Cross-Border Health Care: Cross-Border Health Care: The California ExperienceThe California Experience and the Possibilities for ossibilities for

TexasTexasByBy

Dr. David Warner,Dr. David Warner,

Rachel Maguire, Kelly Shanahan, & Kimberly Rachel Maguire, Kelly Shanahan, & Kimberly TuckerTucker

LBJ School of Public Affairs, University of Texas at LBJ School of Public Affairs, University of Texas at AustinAustin

October 15, 2004October 15, 2004

Presentation OverviewPresentation Overview

AgendaAgenda:: CaliforniaCalifornia

– History of cross-border healthcareHistory of cross-border healthcare– Current cross-border insurance plansCurrent cross-border insurance plans– Lessons from CaliforniaLessons from California

TexasTexas– Case StudiesCase Studies

El Paso/JuarezEl Paso/Juarez Lower Rio Grande ValleyLower Rio Grande Valley Dallas/Fort WorthDallas/Fort Worth

– History of Cross-border LegislationHistory of Cross-border Legislation– Future of Cross-border Health Insurance in Future of Cross-border Health Insurance in

TexasTexas

PRIVATE INSURANCE PLANSPRIVATE INSURANCE PLANS SELF- SELF-FUNDED PLANSFUNDED PLANS

19571957 WGA Health BenefitsWGA Health Benefits19721972 WGA Mexico Panel WGA Mexico Panel

addedadded19741974 ERISA passedERISA passed1975 1975 Knox-Keene Health Care Service Plan ActKnox-Keene Health Care Service Plan Act19831983 Amended to address Amended to address

MEWAsMEWAs19941994 SB 1430SB 143019961996 HIPPA ProvisionsHIPPA Provisions1997 1997 DOC issues Cease and Desist OrdersDOC issues Cease and Desist Orders1998 SB 1998 SB 165816582000 2000 SIMNSA licensed, Access Baja launchedSIMNSA licensed, Access Baja launched2001 2001 Salud Con Health Net launchedSalud Con Health Net launched2003 2003 SB 798, Salud Mexico, Access BajaSB 798, Salud Mexico, Access Baja

Dependent PlanDependent Plan2004 2004 SB 1347SB 1347

History of Cross-border Activities History of Cross-border Activities & Legislation in California& Legislation in California

Current requirements for cross-Current requirements for cross-border HMO products in border HMO products in

CaliforniaCaliforniaThe product must:The product must:

Be licensed by California DMHCBe licensed by California DMHC Meet certain financial standardsMeet certain financial standards Be sold to employers at group rates Be sold to employers at group rates

through brokers, agents and TPAsthrough brokers, agents and TPAs Provide emergency and urgent care Provide emergency and urgent care

coverage in the U.S.coverage in the U.S.

Basic Plan DefinitionsBasic Plan Definitions Single Network Single Network – doctor network available only on one – doctor network available only on one

side of the border.side of the border.

Dual Network Dual Network – doctor networks available on both sides – doctor networks available on both sides of the border.of the border.

Self-funded Plans Self-funded Plans – employer-sponsored, federally-– employer-sponsored, federally-regulated plans. These are ERISA plans that are not regulated plans. These are ERISA plans that are not subject to the same strict regulation as private subject to the same strict regulation as private insurance plans.insurance plans.

Latino-oriented Plans Latino-oriented Plans – insurance products specifically – insurance products specifically designed for and marketed to the Hispanic population in designed for and marketed to the Hispanic population in the U.S. the U.S.

California: Current Cross-border California: Current Cross-border PlansPlans

Private Insurance CompaniesPrivate Insurance Companies– Single NetworkSingle Network: :

SIMNSA, S.A.SIMNSA, S.A. Blue Shield - Access BajaBlue Shield - Access Baja Health Net - Salud MexicoHealth Net - Salud Mexico

– Dual NetworkDual Network: : Health Net - Salud Con Health NetHealth Net - Salud Con Health Net Blue Shield – Access Baja Dependent PlanBlue Shield – Access Baja Dependent Plan

– Latino-oriented PlansLatino-oriented Plans: : PacificarePacificare Health NetHealth Net

Employer-Sponsored Plans (ERISA)Employer-Sponsored Plans (ERISA)– Dual NetworkDual Network::

