Spring Institute December 3, 2009

1. Spring InstituteDecember 3, 2009 Annie Lee, JD Policy Analyst Colorado Department of Health Care Policy and Financing

2. HCPF: Who We Are • Administers Medicaid, CHP+ (Child Health Plan Plus, Colorado’s Children’s Health Insurance Program, otherwise known as CHIP) and related public insurance programs that involve State/Federal partnerships. • Covers over 500,000 Coloradans. Approximately 80% of Medicaid and CHP+ members are children. • Responsible for leading public health care policy and reform efforts.

3. Insurance History • The basic state of medical technology in the late 1800s equaled a low medical expenditure rate. • The chief cost associated with illness was not the cost of medical care, but lost wages due to sickness (State of Illinois, Report of the Health Insurance Commission, 1919). • As a result, the focus wasn’t on health insurance but “sickness” insurance- similar to today’s “disability” insurance to provide income replacement in the event of illness. • Today we have MRIs, deep brain stimulators, pace makers and in-utero surgery. In conjunction with technology advances, our health care cost have dramatically increased.

4. Insurance History • Blue Cross • Founded in 1929 by a group of Dallas teachers who contracted with Baylor University Hospital to provide 21 days of hospitalization for a fixed $6.00 monthly payment. This was revolutionary and pre-paid hospital service plans become popular. • Blue Shield • Similarly, in 1939 the California Physicians Services started a prepayment plan designed to cover physician services.

5. Insurance History • The next important notch in the timeline is WWII. During WWII wage and price controls prevented employers from using wages to compete for scarce labor. • In 1949, the National Labor Relations Board ruled in a dispute between the Inland Steel Company and the United Steelworkers Union that the term “wages” included pension and insurance benefits. • This ruling was upheld by the Supreme Court and further reinforced the employment-based system.

6. Employer Sponsored Insurance Health insurance coverage provided through an employer. ESI can be solely paid for by an employer or provided with cost-sharing between the employer and employee.

7. Insurance History • The Medicare and Medicaid programs were created in 1965. Medicare provides health care coverage for Americans 65 and older, and Medicaid helps those with very low income and people with disabilities. • The State Children’s Health Insurance Program (SCHIP), established in 1997, extended health insurance coverage to children in families that earn too much to qualify for Medicaid, but too little to afford private insurance.

8. Publicly Funded Health Care Health care that is paid for by the government. It is financed entirely or primarily by taxes--instead of private payments to for-profit insurance companies (i.e. insurance premiums), or directly to health care providers (including co-payments and deductibles).

9. Who We Cover

10. Colorado Indigent Care Program (CICP) • Safety net program for un/underinsured who do not qualify for Medicaid or CHP+. • Not a health insurance program • Qualified providers reimbursed for a portion of their costs. • Applicants are given a “CICP rating” based on their total income and resources.

11. What We Cover • Medicaid and CHP+ include benefits such as: • Physician visits • Prescription drugs • Labs and X-rays • Emergency Services • In/outpatient Hospital Services • Dental for children • …and many more

12. Individually Purchased Insurance Health insurance products available for purchase by individuals without the involvement of an employer sponsor. Unlike group insurance, insurers in Colorado can deny individual coverage based on an individual’s health status.

13. Another Payer for Vulnerable Populations • State High Risk Pools • A state-established, subsidized health insurance program designed to provide coverage to individuals who have been excluded from the individual insurance market because of a pre-existing medical condition and who are not eligible for public coverage. • In Colorado, the high-risk pool, CoverColorado, provides subsidies to certain low-income individuals, although premiums are generally set at 100-150 percent of prevailing rates in the nine geographic rating regions of the state.

