In a time when states are facing large budget deficits and revenue shortfalls, many remain committed to health-care reform. That was one of the take-away messages from last week's 12^th annual meeting of health committee chairs, organized by NCSL's Forum for State Health Policy Leadership and sponsored by the Henry J. Kaiser Family Foundation in Washington, D.C.

Since 2006, some 18 states have expanded access to health coverage. But Kaiser's Jennifer Tolbert had some cautionary words. “As the economy has faltered, states have shifted focus away from broader coverage to significant cost-containment strategies,” she said. "[Access] is an area in which states are leading the way, but it needs to be a combined effort [between] states and the federal government to expand coverage more broadly."

State of the Bay State

Massachusetts is already reaping benefits from its groundbreaking effort (passed in 2006) to reach near-universal coverage, said Senator Richard Moore. The state's plan includes individual and employer mandates, subsidies for the low income, minimum standards for coverage and a "Commonwealth Health Connector" to link individuals to coverage.

“There are fewer lower-income individuals who reported medical debt and fewer people reporting they have trouble paying their bills,” Senator Moore said. “We’ve seen the uninsured rate for low-income people drop from 24 percent to 13 percent. The uninsured rate for higher-income people went from 5 percent to 3 percent.”

Recent reports indicate that nearly 99 percent of taxpayers complied with the law and had health insurance as of the end of 2007. Those who did not lost their personal tax exemption, worth about $219 per individual. Moore noted that the amount of the penalty for failing to obtain coverage will rise next year.

The popularity of the program is evident as recent surveys found more than three-fourths of Massachusetts residents support the plan, Senator Moore said. Lawmakers would like to reach the remaining 300,000 Massachusetts residents who have not yet obtained coverage.  But Moore stressed that his state needs to keep insurance affordable. And if the state fails to persuade the federal government to renew the 1115 Medicaid waiver that has made the expansion of coverage possible, the program could be in serious danger.

The Hoosier State

Giving participants a financial incentive to adopt healthy behaviors is central to Indiana's plan (HB 1678) to expand coverage to uninsured adults and parents or caregivers of children enrolled in the state's SCHIP. The Healthy Indiana Plan (HIP) is open to uninsured individuals who earn less than 200 percent of the federal poverty level.

Each HIP member will create a POWER account (for Personal Wellness and Responsibility), which will be similar to a health savings account. Valued at $1,100 per adult, the accounts will be funded by both the state (using funds from a $.44 per-pack tobacco tax increase) and the individual (based on ability to pay). Each participant also will purchase a basic commercial benefits package that will come into play if the person's annual medical costs exceed $1,100. "If the POWER account isn’t all used up, it can be rolled over to the next year’s account,” said Senator Gary Dillon. “To roll that money over, people have to participate in preventative care measures.”

Coverage for preventive services up to $500 a year will be available at no cost to participants. However, both insurance companies administering the program have opted to offer free unlimited preventive services to HIP members.

More than 53,000 applications have been received since HIP's creation six months ago, Senator Dillon said. Lawmakers are considering some changes, such as changing the deductible amount of $1,100. The thinking is that persons with chronic illnesses will likely utilize $1,100 very quickly and will have little incentive to be cost-conscious. For more information, go to http://www.hip.in.gov/

Providing the Gamut

Taking a market-based approach, Florida lawmakers, led by Governor Charlie Crist, are hoping to make affordable health coverage available to the uninsured.

“We’re facing a significant budget problem. There were cuts to the Medicaid program and the overall state budget,” said Clint Furhman, deputy secretary of the Florida Agency for Health Care Administration. “It’s a very difficult time and subsidizing insurance wasn’t going to be an option from a practical standpoint or a philosophical standpoint.”

Florida has the fourth highest rate of uninsured in the nation--3.8 million people, about 20 percent of the state’s population. The state spends more than a billion dollars annually on hospital payments alone for the uninsured, Furhman said.

So, the governor and state legislators called on private insurance companies to come up with a variety of plans to make coverage available to low-income people. “We decided to lift the mandates and they (the uninsured) can have the price points that they can meet,” Furhman said. “They (insurance companies) came up with plans that would be robust, but not providing everything you would find in traditional insurance plans.”

Those Floridians who choose to may now purchase “bare bones,” low-cost plans that must, however, provide coverage for inpatient hospital stays, ER visits, urgent care and outpatient services. The state also will negotiate with insurers to create at least two plans with $150 monthly premiums.

For more information on the Health Chairs meeting, log onto http://www.ncsl.org/programs/health/forum/chairs/index.htm.

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