Posted February 18, 2008

INSURE MISSOURI UPDATE

In September of 2007, the Governor announced a new health insurance initiative called "Insure Missouri." The proposal is to develop a state subsidized private health insurance network for the working adults in Missouri earning less than 185% of poverty and who do not presently have health insurance. The program is to be phased in starting March 17, 2008 for working adults earning less than 100% of poverty. The proposal provides that the State will pay the full premium for individuals with income less than 100% of poverty but there will be some co-pays for doctor and hospital visits and for prescriptions.

When the current Legislative Session began in January, several members of the House of Representatives expressed concern that the Insure Missouri program proposed by the Governor could not be implemented because it went beyond the authority that was granted last session for a demonstration project in only two regions. The Speaker of the House appointed a “Special Committee on Healthcare Transformation” to investigate the matter. The Committee is chaired by Representative Robert Schaaf (R 28th) along with Representatives Brandon, Dougherty, Ervin, Hunter, Kingery, Page and Talboy.  This Committee has conducted numerous meetings and taken about 30 hours of testimony but they have not yet reached a conclusion. It is uncertain what authority this Committee will have to stop the first phase, should it choose to try, since the Governor contends, no additional action by the legislature is necessary. However, the Governor has requested substantial additional funds for the continuation of phase 1 and the expansion into the additional phases.

After the Governor’s initial proposal in September, the program was put out to bid asking private insurance companies to operate the program with the state  paying them for the cost of the insurance. The bids were opened beginning January 17, 2008 and a summary of the bids for the first phase was released to the Legislative Committee in early February. Proposals were received to operate the program in all seven of the social services regions of our State.  The average cost in the regions ranged from $359.25 to $389.00 per month. It is not possible at this time to know exactly, but a reasonable approximation might be that the average cost statewide would be about $365 a month to insure this population. For comparison, in October 2007, the Mo Health Net (Medicaid) average cost was $358.79 for each of the 98,000 recipients receiving benefits. Therefore I the average costs for Insure Missouri Program are accurate, it could cost about $6 a month more per participant than if they had been enrolled in Mo Health Net (Medicaid).

In the Governor’s original announcement, it was estimated that about 53,000 would enroll for this first phase. If the $6 per person premium over Medicaid holds true, this program would cost the State an extra $318,000 per month and nearly $3.5 million per year when compared to adding these people to the existing State program. Moreover, as currently configured Insure Missouri provides more limited coverage and higher participant costs than traditional Medicaid.

In the original statement on Insure Missouri by the Church and Society Mission Team we concluded that “As compared to Medicaid, Insure Missouri will have reduced coverage (no maternity) significant co-pays.”  Therefore, it appears that this proposal will be a higher cost solution.”  While there is significant uncertainty, recently released information supports our original conclusions. These facts may lead the Special Committee on Healthcare Transformation to have reservations about this program but they might still support the lower cost option to restore coverage for these working poor through the existing Mo. Health net (Medicaid).   

Posted January 15, 2008

Insure Missouri

Governor Blunt’s New Plan to Provide Health Insurance to Working Poor Adults

In the last two years, increasing numbers of low-income Missourians have lost their health insurance and have either had to forego health care or use hospital emergency rooms for routine care.  These practices discourage lower cost preventative health care and drive up total health care costs, increasing premiums for people who do have health insurance.  In August, figures from the U.S. Census showed that the number of Missourians without health insurance jumped 16 percent -- three times the national average -- rising by 104,000 residents to a total of 772,000. On September 19th, Governor Matt Blunt announced a new health insurance initiative called "Insure Missouri." The purpose of the proposal is to develop a state subsidized private health insurance network for the estimated 210,000 working adults in Missouri with incomes less than 185% of poverty who do not presently have health insurance.

Insure Missouri

Insure Missouri is proposed to be a network of private insurance companies that offer health insurance to working poor adults earning less than 185% of poverty.  The program would be phased in; beginning in March of 2008 it would accept adults earning less than 100% of poverty ($20,700 for family of 4) and the premiums would be paid for by the State of Missouri. As outlined by the Governor, beginning in July of 2008, the program would be expanded over the following four years to include adults earning up to 185% of poverty ($38,200 for family of 4). It is estimated that about half of the eligible will participate during the first two years.

The current plan is to add a new component to the program in 2009 that will provide a state paid catastrophic coverage to the individuals who get their health insurance from the small businesses where they work. The concept is that by having the state cover these very large expenses it would help prevent premium increases to the small business and help keep existing coverage affordable for the business and individuals.

Special Features

The Insure Missouri program would provide no maternity coverage. Women with income below 185% of poverty who become pregnant are already eligible for Medicaid (now called Mo Health Net) and they would be moved from the private insurance group to the State program. The proposal provides that the State will pay the full premium for individuals with income less than 100% of poverty but there will be some co-pays for doctor and hospital visits and for prescriptions. When the program expands to cover adults between 100% and 185% of poverty, the added participants will be required to pay part of their insurance premiums on a to-be-determined sliding scale with the State paying the remainder of the premium. The new participants will also have co-pays that will likely be larger than those required of the individuals below poverty. None of the literature describing the proposal details what happens if an individual becomes disabled and can’t work but it is likely they would lose their Insure Missouri coverage.

Funding / Cost

As a newly proposed State program, Insure Missouri was put out for bid in October 2007, with the bids due in the first week of 2008. The actual initial costs and the out year cost are at present rough estimates based on the cost of the State Medicaid program and a guess at actual participation.

Cost estimates are:          State Fiscal Year 2007/2008   $51.6 m  (March to July)

                                         State Fiscal Year 2008/2009   $452.1 m

If the necessary Medicaid waiver is approved by the Federal government, about 60% of this program's cost will be paid by matching federal funding from the Medicaid program. Some portion will be covered by contributions from hospitals with the remainder coming from the general revenues of the State and premiums from participants.

Our Opinion

It is important to reduce the number of Missourians who do not have health insurance. If the “Insure Missouri” program is implemented according to the promotional material, it will expand health care coverage for some working poor adults in Missouri and make substantial progress toward restoring coverage to the individuals cut from the Medicaid program two years ago. Further, Insure Missouri should not be regarded as a replacement for the health care services provided under the Missouri Medicaid program prior to the deep cuts enacted by the governor and the legislature in 2005.  Insure Missouri, if supported by the legislature, will help some employed people gain or regain access to health care but will not restore coverage to low-income unemployed or children.

As compared to Medicaid, Insure Missouri will have reduced coverage (no maternity) significant co-pays and premiums to be paid by the individuals. Even with those factors, the costs to the State are estimated to be about the same as in the Medicaid program. Therefore, it appears that this proposal will be a higher cost solution. Private health insurance programs typically have 14% administrative cost as compared to 3% for the Medicaid program.    Insure Missouri is a first step toward undoing the damage done by the state’s current health care policy but it has some significant shortcomings.   

We welcome your thoughts and feedback. Please use the following email address to let us know opinion: C&S Mission Team