The Users' Guide to the Health Reform Galaxy

Health Reformer's Lexicon: High-Risk Pools

The Health Reformer's Lexicon is a weekly feature that will examine key words, terms and phrases in health reform and explore their meaning and orbit.

The term: High-risk pools

High-risk pools are private, self-funded health insurance plans that serve high-risk individuals with costly pre-existing medical conditions such as cancer or HIV/AIDS.

Why It Matters: As the National Association of Health Underwriters explains, most Americans get their health insurance in group-purchasing arrangements—typically through their employers or the employers of family members—but some people do not have access to this type of coverage and need to buy their own insurance independently.

Unlike in the group health insurance market, however, insurers in most states traditionally have been allowed to deny coverage to individuals with serious pre-existing conditions. That’s because when you buy insurance individually, you’re essentially a “group of one.” The health insurance company has to determine how likely it is to take in more premium dollars from you than it pays back in benefits—and if it appears that the odds are you will get sick, then it is in the insurance company’s financial interest to avoid taking on the risk you represent.

(There have also been widely commented-upon incidents in which insurance companies have found reasons to rescind people’s coverage after they get sick.)

For this reason, many states offer some form of risk pool that individuals can buy into.

Roots: High-risk pools were first implemented in Minnesota and Connecticut in 1976, according to the Kaiser Foundation, and now operate in 34 states, providing insurance to nearly 200,000 people.

Where the Term Appears: The recently passed health reform law established a national high-risk pool program to insure individuals with pre-existing conditions from now until 2014, when the law’s broader provisions for expanding access to coverage begin to kick in. Getting this temporary program up and running is one of the first things that HHS Secretary Kathleen Sebelius has been tackling. She recently sent a letter to governors and state insurance commissioners asking whether they are interested in creating high-risk pools. Some states have responded that they need more time to decide.
 
Previous Lexicon entries include:
- Individual Mandate
- Uncompensated Care
- Value-Based Purchasing

The economic squeeze on the American middle class

Brian C. Quinn a senior program officer at the Robert Wood Johnson Foundation and Lynn A. Blewett, Director of the State Health Access Data Assistance Center (SHADAC) write about Cover the Uninsured Week.

The inner researcher(s) in us don’t generally get excited about spending days working on national awareness campaigns. But for the last eight years, Cover the Uninsured Week has provided an exciting opportunity for RWJF and SHADAC to explore interesting trends in health insurance coverage. This year, with families across the country struggling through the second recession in the last decade, it seemed natural for us to look into how those economic downturns have affected health insurance coverage.

The resulting report – Barely Hanging On: Middle-Class and Uninsured –released today, chronicles coverage trends in all 50 states from 2000 to 2008.  The findings? The first decade of this century has been marked by declines in employer-sponsored insurance coverage, greater costs to employers and employees for individual and family health insurance policies and significant erosion in private coverage.   Coupled with this we find significant declines in median incomes across the US.  This raises increasing concerns for the affordability of coverage for the middle class and a continued increase in the numbers of uninsured in nearly every state.

One finding that hits home for millions of people: America’s middle-class is bearing the brunt of these trends. Middle-income earners – families making roughly $45,000 to $85,000 a year – became uninsured at a pace faster than those who made more money, as well as those with lower incomes. In total, 13 million middle-income earners were uninsured in 2008 – about 2.4 million more than in 2000.

As the cost of health insurance premiums rose by 56 percent for family coverage (adjusted for inflation), many employers stopped offering health insurance coverage, shifted the increase in costs to employees in terms of higher premiums or changed the criteria for employees’ eligibility. By 2008, more than one in five people who work in firms that offer health insurance weren’t eligible for the benefit. For those employers who still paid the bulk of their employees’ insurance premiums, rising costs have been passed on to workers, likely causing some workers to drop their work sponsored coverage. In all, 21 percent of employees who worked for firms that offered employer-sponsored insurance (ESI) in 2008 did not accept or “take up” the offer.  Among the middle class, just 66 percent now receive insurance through their employer, a drop of seven percentage points since 2000.  

ESI has long been the mainstay of health coverage for middle-class families, who typically do not qualify for government insurance programs. Among middle-income Americans, only about half of the decline in employer-sponsored coverage from 2000 to 2008 was offset by increased enrollment in government insurance programs. For people who earned less money, declines in ESI were even steeper, but those numbers were almost completely offset by increases in coverage through government insurance programs like Medicaid and SCHIP. The result is that it’s the middle class that is going without.

America’s middle class is being squeezed to the point that they are barely hanging on. Overall, the average cost an employee paid for a family insurance policy rose significantly by 81 percent from 2000 to 2008, while median household income fell significantly by 2.5 percent (adjusted for inflation). Clearly, hard-working families are at the brink.

We are concerned about the erosion of ESI and the continued growth in health care coverage costs.  In this economic crisis, we know that business owners can’t afford to shoulder more of the burden of health care costs.  Yet, at the same time, state are facing unprecedented budget shortfalls and are not able to meet the need of  laid-off workers and the members of the once-middle class who are now uninsured.   If nothing is done to stave off these trends, it could spell doom for our nation’s middle class, our health care system, and ultimately the future of our economic recovery.

During this 8th Cover the Uninsured Week, people across the nation will hold events and have discussions about what to do about this national crisis. We’ve certainly done our part to build awareness. Now it’s up to the people to take action.

Road Closed, Danger Ahead!

RWJF President and CEO Risa Lavizzo-Mourey writes on America's uninsured.  This post first appeared on The Huffington Post today.  

For decades, our health care system has been barreling down a dangerous road, plowing through stop signs and ignoring obvious warning signs – Higher Health Costs Approaching; 46 Million Uninsured Merging; Employer-Sponsored Coverage Closed Ahead.

