THE HEALTH CARE JUSTICE ACT: WHERE HAVE WE BEEN AND WHERE ARE WE GOING?

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THE HEALTH CARE JUSTICE ACTWHERE HAVE WE
BEEN AND WHERE ARE WE GOING?

• A Presentation To The
• HEALTH CARE JUSTICE CAMPAIGN
• LEADERSHIP/ACTION FIELD STRATEGY TEAM
• Stephani Becker
• Health Disability Advocates
• Ph 312.223.9600
• sbecker_at_hdadvocates.org
• December 13, 2006

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Who is uninsured in IL?
Who are the Uninsured in Illinois?

• In 2005, 1.8 million IL residents under the age
  of 65 lacked health insurance 22 were children,
  ages 0-18 and 78 were adults, 19-64.
• With All Kids (enacted July 1, 2006), all
  children in IL now have access to affordable
  health insurance.
• Over 75 of the uninsured come from working
  families only 1 in 4 are from families that
  have no connection to the workforce. Forty-five
  percent of IL employers do NOT offer coverage to
  their employees.
• The poor and near poor have the greatest risk of
  being uninsured. Over 700,000 (about 50) of the
  1.4 million uninsured adults have incomes under
  200 FPL (19.6K for a single individual/ 40K
  for a family of 4) and two-thirds have incomes at
  or below 300 FPL (29.4K for a single
  individual/ 60K for a family of 4).

Sources Kaiser Commission on Medicaid and the
UninsuredThe Uninsured A Primer, October
2006 http//www.statehealthfacts.org 2001-2005
Annual Social and Economic Supplements to the
Current Population Survey (ASEC-CPS) and Navigant
Consulting Inc.s Employer Assessment Analysis,
10/31/06
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What is the Health Care Justice Act?

• Illinois Public Act 93-0973, formerly House Bill
  2268, created the Health Care Justice Act in
  2004.
• Main Purpose A vehicle to provide affordable,
  accessible, health care to all Illinoisans.
• Established the Adequate Health Care Task Force
  with 29 voting members. Monthly meetings since
  August 2005.
• Strongly encourages the State of Illinois to
  enact a health care access plan with key
  components.
• Public Hearings held in each Congressional
  District from October 2005 May 2006.

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Proposals Submitted to the Adequate Health Care
Task Force

• Five health care access strategy proposals were
  submitted to the Task Force in May 2006.
• In August 2006, the Task Force Consultant took
  high and moderate consensus items from these
  proposals and created a Hybrid Model
• On December 7, 2006, the Task Force voted 16 to 6
  to present the Hybrid Model to the IL General
  Assembly as its chosen health care access plan.

More govt control
More market-driven
Inclusion
Choice
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What are the Main Components of the Hybrid
Proposal?

• BENEFIT PACKAGE
• Maintain current SCHIP and Medicaid benefit
  packages.
• Comprehensive, standard benefit package
  (Comprehensive Standard Plan) will be available
  on a guaranteed issue basis to all individuals
  and small groups.
• Public coverage will be expanded to cover
  additional low-income parents (up to 200 FPL),
  childless adults with incomes below 100 FPL, and
  specific disabled populations.
• NEW MANDATES
• All Illinois residents including undocumented
  immigrants and college students must obtain
  qualified health insurance coverage or pay a
  penalty.
• Employers will be expected to contribute to
  health insurance coverage for their workers or
  pay a per worker assessment. Employers will
  receive a credit against this assessment if they
  provide coverage.
• Insurance carriers must file small group rates
  for State review and must show a minimum medical
  loss ratio of 85. Rates for each product may not
  vary by more than 130 of a carriers base rate.
  Also, insurers must limit annual rate increases
  for the Comprehensive Standard Plan.

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What are the Main Components of the Hybrid
Proposal? (continued)

• NEW INCENTIVES FOR LOW INCOME CONSUMERS, SMALL
  EMPLOYERS OF LOW WAGE WORKERS, PROVIDERS
  INSURERS
• State-funded premium subsidies will be available
  for residents below 400 FPL for employer-based
  coverage or -- if no employer coverage is
  available for the Comprehensive Standard Plan
  purchased in the individual market. The net
  premium paid for those under 400 FPL will be
  capped at 4 of family income in the group market
  and 6 of family income in the individual market.
  
• Small employers with a majority of low wage
  workers will be allowed to contribute as little
  as 50 percent of the cost of single coverage when
  offering the Comprehensive Standard Plan.
• Provider payments for current and future public
  programs will be increased to 100 percent of
  costs.
• State-run reinsurance program to reinsure
  guaranteed issue products in the small group and
  individual market.

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Additional Components of the Hybrid Model

• NEW ADMINISTRATIVE BODY
• The Illinois Health Education and Referral
  Center (IHERC) will be established as an
  enrollment broker and information clearinghouse
  on coverage options, premium costs, provider
  quality, and other consumer health information.
  IHERC will also monitor fraud and abuse.
• ADDITIONAL COMPONENTS
• Recommendations to implement Long-Term Care
  Partnerships in IL to encourage the purchase of
  long-term care coverage.
• Recommendations to build on two existing
  programs (the Illinois Medical Student
  Scholarship Program and the Rural Medical
  Illinois Assistance Program) to increase number
  of providers in underserved areas and encourage
  minority providers.

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How Will These Components Decrease the Number of
Uninsured in Illinois?

• Expand public coverage for low-income uninsured
  and those who cannot obtain affordable coverage
  on the private market (e.g., people with
  disabilities or chronic illnesses)
• Expand private group coverage by bolstering
  current employer-sponsored system and building
  new group insurance options.
• Subsidize the purchase of private and public
  health insurance

Total covered under hybrid proposal 98 of
non-elderly population Total newly covered under
hybrid proposal 1,521,000 (89 of uninsured)
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Four Key Decisions Left Open by Task Force

• Employer Assessment Policy
• How much will employers be assessed? What does it
  take to get a credit against that assessment?
• Who will provide the Comprehensive Standard Plan
  in the small group and nongroup market?
• Option A Insurance carriers
• Option B A state self-insured plan
• Task Force voted 15 6 to endorse Option A, but
  will keep B in the plan for the General
  Assemblys consideration.
• Subsidization of co-payments and deductibles for
  low income population
• Currently, this is not included in the plan, but
  it is acknowledged as a major barrier to care.

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4. How Will the State Pay for These Expansions?
Estimated Cost of to the State of Hybrid Model
with Option A
New enrollees in Medicaid/SCHIP 428 Million
New Enrollees Additional state funds (source to be determined) 2.781 Billion
Provider rate increase in existing public programs 410 Million
Total State Spending in 2007 3.619 Billion
Includes 1.5 billion in employer fees which
would be collected from firms with 25 or more
employees at 4.8 of payroll per firm. Includes
provider payment increase. Excludes
implementation costs.
IL State Budget (FY 07) 45.8 Billion
Source Navigant Consulting, Inc. and Mathematica
Policy Research, Inc. Revised Hybrid Model
Cost and Coverage Implications. December 7, 2006
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Health Care Justice Act Next Steps

• Jan. 18, 2007 Final Adequate Health Care Task
  Force meeting. Task Force will cast the final
  vote on the proposal to be presented to the
  General Assembly. Minority reports (single payer,
  insurance industry) will be included with
  proposal.
• January 2007 HCJC will meet to further define
  messages, legislative proposal and coalition
  partners.