and their dependents, who work in small business and whose family gross income is under 185 percent of the FPL. The act has three components: the Children's Access Card Program, the Small Business Health Insurance Pilot Program, and the Idaho Health Insurance Access Card Program.

Iowa. Iowa's FY04 budget bill establishes a healthcare access partnership pilot project to enhance collaboration between individuals and agencies providing charity care under the medical assistance program for low-income and uninsured individuals. The two-year "partnerships" will be established in counties with a population of more than 250,000.

Louisiana. Participating employers in the Louisiana Safety Net Health Insurance Program must pay at least 50 percent of the eligible employee premium cost and enroll at least 50 percent of eligible employees in the program. Minimum benefit hospital and medical policies will be provided to:

* Employees of the state and political subdivisions who have not been covered by health insurance for at least one year and are eligible for coverage through the Office of Group Benefits

* Employers who have not offered group health insurance coverage to their employees for at least one year