The Kansas DMIE:Implications for HealthReform
Jean P. Hall and Janice Moore
University of Kansas
NASMD Annual Conference
November 9, 2010
Washington, DC
Background
Approximately 200,000 people areenrolled in 35 state high-risk poolsnationally
Individuals are uninsurable in theprivate market due to pre-existingconditions
Health reform legislation created atemporary national high-risk pool, calledthe Pre-existing Condition InsurancePlan (PCIP) beginning in July 2010 andrunning through December 31, 2013
Current State High-Risk Pool Plans
Steep premiums that increase with age;range from 125 to 200% of individualmarket rates for the state
High levels of deductibles and co-insurance; similar to other individualpolicies
Limits on some benefits, such as preventiveservices, prescriptions, and mental health
In Kansas, no coverage for adultimmunizations, dental, vision, hearing,contraception, or obesity treatment
The Kansas Demonstration toMaintain Independence & Employment
Randomized controlled study funded by theCenters for Medicare and Medicaid Services
Tested the hypothesis that provision ofcomprehensive benefits to HRP enrolleescould prevent or forestall disability
Kansas HRP participants historicallytransition to SSDI at a rate 8 times that ofthe general population
Intervention provided Medicaid-like servicesas wraparound, with enhanced benefits andgreatly reduced out-of-pocket costs
Methods
Kansas Risk Pool participants ages 18 to60, working ≥40 hours per month, with apotentially disabling condition
416 individuals in three cohorts
Six baseline focus groups with total n=42(10% sample, self-selected)
Telephone surveys with entire sampleassessing health status, work efforts,medical debt, experiences with risk pool
Analysis of claims data
Participant demographics
50% male
99% white
50.6 years mean age
71% are self-employed
45% work <40 hours/week
$49,970 average individual income
80% had some college; 45% have afour-year degree or higher
29% report medical debt
Claims and Survey Data Findings:Co-morbidities*
* Based on baseline claims and self-report
Musculoskeletal
52%
Diabetes
29%
Mental Illnesses
36%
Cardiovascular
32%
Neurological Disorders
16%
Respiratory
20%
Cancers
19%
Focus Group Findings: 3 Themes
High premiums and deductibleslimit ability to afford even basicservices
Prescription costs are particularlyproblematic and compliance is poor
Delay or forfeit strategies increasestress and diminish health andquality of life
High Premiums and Deductibles
Choose higher deductibles to obtainaffordable premiums (more thanhalf >$2500)
Delay or forgo care includingdiagnostic, preventive, andtreatment
“Save up” visits and surgeries untilthey meet deductible
Stop care at start of calendar year
Prescriptions
Use free samples, generics, double-dosewhenever possible
Refuse, delay, reduce dosage, skip doses oruse drugs no longer prescribed
“I cut my insulin in half.”
“Now that I’ve gotten the lower premiumsand can afford the medication, I take thepills every day exactly like they’re writtenon the prescription bottle and check mysugar three times a day like I’m supposedto because even the little box of strips cancost $85 a box.”
Increased stress
“If somebody says you ought to do this[medical test] and you’re saying I don’tthink I can because I can’t afford it…and then you go home at night and say‘did I do the right thing?’ That eats onpeople.”
“You’re going ‘is this other painsomething I should have gottentested?’ I couldn’t afford it, but youknow you worry.” [from a breastcancer survivor]
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Many are underinsured
53% have deductibles > 5% offamily income
38% have out-of-pocket expenses>10% of family income for self &family
72% have one or more of theseindicators of underinsurance
With a deductible of $2500, peoplewith an annual income less than$50,000 are considered underinsured
Discussion and Implications
Most in the study were well-educatedand middle class; they knew theyneeded services and medications butcould not afford them
Underinsurance may be as big a barrierto access as uninsurance, especially forpeople with chronic conditions
When provided DMIE benefits andrelieved of cost burdens, participantsincreased use of medically appropriateservices and had better outcomes
Service Utilization
Service Type
InterventionGroup
ControlGroup
Prescriptions
96%
80%
Diagnostic/Preventive
97%
88%
Office visits
98%
86%
Medical equipment
18%
7%
*Intervention group utilization significantly different from control at p<.001
PMPM costs
Service Type
InterventionGroup
ControlGroup
Prescriptions
275
200
Diagnostic/Preventive
216
180
Office visits*
55
32
Medical equipment*
19
5
Total
1161
880
*Significantly higher, p<.001
Average total annual allowed costs:
Control Group: $10,560
Intervention Group: $13,932
DMIE Health Status Outcomes
The PCIPs
Coverage level is similar to that ofBronze coverage in the Exchange
Premiums are less than in manystate high-risk pool plans, butparticipants are still likely to beunderinsured
PCIP eligibility requires beinguninsured for 6 months prior toenrollment; some enrollees will havepent-up need
Implications for Health Reform
People with chronic conditions ordisabilities who are self-employed or donot qualify for employer-sponsored healthcare will likely acquire insurance throughthe Exchange.
If the Exchange expands coverageprimarily through plans with high cost-sharing, the benefits of coverage may bemuted.
Participant experiences with the PCIPs mayprovide insights into possibleimprovements for Exchange coverage.
Example from the Exchange
Individual age 50 and income at 435%of poverty level ($50,000)and $10,500in medical costs:
Annual premiums=$6978* (14% ofincome)
Annual out of pocket = $4,900 (9.6% ofincome) assuming $2500 deductible and30% co-insurance**
Cost of premiums + OOP = 23.6% ofincome
* Premiums from the Kaiser Family Foundation on-line calculator;
**Bronze level coverage has a minimum 60% actuarial value.
A few more Exchange examples
Family of 4 making $67,000 (304%FPL):
$6395 annual premiums (9.5% of income)
$7973 maximum OOP (11% of income)
=21% of income spent on health care
Individual making $33,000 (305%FPL):
$3135 annual premiums (9.5% of income)
$3987 maximum OOP (12% of income)
=22% of income spent on health care