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Cross-Border Health Care: The California Experience and the P ossibilities for Texas

Cross-Border Health Care: The California Experience and the P ossibilities for Texas. By Dr. David Warner, Rachel Maguire, Kelly Shanahan, & Kimberly Tucker LBJ School of Public Affairs, University of Texas at Austin. October 15, 2004. Presentation Overview. Agenda : California

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Cross-Border Health Care: The California Experience and the P ossibilities for Texas

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  1. Cross-Border Health Care: The California Experience and the Possibilities for Texas By Dr. David Warner, Rachel Maguire, Kelly Shanahan, & Kimberly Tucker LBJ School of Public Affairs, University of Texas at Austin October 15, 2004

  2. Presentation Overview Agenda: • California • History of cross-border healthcare • Current cross-border insurance plans • Lessons from California • Texas • Case Studies • El Paso/Juarez • Lower Rio Grande Valley • Dallas/Fort Worth • History of Cross-border Legislation • Future of Cross-border Health Insurance in Texas

  3. History of Cross-border Activities & Legislation in California PRIVATE INSURANCE PLANS SELF-FUNDED PLANS 1957 WGA Health Benefits 1972 WGA Mexico Panel added 1974 ERISA passed 1975 Knox-Keene Health Care Service Plan Act 1983 Amended to address MEWAs 1994 SB 1430 1996 HIPPA Provisions 1997 DOC issues Cease and Desist Orders 1998 SB 1658 2000 SIMNSA licensed, Access Baja launched 2001 Salud Con Health Net launched 2003 SB 798, Salud Mexico, Access Baja Dependent Plan 2004 SB 1347

  4. Current requirements for cross-border HMO products in California The product must: • Be licensed by California DMHC • Meet certain financial standards • Be sold to employers at group rates through brokers, agents and TPAs • Provide emergency and urgent care coverage in the U.S.

  5. Basic Plan Definitions • Single Network – doctor network available only on one side of the border. • Dual Network – doctor networks available on both sides of the border. • Self-funded Plans – employer-sponsored, federally-regulated plans. These are ERISA plans that are not subject to the same strict regulation as private insurance plans. • Latino-oriented Plans – insurance products specifically designed for and marketed to the Hispanic population in the U.S.

  6. California: Current Cross-border Plans • Private Insurance Companies • Single Network: • SIMNSA, S.A. • Blue Shield - Access Baja • Health Net - Salud Mexico • Dual Network: • Health Net - Salud Con Health Net • Blue Shield – Access Baja Dependent Plan • Latino-oriented Plans: • Pacificare • Health Net • Employer-Sponsored Plans (ERISA) • Dual Network: • Western Growers Association

  7. Single Networks Plans: • Sistemas Medicos Nacionales, S.A. de C.V. (SIMNSA) (2000) • Blue Shield - Access Baja (2000) • Health Net – Salud Mexico (2003)

  8. Single Network Plan Model • HMO, PPO plans • Area Network – Doctor/Hospital Networks in Mexico • Out-of-Area Network: Emergency and Urgent Care only Plan Members • Members must reside within 50 miles of the border • Focus is on Mexicans and Mexican Americans • Approximately 50% live in California and 50% live in Mexico

  9. Single Network • Employer industries include: • Service (Hotels/Restaurants) • Textiles • Landscape • Agriculture • Construction • Quality Control • Certification: Mexican Government, California Department of Managed Care • Audits • Grievance Process • Legal Recourse

  10. Single Networks: Plan Comparisons SIMNSA • Mexican-owned company (Legally allowed to advertise and sell employer-sponsored plans in US) • 12,300 members (4000 subscribers) • 90% 1st Generation Mexicans • Coverage Area: San Diego, Tijuana/Imperial Valley, Mexicali • Less expensive than Access Baja Health Net – Salud Mexico • US company, contracts with SIMNSA network Blue Shield – Access Baja • US company, contracts with General de Seguros, S.A. • 2000 members (subscribers and dependents) • 50 employers • Coverage Area: San Diego, Tijuana/Imperial Valley, Mexicali • 2 Different plans offered (Gold Plan & Silver Plan)