Western Growers AssociationWestern Growers Association

Single NetworksSingle Networks

Plans:Plans: Sistemas Medicos Nacionales, S.A. de Sistemas Medicos Nacionales, S.A. de

C.V. (SIMNSA) (2000)C.V. (SIMNSA) (2000) Blue Shield - Access Baja (2000)Blue Shield - Access Baja (2000) Health Net – Salud Mexico (2003)Health Net – Salud Mexico (2003)

Plan ModelPlan Model

HMO, PPO plansHMO, PPO plans Area Network – Doctor/Hospital Networks in Mexico Area Network – Doctor/Hospital Networks in Mexico Out-of-Area Network: Emergency and Urgent Care Out-of-Area Network: Emergency and Urgent Care

onlyonly

Plan MembersPlan Members

Members must reside within 50 miles of the borderMembers must reside within 50 miles of the border Focus is on Mexicans and Mexican AmericansFocus is on Mexicans and Mexican Americans Approximately 50% live in California and 50% live Approximately 50% live in California and 50% live

in Mexicoin Mexico

Single NetworkSingle Network

Single NetworkSingle Network

Employer industries includeEmployer industries include::

Service (Hotels/Restaurants)Service (Hotels/Restaurants) TextilesTextiles LandscapeLandscape AgricultureAgriculture ConstructionConstruction

Quality ControlQuality Control

Certification: Mexican Government, California Certification: Mexican Government, California Department of Managed CareDepartment of Managed Care AuditsAudits Grievance ProcessGrievance Process Legal RecourseLegal Recourse

Single Networks: Plan Single Networks: Plan ComparisonsComparisons

SIMNSASIMNSA Mexican-owned company (Legally allowed to advertise and sell Mexican-owned company (Legally allowed to advertise and sell

employer-sponsored plans in US)employer-sponsored plans in US) 12,300 members (4000 subscribers)12,300 members (4000 subscribers) 90% 1st Generation Mexicans90% 1st Generation Mexicans Coverage Area: San Diego, Tijuana/Imperial Valley, MexicaliCoverage Area: San Diego, Tijuana/Imperial Valley, Mexicali Less expensive than Access BajaLess expensive than Access Baja

Health Net – Salud MexicoHealth Net – Salud Mexico US company, contracts with SIMNSA networkUS company, contracts with SIMNSA network

Blue Shield – Access Baja US company, contracts with General de Seguros, S.A. 2000 members (subscribers and dependents)2000 members (subscribers and dependents)

– 50 employers50 employers Coverage Area: San Diego, Tijuana/Imperial Valley, MexicaliCoverage Area: San Diego, Tijuana/Imperial Valley, Mexicali 2 Different plans offered (Gold Plan & Silver Plan)2 Different plans offered (Gold Plan & Silver Plan)

Dual NetworksDual Networks

Dual Network Dual Network – doctor networks available on – doctor networks available on both sides of the border.both sides of the border.

PlansPlans:: Salud con Health NetSalud con Health Net Blue Shield – Access Baja Dependent PlanBlue Shield – Access Baja Dependent Plan

Dual NetworksDual NetworksSalud Con Health NetSalud Con Health Net

Plan ModelPlan ModelCombines Health Net Providers in California with SIMNSA Combines Health Net Providers in California with SIMNSA

providers in Mexicoproviders in Mexico

20,000 members 20,000 members – Primarily 1st Generation MexicansPrimarily 1st Generation Mexicans

2 Product Lines:2 Product Lines:– Full NetworkFull Network

Adds Mexican Provider Group to OfferingAdds Mexican Provider Group to Offering– Narrow NetworkNarrow Network

Adds Mexican Provider Group to OfferingAdds Mexican Provider Group to Offering Provides “narrow” network in Los AngelesProvides “narrow” network in Los Angeles Lower cost health plan optionLower cost health plan option

Plan is 30-40% less expensive than KaiserPlan is 30-40% less expensive than Kaiser

Latino-oriented PlansLatino-oriented Plans

Latino-oriented Plans Latino-oriented Plans – insurance – insurance products specifically designed for products specifically designed for and marketed to the Hispanic and marketed to the Hispanic population in the U.S. population in the U.S.

