Premium Assistance: Evolution of Programs and New Challenges

Jeremy AlbergaSenior Manager

SCI Workshop for State OfficialsJune 28-29, 2004

Goals for Premium Assistance (PA) Programs

Leverage employer contributions Keep family members together Limit Crowd-Out Ease transition from public to private coverage Strengthen private insurance market Platform for future program expansions Eliminate “stigma” of public program

What Problems Are You Trying to Solve?

Different problem requires different solution…

1. Problem: Coverage offered by employer but not taken up by worker

Solution: Subsidize employee premium

-or-

2. Problem: Employer doesn’t offer coverage at all

Solution: Create affordable product targeting employers and workers

PA Strategy 1: Address Employee Take-up

Typical Wage in Firm Average Take-up Rate

Less than $7/hr. 78%

$7-$10/hr. 86%

$11-$15/hr. 89%

More than $15/hr. 89%

Total 87%

Note: The take-up rate is the percent of employees in a firm who enroll in a plan offered by the firm. All estimates are weighted by the number of employees in the firm.

Source: RWJF Employer Health Insurance Survey, 1997

Challenges to Date

Administrative complexities– Start-up costs

– Identify potential enrollees

– Coordination with employers

– Wrap-around requirements

– Assessing cost effectiveness

Availability of employer coverage – Low employer contribution for dependant coverage

Employer reluctance to participate

PA Strategy 2: Address Employer Offer Rates (Offer Rates by Firm Size, 1996-2003)

Source: Kaiser/HRET Employer Health Benefits 2003 Annual Survey

Premium Assistance: The New Breed

Create a new product, targeting working uninsured– Target either employer or employees

Challenges– Coordinating with carriers, other stakeholders– Avoiding adverse selection– Finding new funding sources in difficult times– Controlling rapidly rising costs

Ongoing Technical Assistance

Premium Assistance Toolkit (with CMS, NASHP)– First three sections written (program costs, design,

benefits and cost-sharing)

– 1-day PA mtg. at NASHP Annual Conference, Aug. 1-4

Dissemination of lessons learned from 8 demonstration grantees (AR, HI, ME, NM, OR, RI, VA, WV)

State Reports: 101 individual state and multistate reports [keyword=“premium assistance”]

http://statecoverage.net/reportsearch/index.cfm