SCI publications: Stateside newsletter / August 2004

In this Issue:

1. New Brief on Limited Benefit Plans
2. SCI Releases ERISA Preemption Update
3. SCI Grantee Highlight: Coverage Options for Health and
Human Service Workers
4. Oklahoma Ballot Initiative Will Determine Funding to Expand Coverage
5. Louisiana's PATH to Better Coverage
6. SCI Supports Covering Kids & Families
7. Children in Out-Of-Home Placement at Risk for Inadequate Coverage
8. New Resource on Health Outcomes
9. Health Policy in Washington: Learn How It's Made
10. Coming Soon from SCI
11. Reports of Interest

1. New Brief on Limited Benefit Plans

Policymakers' interest in limited-benefit policies has resurfaced, as health insurance premiums and the number of uninsured have continued to rise. At least 11 states have considered or enacted legislation allowing insurance carriers to sell limited-benefit plans to small groups (including four states in 2004). With a predominant focus on the enrollment experience of these plans in the public and private sector, this brief provides a window for policymakers to assess their value as a strategy to reduce the number of uninsured. To read this brief and other SCI written products, please visit the SCI Web site.

2. SCI Releases ERISA Preemption Update

SCI has released "ERISA Update: The Supreme Court Texas Decision and Other Recent Developments," one of a series of publications on the state health policy implications of the preemption clause of the federal Employee Retirement Income Security Act (ERISA) of 1974. The issue brief was written by Pat Butler, J.D., Dr. P.H., a noted health policy and ERISA expert, and is part of a continuing partnership with the National Association for State Health
Policy (NASHP).

ERISA's preemption clause is a broad provision stating that federal law preempts any state law relating to employee benefit packages or "ERISA plans." A lack of clarity within the legislation has given courts considerable leeway to interpret the Act, especially with regard to coverage-related issues.

The new brief analyzes the implications of the U.S. Supreme Court's June 2004 decision that ERISA preempts a Texas HMO liability law that authorized enrollees to sue their insurer for delayed or denied care. The decision overruled an earlier ruling by the Fifth Circuit Court of Appeals, which held that ERISA did not preempt the law. Similar laws in 11 other states, may be affected by the ruling.

The brief also explores how the interpretation of ERISA can affect several aspects of health care coverage, including:

States' ability to collect information from employers;
States' ability to enroll low-income individuals into employer-sponsored insurance through state premium-assistance programs;
Viability of employer "pay or play" initiatives;
State stop-loss regulation authority;
Legality of hospital and other rate-setting mechanisms and levying assessments on insurers; and
Taxing and regulating Multiple Employer Welfare Arrangements (MEWAs).

3. SCI Grantee Highlight: Massachusetts Examines Coverage Options for Health and Human Service Workers

In October 2002, SCI awarded the Massachusetts Division of Health Care Finance and Policy a planning grant to study options for providing coverage to workers in health and human service organizations, many of whom are contractors working for the state. As a result of the grant, which concluded earlier this year, the project team learned that this group tends to lack coverage because their wages are lower than average and thus they must contribute a higher percentage of their wages to employer-sponsored insurance than do other employees. The project underscored that, ironically, even individuals in the health field have difficulty accessing care.

The team's work helped to identify that solutions for these workers and other low-income employees like them would most likely require either a lower-cost health insurance product than those already on the market or subsidies toward the purchase of current packages. On the other hand, pooling these health and human service organizations would not likely be effective, because premiums for these employers are not necessarily higher than those of others.

The team decided to focus on health and human service workers after discovering that there is a gap in affordable coverage for this group-a finding revealed through research undertaken for Massachusetts' state planning grant from the Health Resources and Services Administration.

The SCI grant project's goals were to identify and define the target population through surveys and research, and to evaluate the feasibility of various approaches to providing affordable coverage. The state worked in collaboration with a broad group of stakeholders.

Some important findings from the grant team's employer survey include:

Nearly 95 percent of health and human service employers offer health insurance (compared with 68 percent of all state employers);
The median take-up rate for these employers was lower than the all-employer rate (65.4 percent vs. 84.5 percent, respectively);
Employees working for health and human service employers are required to contribute a slightly higher percentage toward individual and family premiums than all employees statewide.

The policy planning grant also helped fund three focus groups with health and human service workers, which found:

Many participants believed that premiums, co-payments, and deductibles for health insurance are too high and sometimes a barrier to purchasing coverage and receiving care. The participants seemed unwilling to give up many benefits or coverage in order to lower the cost, however.
Participants responded that taking preventive measures such as eating healthy and exercising will keep their individual health care costs down by reducing the need for health care utilization.
When presented with different options for designing a more affordable benefits package, it was difficult for groups to reach any consensus about which product was best.

4. Oklahoma Ballot Initiative Will Determine Funding to Expand Coverage

Oklahoma legislators have placed a proposal for a tobacco tax increase on the state ballot this fall. If passed, part of the funds generated through the increase would go toward a pilot program to provide incremental coverage to 100,000 uninsured working adults and their dependents. The program would allow individuals working for small businesses with less than 25 employees to access health insurance for their families. The state hopes to implement this program through a Medicaid HIFA waiver. This coverage model was developed in part as a result of Oklahoma's State Planning Grant through the Health Resources and Services Administration, which helped to crystallize the state-level issues related to the uninsured and engaged many stakeholders in the health sector.

5. Louisiana's PATH to Better Coverage

Louisiana Governor Kathleen Blanco (D) recently signed a bill that will allow the Partnership for Access to Healthcare (PATH), a division of the not-for-profit Louisiana Public Health Institute, to establish a pilot program intended to provide a lower cost alternative to traditional health insurance.