PlansPlans PacificarePacificare Health NetHealth Net

PacifiCare Latino

Founded: in 2002 - Latino Health Solutions Initiative

MembershipMembership: 585,000 Latino members in the USA: 585,000 Latino members in the USA

over 500 companies have bought the over 500 companies have bought the Latino productLatino product

ServicesServices::• Offers the same products that PacifiCare doesOffers the same products that PacifiCare does• 1-800 number in Spanish1-800 number in Spanish• Web based solutions in SpanishWeb based solutions in Spanish• Emphasis on education and informationEmphasis on education and information• Does not offer Cross-Border servicesDoes not offer Cross-Border services• Offered in 8 states: CA, AZ, TX, OK, CO, WA, OR, and NV

Health NetHealth Net

Targets Latino Population (including low-Targets Latino Population (including low-income) through various outreach income) through various outreach programs, community involvementprograms, community involvement

La OpinionLa Opinion

Combines government-sponsored programs Combines government-sponsored programs with private insurance products to cover with private insurance products to cover familiesfamilies

MediCal/Healthy FamiliesMediCal/Healthy Families

Accepts Mexican Matricula Consular card as Accepts Mexican Matricula Consular card as IdentificationIdentification

Self-funded Plans (ERISA)Self-funded Plans (ERISA)

Self-funded Plans Self-funded Plans – employer-sponsored, – employer-sponsored, federally-regulated plans. These are federally-regulated plans. These are ERISA plans that are not subject to the ERISA plans that are not subject to the same strict regulation as private insurance same strict regulation as private insurance plans.plans.

PlansPlans Western Growers Association (Dual Western Growers Association (Dual

Network)Network)

Western Growers Association

Plan Background

Founded: 1926 as a trade association

MembershipMembership: 3000 regular and associate members in CA : 3000 regular and associate members in CA and AZ fresh produce industryand AZ fresh produce industry

ServicesServices: Many different services, including health care : Many different services, including health care coverage.coverage.

Health BenefitsHealth Benefits: :

1957 - Creation of Western Growers Assurance Trust1957 - Creation of Western Growers Assurance Trust(Not-for-profit, self-funded, and self-(Not-for-profit, self-funded, and self-

governed)governed)

1972 - Cross-border option (aka Mexican Panel) 1972 - Cross-border option (aka Mexican Panel) startedstarted

Plan ModelPlan Model

Tailor-made for company’s needsTailor-made for company’s needs

For care in US, work with:For care in US, work with:• Blue Cross of CaliforniaBlue Cross of California• Blue Cross Blue Shield of ArizonaBlue Cross Blue Shield of Arizona• Pinnacle Claims Management, Inc. (3Pinnacle Claims Management, Inc. (3rdrd party party

administrator)administrator)• Blue Cross Life & Health, Vision Services Plan, RESTAT Blue Cross Life & Health, Vision Services Plan, RESTAT

PharmacyPharmacy

250 full-time customer service employees250 full-time customer service employees

Most seasonal workers are on “Harvest Series” plan (100% Most seasonal workers are on “Harvest Series” plan (100% employer contribution)employer contribution)

Western Growers Association

Mexican PanelMexican Panel

Optional “Rider” attached to planOptional “Rider” attached to plan

95,000 subscribers (employees + dependents) have rider95,000 subscribers (employees + dependents) have rider

Physicians/Facilities:Physicians/Facilities:• 23 PCP contracts23 PCP contracts

• 16 PCP subcontracts16 PCP subcontracts• 90 specialty care physicians90 specialty care physicians• 10 hospitals (ER and surgical services)10 hospitals (ER and surgical services)• 15 dental clinics15 dental clinics

Location of Services on the BorderLocation of Services on the Border::• TijuanaTijuana• MexicaliMexicali• PalacoPalaco• Los AlgodonesLos Algodones• San LuisSan Luis• Agua PrietaAgua Prieta

Western Growers Association

Mexican PanelMexican Panel

Required CoverageRequired Coverage:: No “required” servicesNo “required” services WGA determines what services are available in MexicoWGA determines what services are available in Mexico 95% of the demand for services can be met by Mexican 95% of the demand for services can be met by Mexican PanelPanel

Cost = $29-35Cost = $29-35

Plan MembershipPlan Membership

110,000 of member employees and their families110,000 of member employees and their families

