MAINE’S EXPERIENCE IN EXPANDING COVERAGE

The Commonwealth Fund’s State Innovations Program

Changes in Health Care Financing and Organization (HCFO)--a national program of the Robert Wood Johnson Foundation

February 1, 2008Trish Riley, Director

Governor’s Office of Health Policy and FinanceState of Maine

SETTING THE CONTEXT

● 2002 – 2003- “All Quiet on the Western Front”- No common discussion of cost

crises (e.g.: TODAY)- Commonwealth Fund Commission

on A High Performance Health System- McKinsey & Co. – “Accounting for

the Cost of Health Care in U.S.”

1

THE CONTEXT FOR REFORM

THE U.S SPENDS MORE; GETS LESS

Need a more effective & efficient health system & healthier people

2

Scores: Dimensions of a High Performance Health System

69

71

67

51

71

66

0 100

Long, Healthy, &Productive Lives

Quality

Access

Efficiency

Equity

OVERALL SCORE

SOURCE: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

3

…but Maine & the US Spend More Per Person Than Other Industrialized

Nations

Sources: Anderson GF, Frogner BK, Johns RA,, Reinhardt UE Health Care Spending And Use Of Information Technology In OECD Countries. Health Affairs 25(3), 820, for data on US and OECD nations. Maine figure estimated using data from the CMS Office of the Actuary. * UK amount is for 2002.

114

KEY FACTSNew England states spend more than

the US average.2004 Per Capita Health Care Spending

Source: CMS 5

DIRIGO HEALTH REFORM

System Reform – Not just an insurance

product• Improve Quality• Lower Cost Growth• Invest in Access Expansion

6

Need multiple strategies to cover uninsured and underinsured

Maine’s Uninsured> 300 % FPL 39,000 100-300% FPL 57,500< 100% FPL 29,000

Underinsured2004-2006 Sales of “most popular” product in individual market -- $15,000 deductible – rose

29% 7

Dirigo Health

DIRIGO CHOICEDIRIGO CHOICE

MAINECAREMAINECARE

COST CONTAIMENT/ IMPROVE PUBLIC HEALTH/ MAINE QUALITY FORUM

8

Assure affordability for those in the market & uninsured > 300% FPL

< 300% FPL- Sliding scale subsidies

Low income – fully subsidized

3-Tiered Strategy

MAINE’S EXPERIENCE IN EXPANDING COVERAGE

The Commonwealth Fund’s State Innovations Program

Changes in Health Care Financing and Organization (HCFO)--a national program of the Robert Wood Johnson Foundation

February 1, 2008Karynlee Harrington, Executive Director

Dirigo Health Agency

DRAFT

Total Members Served, DC + Parents 28152

New DC Members (un/subidized) 93 (76/17)

HCTC Members 82

Total Enrolled DC Members 14405

New DC Small Groups 6

Total Enrolled DC Small Groups 713

Total Enrolled Parents 5,545

New Parents 0

CY 2007 Member / Employee Share of coverage cost $33,069,002.39 (46%)

CY 2007 Dirigo Share of coverage cost (subsidy) $39,475,325.93 (54%)

CY 2007 total coverage cost $72,544,328.32 (100%)

Annual Member Months 172,350 (106% to projected)

Annual Subsidy PMPM $229.04 (97% to projected)

Percentage DC Members un/underinsured 60.6%

Members by Employer TypeA

B

C

DE

F

A

BC

D

E

F

B

C

DE F

Indi

vidu

als

49%

Sm

all

Gro

up 2

3%

Sol

e P

rops

28%

A

Individual

Small Group

Sole PropIndividual

Small Group

Sole Prop

Individual

Small Group

Sole Prop

Individual

Small Group

Sole Prop

Individual

Small Group

Sole Prop

B 5

1%

C 1

5%

D 1

0%

E 4

%F

18

%

Members by Discount Level

Dirigo Health Monthly Numbers December 2007Dirigo Health Agency 01/08/2008

Notes:

1. Total Members Served refers to the total number of members ever enrolled (beginning 01/01/2005) for any period of time in the DirigoChoice or MaineCare Parent Expansion programs2, Total New Members refers to the number of new members enrolled in the reporting month .3. Total Enrolled Members refers to the number of members currently enrolled in the reporting month .4. Annual subsidy PMPM is the average “per member per month” annual cost for the Agency in 2007.5. Un/underinsured % is through June, 2007. The Agency defines underinsured as having a deductible exceeding 5% of income where household income is under 200% of FPL. 9

LESSON 1

● Hard to make the case for cost crisis in 2003 ● Public understood “hidden tax of bad debt and

charity care” from un and underinsured

● Compromise weakened cost containment

Rejected

● Global budget for hospitals

● Assessment on insurers not passed onto payers 10

FINANCING / SUSTAINABILITY

• One time State funding• Medicaid• SOP → Capture savings & reinvest

- Hard to measure- Savings vs. cost avoidance

- Conflict – same funding source advocates for HRP

• 4 Year effort to stop SOP• Blue Ribbon Commission• Alternate funding included “pay or play” plan

& individual mandate plus reinsurance – rejected by Legislature

11

WHAT HAS DIRIGO HEALTH REFORM ACHIEVED TO DATE• Enrolled over 23,000 participants and over 725 Small Businesses

in Dirigo Choice and over 5,000 Parents in MaineCare.• Strengthened the CON Process. • Strengthened Hospital Cooperation Act. • Required providers to submit claims electronically in a uniform

fashion.• Regulated premiums in the Small Group Market for the first time.• Hospitals, doctors and insurance companies now share their

financial information in new ways allowing for greater transparency, helping to inform the public on how health care dollars are spent.

• Introduced the State Health Plan, with a goal of making Maine the healthiest state and established new public health infrastructure.

• Documented over $111M in system savings.• Established Maine Quality Forum.

12

LESSONS LEARNED / NEXT STEPS

● Enactment is the easy part● “Keep your friends close & your enemies closer”● System reform ala High Performing Health System – must

remain the focus● Voluntary approach required given high cost of health

insurance in Maine; mandates rejected – all eyes on MA & VT

● Next Steps- Individual market reform / sustainable Dirigo financing- Non-profit partner – Harvard Pilgrim Health Care- Annual Cost Driver Study and recommendations to

Legislature

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