Today, as part of the ninth annual Cover the Uninsured Week, the Robert Wood Johnson Foundation released a new report that warns of the dangers still ahead of us – and our health care system – if we don’t change direction. The analysis, conducted by researchers at the Urban Institute, shows that without significant reform to the current health care system the number of uninsured Americans could grow by 10 million people in just five years.  Spending on government health care programs for the poor will balloon, more than doubling by 2020. For employers who continue to offer health insurance benefits, an increasing amount of the costs would come out of workers’ pockets. At the same time, individuals and families would face higher out-of-pocket costs for premiums and health care services.

The report also finds that unless we change our health system so that it expands coverage to those who don’t have it, and makes coverage more affordable for those who do, middle-income families will be hardest hit. The uninsured rate for middle-class families earning roughly $40,000-$75,000 a year – could rise up to 28 percent.  That means one in four middle-income workers could be uninsured in 10 years. Uninsured rates will also rise among adults, age 45-64 and in 10 short years nearly a quarter of these middle aged adults could be uninsured.

This tells me, Warning: Danger Ahead. While we might not have an actual bright yellow sign signaling what comes next, we do have a map.  By examining the best available economic data, we can project what will happen to our health care system on its current trajectory—the number of uninsured Americans will continue to soar, and the increases in public and private spending will be dramatic and unsustainable.

For almost four decades, the Robert Wood Johnson Foundation has been making certain that the forces of health-system change remained fueled and driving forward. But the signs on this road are clear.  Unless action is taken to change the trajectory, our nation is on a collision course.

Health reform could hurt minority groups if not done right

Bruce Siegel, director of the Robert Wood Johnson Foundation’s Aligning Forces for Quality initiative and the RWJF legacy program, Expecting Success: Excellence in Cardiac Care, writes that equity should be an important component of health reform.

Health care reform could actually hurt minority groups unless Congress makes some fixes. Without an explicit focus on equity, reform could leave millions of these Americans behind.

The goal of the reform bills in the House and Senate is to dramatically expand access to coverage, including for minority groups, which are traditionally under-insured. But the bills also envision measuring doctors’ and hospitals’ results and paying them based on how well they perform. And while that is a laudable goal, it could also hurt minority groups if not done right. If, for instance, we start measuring and penalizing hospitals depending on how many patients need to be admitted again, hospitals could have incentives to turn away the poorest and sickest patients; who tend to also be people of color. And safety net hospitals that underperform, already overburdened and underfunded, would be further deprived of resources.

The issue looms large given that racial and ethnic minority groups will be in the majority in the U.S by 2050. They already account for half the uninsured, are poorer in health, suffer more disease and are more likely to get inferior care. There are also equity implications in the transformation taking place in provider reimbursement as the notion gains ground that we need to systematically and rigorously examine how well our doctors and hospitals perform and pay them accordingly.  Especially important, in the interest of attaining quality care for all patients, is measuring how well the system treats minority groups.

The secrets of Massachusetts' success (including bigger carrots and smaller sticks)

Robert Restuccia, Executive Director of Community Catalyst, writes about the less-talked-about lessons from Massachusetts-style health reform.

Massachusetts as model – it’s a common claim in health policy circles. With the lowest rate of uninsured residents in the nation – just 2.7 percent – it’s clear to those watching that Massachusetts’s mix of Medicaid expansions, sliding scale subsidies, private insurance reforms and individual mandate are working to expand coverage and have served as the template for national reform. 

But there are other, less obvious lessons from the Massachusetts experience that have not really filtered into the political and policy discourse in Washington.  Here are a few of the most important.

There are good policy and political reasons for putting coverage expansions ahead of cost containment

Massachusetts made the strategic decision to tackle health coverage before cost containment – making it easier to keep all players at the table.  Despite bold words to the contrary at the start of the process, the Congressional leadership and the Obama Administration too are finding it hard to arrive at a consensus on significant cost containment while still keeping the industry backers of coverage expansion at the table.  But Massachusetts is using the pressure from the cost of its coverage expansion to jump-start a more serious debate about cost containment than ever before.

Faster is better

The current health reform is not the first time Massachusetts attempted to enact a near-universal coverage program.  In the late 1980s under Governor and soon-to-be Presidential candidate Michael Dukakis, Massachusetts enacted a major health reform proposal with an employer “pay or play” as its central element along with a number of other smaller programs.  Today those smaller programs, implemented almost immediately after reform passed, are still going strong, while the employer pay or play, which was not scheduled to go into effect for several years after passage, was first delayed and then repealed as the political and economic environment shifted.

What Congress Can Do To Boost Health Care Quality

Margaret E. O’Kane, president of the National Committee for Quality Assurance (NCQA), an independent, non-profit organization whose mission is to improve the quality of health care, writes about NCQA’s new report, The State of Health Care Quality 2009. You can also read an interview with O’Kane here.

Just as the health care reform process is speeding up, NCQA has found that progress on important measures of health care quality has slowed down. After 12 years of steady and often remarkable progress in performance, the report we released today documented relatively little improvement in most areas of care during the past year by the nation’s health plans. These findings underscore why provisions to improve quality must be part of any health reform package.

Because reform will most certainly bring more individuals into Medicare and Medicaid programs, it was especially disconcerting to see that for the third year in a row, we found that performance of health plans serving these public programs failed to improve on key quality measures. In fact, Medicare Advantage plans made statistically significant improvements on only five of 36 measures (14 percent). The results for Medicaid plans were somewhat better, but still there was a statistically significant gain on only 18 of 50 measures (36 percent), and most of these were small. Results in the commercial plan sector were slightly better, with improvement on 22 of 51 measures (43 percent).