  11. Dual Networks Dual Network – doctor networks available on both sides of the border. Plans: • Salud con Health Net • Blue Shield – Access Baja Dependent Plan

  12. Dual Networks Salud Con Health Net Plan Model Combines Health Net Providers in California with SIMNSA providers in Mexico 20,000 members • Primarily 1st Generation Mexicans 2 Product Lines: • Full Network • Adds Mexican Provider Group to Offering • Narrow Network • Adds Mexican Provider Group to Offering • Provides “narrow” network in Los Angeles • Lower cost health plan option Plan is 30-40% less expensive than Kaiser

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

  14. PacifiCare Latino • Founded: in 2002 - Latino Health Solutions Initiative • Membership: 585,000 Latino members in the USA • over 500 companies have bought the Latino product • Services: • Offers the same products that PacifiCare does • 1-800 number in Spanish • Web based solutions in Spanish • Emphasis on education and information • Does not offer Cross-Border services • Offered in 8 states: CA, AZ, TX, OK, CO, WA, OR, and NV

  15. Health Net Targets Latino Population (including low-income) through various outreach programs, community involvement • La Opinion Combines government-sponsored programs with private insurance products to cover families • MediCal/Healthy Families Accepts Mexican Matricula Consular card as Identification

  16. Self-funded Plans (ERISA) Self-funded Plans – employer-sponsored, federally-regulated plans. These are ERISA plans that are not subject to the same strict regulation as private insurance plans. Plans • Western Growers Association (Dual Network)

  17. Western Growers Association • Plan Background • Founded: 1926 as a trade association • Membership: 3000 regular and associate members in CA and AZ fresh produce industry • Services: Many different services, including health care coverage. • Health Benefits: • 1957 - Creation of Western Growers Assurance Trust • (Not-for-profit, self-funded, and self-governed) • 1972 - Cross-border option (aka Mexican Panel) started

  18. Western Growers Association Plan Model • Tailor-made for company’s needs • For care in US, work with: • Blue Cross of California • Blue Cross Blue Shield of Arizona • Pinnacle Claims Management, Inc. (3rd party administrator) • Blue Cross Life & Health, Vision Services Plan, RESTAT Pharmacy • 250 full-time customer service employees • Most seasonal workers are on “Harvest Series” plan (100% employer contribution)

  19. Western Growers Association Mexican Panel Optional “Rider” attached to plan 95,000 subscribers (employees + dependents) have rider Physicians/Facilities: • 23 PCP contracts • 16 PCP subcontracts • 90 specialty care physicians • 10 hospitals (ER and surgical services) • 15 dental clinics Location of Services on the Border: • Tijuana • Mexicali • Palaco • Los Algodones • San Luis • Agua Prieta

  20. Western Growers Association • Mexican Panel • Required Coverage: • No “required” services • WGA determines what services are available in Mexico • 95% of the demand for services can be met by Mexican Panel • Cost = $29-35 • Plan Membership • 110,000 of member employees and their families • 2002 = $90,000-100,000 paid in claims for Harvest Series plans - care received in US • 2002 = 30,000 Mexico claims

  21. Latino Oriented Plans PacifiCare HealthNet • No cross-border services • Aimed at Latino population Dual Network Plans Western Growers Salud con HealthNet Access Baja Dependent plan • Services provided in both countries • Larger target market Single Network Plans (Mexico) Access Baja SIMNSA Salud Mexico (HealthNet) • 50-mile radius from border • Small target market Provider Network Model

  22. Future of Cross-border Plans • Growth in individual plans • Target small and mid-size businesses • Expansion of dependent coverage into the interior of Mexico • Rent network to other Blue/U.S. Carriers in other states • Expansion of self-funded cross-border plans

