Last Wednesday (Jul. 30), the summer working group heard presentations on four models for health care coverage, three for members of a specific workforce and one for employees of small businesses. It also heard an argument for tailoring a health care plan to address obstacles encountered by all low-wage workers, not just one particular workforce. Coverage models The first model concerned the Maine State Chamber Purchasing Alliance. As explained by Dana Connors, the president of Maine’s State Chamber of Commerce, the principal features of the model include: It is available to small businesses with 2-50 employees It creates seven different plans for employers to offer It received a Bureau of Insurance (BOI) waiver to reduce required employee participation rate from 75% to 60% A wellness discount of 2% of premiums is available to businesses whose employees participate in special health programs This set-up is apparently useful for some 480 Maine businesses insuring some 3200 folks, but its rates are similar to “community rating” rates available in the general market, so it doesn’t help much with affordability. Mollie Baldwin, the CEO of Home Care for Maine, also noted that this kind of system does nothing for larger employers and their workers. The second model presented was that of the Maine Bar Association. Here, a group of businesses has pulled themselves together to form a risk pool. Because these lawyers felt they were likely to be healthier than the general community, they sought to make use of BOI rules allowing them to be rated separately from the community rating system. For a while, this brought down premium costs. However, when several employees became severely ill and ran up high costs, insurers significantly boosted the association’s premium costs at time of renewal. With that, several large employers withdrew from the association, decreasing the size of the pool significantly, so premiums went up again. This option would not be particularly attractive in any event for long-term care employers, since direct-care workers tend to be older and more injury-prone than the general population. Both of these models fail to address the basic underlying issue: cost. A 2% wellness discount is good, but it won’t make up the difference between high premium costs and low wages for direct-care workers. Toward the end of the meeting, Elise Scala and I presented brief overviews of experiences from other states, both of which are highlighted in Coverage Models from the States (pdf). I went first and talked about Montana and Rhode Island. In Montana, recent legislation singled out direct-care workers for special attention. The state will increase Medicaid payments to home care agencies that make affordable coverage available to their employees. The details are still under discussion, but the plan is supposed to go online in January 2009. Several summer meeting participants voiced interest in this model, which transfers a very large portion of the subsidy costs to the federal government through the Medicaid matching dollar program (in Maine, the feds provide 66% of all funding for Medicaid expenditures). The group plans to discuss this further at the next meeting. In Rhode Island, the state singled out child care providers as eligible to join a state health insurance program. Depending on income, the state requires these workers to contribute between $61 and $130 a month. As in Montana, the program is subsidized through Medicaid, transferring a significant portion of the cost to the federal government. Elise spoke briefly about models that focus not on individual groups of workers but on the obstacles that prevent direct-care workers from acquiring coverage. Tailoring programs to these common obstacles and thus making them accessible to all low-income workers, she said, would probably reduce political opposition – and ultimately increase coverage for direct-care workers. Talking strategy After the general BOI meeting, a small group from the Direct Care Worker Coalition spent an hour in a wide-ranging talk with Mila Kofman and Judy Ward, the Superintendent and Deputy Superintendent of Insurance. Both Mila and Judy listened carefully to our concerns and seemed genuinely interested in helping us find ways to move our agenda forward. Mila, coming from a federal background, was focused on federal options we might explore, including possible increases to Medicaid’s SCHIP program, which she felt might be used to increase Medicaid funding and ultimately reimbursement rates. She also mentioned a new initiative co-sponsored by Sen. Durbin and Sen. Snowe, the SHOP Act, which would allow small businesses to band together in a larger risk pool in order to obtain lower premiums. The SHOP Act would provide employers with significant tax credits if they cover their employees. It probably isn’t an immediate or complete solution for direct-care workers, but it may help some employers overcome the financial barrier to providing affordable coverage. Mila and Judy both expressed an interest in scheduling a longer meeting to delve more deeply into the obstacles to coverage, the complicated interactions between reimbursements and coverage, unemployment insurance and injury rates. We expressed a desire to hear more about their thoughts on state-level policy and/or code-related options on which the Direct Care Worker Coalition might focus its future efforts. Though no immediate solutions emerged from this meeting, I think it is fair to say that it was quite productive and moved the Direct Care Worker Coalition very much into the thoughts of both of the BOI’s top administrators. At the next meeting, I believe the plan may be to have more open discussion of the solutions presented to date, and perhaps some discussion of Dirigo. Judy also hopes to begin discussing the kinds of recommendations the group will want to see included in the final report.
Kurt Wise
Financial Analyst
Maine Center for Economic Policy
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