14. Coloradans by Average Monthly Primary Source of Health Insurance

15. Federal and State Partnerships Federal Legislation Centers for Medicare and Medicaid Services (CMS) States

16. Activity: What would your health plan look like? • Inpatient (procedures that require in-hospital stays) - $5 • Outpatient (procedures that allow for same day release) - $3 • Prenatal care - $5 • Dental - $3 • Vision - $2 • Pharmacy - $2 • Durable Medical Equipment - $3 • Mental Health - $3 • Alternative Therapies (includes nontraditional treatments like massage and acupuncture) - $3 Your budget: $15

17. System of Payers

18. Medicaid Enrollees and Expenditures by Enrollment Group, FY 2007-08

19. FY 2008-09 Colorado State Operating Budget: $18.6 Billion 20.2% Health Care Policy and Financing

20. HCPF and Legislation in 2009 • HB 09-1293 • Expands coverage to additional populations. • CHIPRA 2009 • Offers options for expanding coverage. • Led to HB 09-1053, which authorizes HCPF to waive the 5-year waiting period imposed on immigrants.

21. States Covering Legal Immigrant Children with State Funds WA NH VT MT ME ND OR MN MA ID WI SD NY WY MI RI CT IA PA NV NE NJ OH IL UT IN DE CO CA WV KS VA MD MO KY NC DC TN AZ OK NM AR SC MS AL GA TX LA AK FL HI States Covering Legal Immigrant Children Not Eligible for Federal Funds (17 states, including DC)

22. HCPF Initiatives • Health outcomes • Cost containment • Access

23. HCPF’s Reform Vision Stakeholder Collaboration Supportive Payment System Health Outcome Evaluation Appropriately Defined Benefits Accountable Care Coordination Enhanced Enrollment Structure Transformed Public Insurance Programs Optimal Client Health and Function

24. Health vs. Health Care • Overall health is achieved through a combination of physical, mental, emotional, and social well-being. • Health care is the science and art of promoting health through the services offered by the medical, nursing, and allied health professions.

25. Broadening the Focus: A Conceptual Framework for Addressing Disparities Economic & SocialOpportunities and Resources Living & Working Conditionsin Homes and Communities Medical Care PersonalBehavior HEALTH Robert Wood Johnson Foundation Commission to Build a Healthier America www.commissiononhealth.org

26. Health Outcomes • Colorado is the thinnest state in country--but low income children have 3 times the obesity rate as higher income children. • Smoking rates double state average for adults with Medicaid. • Nursing home bed days trending down and less expensive community services trending up. • Medicaid inpatient hospital costs stable, but ER and outpatient trending up.

27. Demographics of Colorado’s Children • 1/3 of Colorado’s children live in low income households (less than 200% of FPL). • 2/3 of low income children are in a racial or ethnic minority families. • Over 1/3 of the children are from cultures other than those of their providers. • Racial and ethnic minorities are the most rapidly growing group of children in Colorado. • Low income children and minority children have greater difficulty accessing health care and have poorer health outcomes than other groups of children. Source: Demographics of Colorado’s Children www.cchap.org

28. Health care and Health Initiatives Upcoming activities to: • Reduce readmission rates • Reduce emergency room rates • Reduce preventable hospitalizations Anticipate activities related to achieving: • Lower child and adolescent obesity • Lower adult tobacco use • Fewer suicide attempts

29. Eligible But Not Enrolled Populations

32. Barriers to Provider Participation • Poor reimbursement; • Difficulties with eligibility and enrollment; • Problems with claims processing; • Need for social service support for the families; • Poor access to, and coordination of, mental health services; • Need for better case management and care coordination; • Trouble getting children in for regular preventive care, including immunizations; • Transportation problems in low-income families; • Need to learn more about culturally sensitive and responsive care; • Difficulty in obtaining and affording interpreters for healthcare visits. Source: www.cchap.org

33. How does this apply to practice? • Private insurers tend to follow lead of Medicare and Medicaid on payment methodologies and performance incentives - both influence medical practice. • Patients’ health insurance status in constant flux: move between and within uninsured, public insurance, self-insured, employer sponsored insurance. • Department comprises over 20% of state’s operating budget and insures nearly 10% of state’s population making it a significant player in Colorado health care community. • Need sufficient provider capacity to serve new and existing clients.

34. Where to Find More Information • Medicaid: Colorado.gov/hcpf Customer service: (800) 221-3943 or in Denver Metro: (303) 866-3513 • CHP+: CHPplus.org Customer Service: (800) 359-1991

35. My Contact Information Annie Lee annie.lee@state.co.us 303.866.3663