# Presentation: 900011

##  State and Local Efforts to Close the Gaps Between Public and Private Insurance Coverage

**Vickie S. Gates**
*Vice President*
*Academy for Health Services Research *
*and Health Policy*
*Director*
*The Robert Wood Johnson Foundation’s*
*State Coverage Initiatives Program*

**Notes:**
Vickie Gates’ slides for the presentation “State and Local Efforts to Close the Gaps Between Public and Private Insurance Coverage.” 

Vickie Gates is Director of the Robert Wood Johnson Foundation’s State Coverage Initiatives Program and a Vice President of the Academy of Health Services Research and Health Policy. 

## Current State Environment

- Reduced revenues
- Expenditures over budget
- Rising Medicaid caseloads
- Rising health care costs
- Maintenance, low and no cost options
- November elections (36 Governors)

**Notes:**
States are currently finding themselves in a very challenging environment in which to address the issue of the uninsured. As of February, 45 States failed to meet their revenue projections and 28 States have serious expenditure problems, which in many cases is Medicaid. At the same time, States and private employers are facing rising health care costs. 

In addition to economic uncertainty, many States are also struggling with political uncertainty.  There are 36 governors who are up for elections and States are struggling right now to deal with redistricting.  

But despite all the challenges, the State Coverage Initiatives (SCI) program has still been observing a lot of activity and innovation among States trying to address the problem of the uninsured. 

## State Options to Expand Health Care Coverage

- Public programs, including new Medicaid options
- Public-private partnerships
- Market based reforms/strategies

**Notes:**
State are looking at a lot of the same options they have looked at in the past.  States are reviewing the public programs, like Medicaid, that have always made the most difference in covering the uninsured.  The interest in public-private partnership and how to create a good linkage with employer-based insurance is still a major State issue.  States are also going back to an area that they really felt successful in the early ‘90’s - insurance reforms. They are seeing more concentrated markets and there are States now who are rethinking reforms that they implemented during the ‘90’s and looking for ways to guarantee a competitive marketplace.  

## Public Program Options

- Medicaid 1931
- SCHIP
- 1115 Demonstration Waivers
- SCHIP
- Medicaid
- HIFA
- State-only

**Notes:**
While the main options available to States for expanding or reforming their Medicaid programs are HIFA and Section 1115 waivers, there are other options available as well. States have been able to make insurance more available to working parents who have been transitioning to jobs through Welfare Reform 1931 options. 

SCHIP is the first time the Federal government gave States the flexibility to create new options, which has led to many successful State programs and a “culture of change” in States. SCHIP encouraged marketing and outreach of programs in new ways. 

Waivers are an important area now, particularly with States trying to figure out whether the waivers give them more flexibility to create better partnerships with employers.  States are looking for sustainable Medicaid programs. 

In spite of the tough economic times some States are looking to State-only programs.  States have typically done this to serve populations that didn’t fit or that they couldn’t create a waiver program for. An example would be the Basic Health Plan in Washington State.  

## Closing the Gap Between Public and Private

- High risk pools
- Programs to improve employer offer rates
- Premium subsidies for employees
- Full cost buy-ins and pools

**Notes:**
States are really trying to leverage private funding in order to help close the gaps between private and public insurance coverage. States are looking at high-risk pools for the medically uninsurable, and improving the employer offer rate through tax credits and direct subsidies to employers. States have also looked at premium subsidies and full cost buy-ins and pools. 

## Major Obstacles to Expansion

- Funding and fear of commitment
- Benefit design, cost sharing for existing and expansion populations
- Increasing costs
- Provider support and participation
- Administrative complexity, low participation ESI (HIFA may help)

**Notes:**
There are many issues and challenges that States face when they are considering whether to implement changes or support new programs. States are concerned about committing to a program when the future of that program may be uncertain. States are looking at benefit design, and talking about cost-sharing and eliminating benefits, but those are complicated issues. They are facing rising healthcare costs, decreasing support and participation from providers, and the administrative complexity of many programs make them difficult to operate and encourage enrollment. 

## State Research Needs 

- What is affordable coverage?
- Understanding employer decisions
- Crowd-out
- Uncompensated care and the safety net
- Link between health insurance and health status

**Notes:**
There is a lot of research out there that States are using now, but they are doing what always happens when you talk about research - finding and asking more questions. States are struggling with defining “affordable coverage” and trying to understand what really motivates employers. They want to know more about crowd-out and the relationship between the public and private markets. States are also beginning to want more information about the relationship between uncompensated care, the safety net and insurance options. And finally, policymakers and researchers alike would all like to see more research about the real links between healthcare coverage and insurance status. 

## Insights and Lessons 

- No silver bullet; multiple strategies
- Shifting resources between populations is extremely difficult
- “Right” benefit design and cost sharing are research _and_ political issues
- Uninsured still stereotyped; lack political leverage
- Importance of partnerships, collaboration

**Notes:**
Although the current economic environment has made it challenging for States to address the issue of the uninsured, there are already some general insights and lessons learned from States’ early experiences in this environment. Many States have learned that there is no sliver bullet to solving the issue of the uninsured - any truly effective solution will in fact require multiple strategies. States are also learning the political difficulty of attempting to shift resources between populations, and that despite all the research into the uninsured, they are as a group still stereotyped, but nonetheless are a group that lacks political leverage. One final lesson is that collaboration, with the Federal government, providers, constituency groups, employers, etc. is essential, and the most effective programs for the most part have been on the community level. 

## Contacting SCI

- State Coverage Initiatives
- c/o Academy for Health Services Research and Health Policy
- 1801 K Street, NW Suite 701-L
- Washington, DC 20006
- SCI@ahsrhp.org
- www.statecoverage.net

**Notes:**
The State Coverage Initiatives program has a very active website that has a lot of information about the programs SCI runs but also about what States are doing about coverage and includes a lot of State-specific information. 

## States and Communities

- The “ready” community, the community with special needs, the pilot
- Community as a health insurance pool
- Demonstrated success in improving health outcomes at lower cost
- Ability to reach employers, uninsured, medical community; bring resources together

**Notes:**
There is more and more interest from States in working with communities, partly because projects like Muskegon that have been so successful.  There are many local projects that have been able to bring resources into the equation, but they have been able to bring providers together in the community and get them to operate in a totally different environment than is often the case with a large Medicaid program.  The results have been great. There have been some really excellent health status results coming out of community projects.  It has made States want to re-think the role of communities.  

States have continuously raised two issues. One is being able to move into the ready community.  The community that has the energy, sees the problem, has some resources, wants to try and do something and not having to try and make that work for the State as a whole.  They also have raised the issue of communities that have very specialized problems

When it comes to reaching difficult groups like employers, there is no substitute for word of mouth. If you are able to create an effective partnership with the community, it is the same thing that States did in some regards with SCHIP. Its an infrastructure that reaches out into the community.

## HIFA: Plus and Minus

- Benefit and cost sharing flexibility
- Ability to use SCHIP allotments to meet budget neutrality
- Responsive, simpler waiver process
- Mixed State reaction to ESI option
- Concerns on budget neutrality

**Notes:**
States are excited about the benefit and cost sharing flexibility of HIFA.   If they have it, they are also excited about the ability to use their SCHIP allotments.  The issue is that not every State has it.  Some of the States have been so active in SCHIP programs that they are fully spent and they don’t have this available. Some of the States are mixed on their reaction to an employer-sponsored option.  

Most of the negative issues or the concerns have come up around budget neutrality and how difficult budget neutrality is in the long-range cost trend issues that are part of healthcare, how well HIFA actually is going to adapt to those issues, and will it have some of the flexibility that has been part of other waiver programs.