2002 = $90,000-100,000 paid in claims for Harvest Series plans - 2002 = $90,000-100,000 paid in claims for Harvest Series plans - care received in UScare received in US2002 = 30,000 Mexico claims2002 = 30,000 Mexico claims

Western Growers Association

Single Network Plans (Mexico)

Dual Network Plans

Latino Oriented Plans

Access Baja

SIMNSA

Salud Mexico (HealthNet)

50-mile radius from border

Small target market

Western Growers

Salud con HealthNet

Access Baja Dependent plan

PacifiCare

HealthNet

Services provided in both countries

Larger target market

No cross-border services

Aimed at Latino population

Provider Network ModelProvider Network Model

Future of Cross-border PlansFuture of Cross-border Plans

Growth in individual plansGrowth in individual plans Target small and mid-size businessesTarget small and mid-size businesses Expansion of dependent coverage into the Expansion of dependent coverage into the

interior of Mexicointerior of Mexico Rent network to other Blue/U.S. Carriers in Rent network to other Blue/U.S. Carriers in

other statesother states Expansion of self-funded cross-border Expansion of self-funded cross-border

plansplans

Lessons from CaliforniaLessons from California

Small market nicheSmall market niche InexpensiveInexpensive Culturally sensitive healthcareCulturally sensitive healthcare Education necessary to teach value Education necessary to teach value

of health insuranceof health insurance

TexasTexas

Case Studies:Case Studies: El Paso/Ciudad JuarezEl Paso/Ciudad Juarez Lower Rio Grande ValleyLower Rio Grande Valley Dallas/Fort WorthDallas/Fort Worth

El Paso/JuarezEl Paso/Juarez Latino Population = 81% are Hispanic (2002 – El Latino Population = 81% are Hispanic (2002 – El

Paso County) Paso County) – 25% born in Mexico (2002)25% born in Mexico (2002)– 76% of those age 5+ speak Spanish in the home (2002)76% of those age 5+ speak Spanish in the home (2002)

Ciudad Juarez – 1.42 million (2004)Ciudad Juarez – 1.42 million (2004)– Combined with El Paso County – 2.14 million (2004)Combined with El Paso County – 2.14 million (2004)

Uninsured = 33%Uninsured = 33%– Least insured major city of the U.S.Least insured major city of the U.S.

Uncompensated careUncompensated care– Thomason General Hospital - $103 million (41% of total Thomason General Hospital - $103 million (41% of total

gross patient revenue)gross patient revenue)– Thomason + 9 private hospitals - $217 millionThomason + 9 private hospitals - $217 million

Employment SectorsEmployment Sectors– Service Service

Call centers/back office operationsCall centers/back office operations Health careHealth care Business supportBusiness support

– Wholesale/retail tradeWholesale/retail trade– GovernmentGovernment– ManufacturingManufacturing

Employer-sponsored health insurance (non-Employer-sponsored health insurance (non-elderly pop)elderly pop)– El Paso = 49%El Paso = 49%– Nationwide average in large urban areas = 67%Nationwide average in large urban areas = 67%

Many large employers have ERISA plans Many large employers have ERISA plans – school districtsschool districts

El Paso/JuarezEl Paso/Juarez

Border crossings (north from Juarez to El Paso - Border crossings (north from Juarez to El Paso - 2003)2003)– In generalIn general

30,278 buses30,278 buses 14,486,294 cars14,486,294 cars 8,939,791 pedestrians8,939,791 pedestrians

– Work-relatedWork-related 44,651 daily (2002 average)44,651 daily (2002 average)

Current Cross-border ActivitiesCurrent Cross-border Activities– Medical Care Referral GroupMedical Care Referral Group

Provider networks in Ciudad Juarez (ISES)Provider networks in Ciudad Juarez (ISES)– Plan SeguroPlan Seguro– Mapfre TepeyacMapfre Tepeyac– Seguros InbursaSeguros Inbursa

Medical facilities in Ciudad JuarezMedical facilities in Ciudad Juarez– Centro Médico de EspecialidadesCentro Médico de Especialidades– Poliplaza MédicaPoliplaza Médica– FEMAP/SADEC - Hospital de la FamiliaFEMAP/SADEC - Hospital de la Familia