The program will allow access to primary care physicians and networks of specialists to employees of participating companies that do not currently offer health insurance. Employees will be responsible for paying a monthly fee that will be matched by employers; the fee will serve as an advance payment for the services rendered by participating health providers at prenegotiated reduced rates. PATH is also seeking outside grants to supplement the payments. The new law provides no funding for the program, but it exempts the plan from state insurance regulations or oversight by the state insurance commissioner.

PATH officials have planned for the program to resemble a traditional health insurance plan, with the exception that the program administrators will not pool or manage risk. Ultimately, the program will be open to any health care provider. However, the project managers plan to start by working with doctors and hospitals that provide health care to the uninsured.

This program is one of several state efforts designed to address the uninsured. Governor Blanco established the Governor's Health Care Reform Panel to help restructure and improve Louisiana's health care system. SCI Director Alice Burton is a member of the taskforce.

6. SCI Supports Covering Kids & Families

Covering Kids & Families, a national initiative of The Robert Wood Johnson Foundation to increase state and federal coverage among children and families, launched its annual "Back-to-School" campaign this week. Throughout August and September, Covering Kids & Families coalitions will host more than 1,000 events in all 50 states and Washington, D.C., to inform families about low-cost and free coverage programs for children. The campaign will also use public service announcements, media outreach, and corporate and organizational partnerships to spread the word.

SCI encourages people to learn more about the campaign by visiting www.coveringkidsandfamilies.org. The Covering Kids & Families Back-to-School Campaign Action Kit has all the tips and templates needed for any level of participation, ranging from setting up an enrollment event to writing a letter to the editor of a newspaper. Free materials are available for distribution to potentially eligible families, including fliers and posters urging them to call 1.877.KIDSNOW to find out if they are eligible.

7. Children in Out-of-Home Placement at Risk for Inadequate Coverage

Children who live in foster care or kinship care arrangements often lack adequate physical or mental health care, according to new findings from the University of Colorado's Stephen Berman, M.D., and Sara Carpenter, M.D. The research was highlighted in a recent findings brief published by The Robert Wood Johnson Foundation's Changes in Health Care Financing and Organization (HCFO) program.

The researchers used data from the National Survey of America's Families to examine the relationship between out-of-home placement and health insurance status and utilization of physical and mental health care services. They found that a lack of adequate health care among children in out-of-home placement was influenced by poverty, poor health status, the absence of health insurance, a low level of caregiver education, and disability.

"There is little information about health care utilization in this vulnerable population," says Berman. "Gaining a better understanding of these underserved groups is imperative so that policies can be developed to address their needs."

AcademyHealth is the national program office for HCFO.

8. New Resource on Health Outcomes

AcademyHealth has developed a core list of books, journals, Web sites, and bibliographic databases in the field of health outcomes. Developed under contract with the National Library of Medicine Health Outcomes Core Library Project, this project serves as a guide for individuals new to the field or those interested in developing a collection of resources in health outcomes.

9. Health Policy in Washington: Learn How It's Made

Attend AcademyHealth's "Health Policy and Politics: An Orientation to Decision-Making in Washington," October 25-28, for an in-depth introduction to the key players who shape our nation's health policy, formal and informal policymaking processes, and critical health policy issues. Register by October 1 to guarantee space.

10. Coming Soon from SCI

New Products

Check in with statecoverage.net for updates on SCI's latest publications. We have several issue briefs in the pipeline, including those focusing on:

The Role of Reinsurance in State Efforts to Expand Coverage (Deborah Chollet, Mathematica Policy Research);
Health Savings Accounts: Issues and Implementation Decisions for States (Mila Kofman, Georgetown University);
Lessons Learned from HRSA State Planning Grant Program (Issue Brief collaboration with SHADAC);
Profile in Coverage: Healthy New York (Q &A with Governor Pataki and Commissioner Serio; Jeremy Alberga, SCI Senior Manager); and
Communities in Charge: Lessons Learned (SCI collaboration with Terry Stoller, Project Director, Communities in Charge and Isabel Friedenzohn, SCI Associate).

Look for these products this fall.

Upcoming Meeting

SCI, in collaboration with Rutgers Center for State Health Policy, will host the "Invitational Summit for State Policymakers: Medicare Part D Implementation Issues." This meeting, which is for state Medicaid and pharmacy assistance program officials, will help states navigate the Medicare prescription drug benefit. It will be held on October 7 - 8, 2004, in Philadelphia, and is funded by The Robert Wood Johnson Foundation (through SCI and the Center
for Health Care Strategies), the federal Agency for Healthcare Research and Quality, and The Commonwealth Fund.

11. Reports of Interest

The following are the most recently released reports on coverage, most of which are additions to SCI's database of state reports.

Reaching the Goal: What's Needed to Cover All Americans
Alliance for Health Reform
July 2004

Consumer Protection Issues Raised by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
Henry J. Kaiser Family Foundation
July 2004

The Medicare Drug Discount Cards: One Month In
The Heritage Foundation
July 2004

Update on Florida SCHIP Enrollment
Henry J. Kaiser Family Foundation - Commission on Medicaid and the Uninsured
July 2004

Children's Medicaid and SCHIP in Texas: Tracking the Impact of Budget Cuts
Henry J. Kaiser Family Foundation - Commission on Medicaid and the Uninsured
July 2004

Economic Stress and the Safety Net: A Health Center Update
Henry J. Kaiser Family Foundation - Commission on Medicaid and the Uninsured
June 2004

Medicaid: Good Medicine for State Economies, 2004 Update
Families USA
May 2004

Maryland Children's Health Program: Assessment of the Impact of Premiums
Maryland Department of Health and Mental Hygiene
April 2004