  23. Lessons from California • Small market niche • Inexpensive • Culturally sensitive healthcare • Education necessary to teach value of health insurance

  24. Texas Case Studies: • El Paso/Ciudad Juarez • Lower Rio Grande Valley • Dallas/Fort Worth

  25. El Paso/Juarez • Latino Population = 81% are Hispanic (2002 – El Paso County) • 25% born in Mexico (2002) • 76% of those age 5+ speak Spanish in the home (2002) • Ciudad Juarez – 1.42 million (2004) • Combined with El Paso County – 2.14 million (2004) • Uninsured = 33% • Least insured major city of the U.S. • Uncompensated care • Thomason General Hospital - $103 million (41% of total gross patient revenue) • Thomason + 9 private hospitals - $217 million

  26. El Paso/Juarez • Employment Sectors • Service • Call centers/back office operations • Health care • Business support • Wholesale/retail trade • Government • Manufacturing • Employer-sponsored health insurance (non-elderly pop) • El Paso = 49% • Nationwide average in large urban areas = 67% • Many large employers have ERISA plans • school districts

  27. El Paso/Juarez • Border crossings (north from Juarez to El Paso - 2003) • In general • 30,278 buses • 14,486,294 cars • 8,939,791 pedestrians • Work-related • 44,651 daily (2002 average) • Current Cross-border Activities • Medical Care Referral Group • Provider networks in Ciudad Juarez (ISES) • Plan Seguro • Mapfre Tepeyac • Seguros Inbursa • Medical facilities in Ciudad Juarez • Centro Médico de Especialidades • Poliplaza Médica • FEMAP/SADEC - Hospital de la Familia

  28. Lower Rio Grande Valley • Cameron and Hidalgo Counties specifically • Latino Population = 88% of population (total pop = 958,144) • Uninsured rate = 32-33% (1999) • Mexican Cities on Border = Matamoros, Reynosa • Industries: • Agriculture • Trade, Transportation, & Utilities • Government, Education, & Health Services • Manufacturing • Hospitality Industry • Current Cross-border Activities: • Difficult to gauge • Hidalgo Independent School District • Interest in Western Growers plans • Medical facilities, provider networks in Mexico • Facilities identified in Matamoros, Reynosa, and Nuevo Progreso

  29. Dallas/Fort Worth • Latino Population = 22% of DFW pop (Latino pop = 1,120,350) • 79% is Mexican-origin • Uninsured rate = 37% (325,000 Mexican-origin) • Industries: • Construction • Manufacturing • Hospitality Industry • Education, Health & Social Services • Professional Services • Current Latino-Oriented Healthcare Options: • Limited Latino-oriented private insurance • Discount cards • Private clinics • Medical facilities • Parkland (Dallas), John Peter Smith (Ft Worth) • Community Health Centers (Los Barrios Unidos) • Private Practices

  30. Legislative History of Cross-border in Texas • May 2001 - Texas Cross Border Health Care Act (SB 1826) • Coverage in Mexico for Mexican citizens and residents • Died in Committee! • Legal Obstacles to Cross-border Coverage • Definition of “provider” in a health plan • June 2003 - Texas Consumer Choice of Benefits Health Insurance Plan Act (SB 541)

  31. The Future of Cross-border Health Insurance in Texas Potential Plans There is flexibility in… • Who a plan is designed to target • Plan structure and who offers it

  32. The Future of Cross-border Health Insurance in Texas Potential Target Groups • Individuals who live in Mexico, work in US • Individuals who live in US, dependents are in Mexico • Spanish-speaking, low-income families in US

  33. The Future of Cross-border Health Insurance in Texas Potential Plan Structures • HMOs • PPOs • Self-funded Plans (ERISA) • Consumer Driven Plans • Consumer Choice Plans • Health Savings Accounts

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