El Paso/JuarezEl Paso/Juarez

Lower Rio Grande ValleyLower Rio Grande Valley Cameron and Hidalgo Counties specificallyCameron and Hidalgo Counties specifically Latino Population = 88% of population (total pop = Latino Population = 88% of population (total pop =

958,144)958,144) Uninsured rate = 32-33% (1999)Uninsured rate = 32-33% (1999) Mexican Cities on Border = Matamoros, ReynosaMexican Cities on Border = Matamoros, Reynosa Industries: Industries:

– AgricultureAgriculture– Trade, Transportation, & UtilitiesTrade, Transportation, & Utilities– Government, Education, & Health ServicesGovernment, Education, & Health Services– ManufacturingManufacturing– Hospitality IndustryHospitality Industry

Current Cross-border Activities: Current Cross-border Activities: – Difficult to gaugeDifficult to gauge– Hidalgo Independent School DistrictHidalgo Independent School District– Interest in Western Growers plansInterest in Western Growers plans

Medical facilities, provider networks in MexicoMedical facilities, provider networks in Mexico– Facilities identified in Matamoros, Reynosa, and Nuevo Facilities identified in Matamoros, Reynosa, and Nuevo

ProgresoProgreso

Dallas/Fort WorthDallas/Fort Worth Latino Population = 22% of DFW pop (Latino pop = 1,120,350)Latino Population = 22% of DFW pop (Latino pop = 1,120,350)

– 79% is Mexican-origin79% is Mexican-origin– Uninsured rate = 37% (325,000 Mexican-origin)Uninsured rate = 37% (325,000 Mexican-origin)

Industries: Industries: – ConstructionConstruction– ManufacturingManufacturing– Hospitality IndustryHospitality Industry– Education, Health & Social ServicesEducation, Health & Social Services– Professional ServicesProfessional Services

Current Latino-Oriented Healthcare Options: Current Latino-Oriented Healthcare Options: – Limited Latino-oriented private insurance Limited Latino-oriented private insurance – Discount cards Discount cards – Private clinicsPrivate clinics

Medical facilitiesMedical facilities– Parkland (Dallas), John Peter Smith (Ft Worth)Parkland (Dallas), John Peter Smith (Ft Worth)– Community Health Centers (Los Barrios Unidos)Community Health Centers (Los Barrios Unidos)– Private PracticesPrivate Practices

Legislative History of Cross-Legislative History of Cross-border in Texasborder in Texas

May 2001 - Texas Cross Border Health Care May 2001 - Texas Cross Border Health Care Act (SB 1826)Act (SB 1826)– Coverage in Mexico for Mexican citizens and Coverage in Mexico for Mexican citizens and

residentsresidents– Died in Committee!Died in Committee!

Legal Obstacles to Cross-border Coverage Legal Obstacles to Cross-border Coverage – Definition of “provider” in a health planDefinition of “provider” in a health plan

June 2003 - Texas Consumer Choice of June 2003 - Texas Consumer Choice of Benefits Health Insurance Plan Act (SB 541)Benefits Health Insurance Plan Act (SB 541)

The Future of Cross-border The Future of Cross-border Health Insurance in TexasHealth Insurance in Texas

Potential PlansPotential Plans

There is flexibility in…There is flexibility in…

1.1. Who a plan is designed to targetWho a plan is designed to target

2.2. Plan structure and who offers itPlan structure and who offers it

The Future of Cross-border The Future of Cross-border Health Insurance in TexasHealth Insurance in Texas

Potential Target GroupsPotential Target Groups

1.1. Individuals who live in Mexico, work in USIndividuals who live in Mexico, work in US

2.2. Individuals who live in US, dependents Individuals who live in US, dependents are in Mexicoare in Mexico

3.3. Spanish-speaking, low-income families in Spanish-speaking, low-income families in USUS

Potential Plan StructuresPotential Plan Structures HMOs HMOs PPOsPPOs Self-funded Plans (ERISA)Self-funded Plans (ERISA) Consumer Driven PlansConsumer Driven Plans

– Consumer Choice PlansConsumer Choice Plans– Health Savings AccountsHealth Savings Accounts

The Future of Cross-border The Future of Cross-border Health Insurance in TexasHealth Insurance in Texas