Diabetic Health Insurance Blog

EXUBERA® (insulin human [rDNA origin]) Inhalation Powder is the first diabetes treatment that you can inhale. And it could change the way you manage your blood sugar.

EXUBERA helps control high blood sugar. It works in adults with Type 1 diabetes. It works in people with Type 2 diabetes as well.

For some people with Type 2, EXUBERA can be used by itself. And for others, it may be part of a treatment plan that includes diabetes pills or long-acting injected insulin. People with Type 1 diabetes will need to take some long-acting injected insulin in addition to EXUBERA.

In the U.S., the introduction of EXUBERA will begin
in September.

This time I was at the Fiesta Bowl, those pens suck!! Thankfully I had another one handy. Some day it’s going to kill me and I am going to sue Lilly for making a shitty pen!

Personally, the concept of an insulin pen is great.  And I would never go back to shooting up with regular needles for humalog.  However, there are a few drawbacks which deem the makers of the HumaPen by Lilly complete idiots.

The pens which they get knocked around a bit, don’t work.  If you are like me the pen is desirable because you can put it in your coat pocket or (gasp!) your pant pocket and no one knows the better.  Prior to the pen, you had to always carry around a vial and a needle.  When your needle fell out everyone would gasp in horror and think you were a drug user…and you felt like an ass.   If the vial fell out it would break and then you would be up shit creek. 

The pen is a great alternative and 8 times out of 10 it works like that.  However, the other 2 times the damn thing gets jammed.  That’s right it jams.  I don’t know how it happens, but it happens enough to me that it has put me in a few predicaments where I needed insulin but couldn’t get it because the piece of shit pen was jammed.

Women have a purse, so this probably never happens to them. Trust me, I leverage my wife’s purse as much as possible.  But many times the pen gets stuffed into my carrying case, my pocket or my suit coat and then gets thrown around a bit.  It’s just a big pussy device and it pisses me off.   But I put up with it, because it’s better than the needle and vial option.

The second thing that bugs me about the insulin pen by Lilly is that is stops short of delivering all the insulin in the cartridge.  I end up having to stick a needle in there to get out the last 20 units or so.  20 units is 20 units.

Thirdly the dosage is imprecise at best.  It drips when you pull it out, and at times you need to push it harder than others, so you definitely don’t get the correct dosage.

Overall, I think Lilly is full of complete idiots.  The pen is a novel idea but Lilly has a crappy implementation.  I am going to look for the pens that are in Europe in ebay to see if I can get my hands on a couple of those.

Something like this:

I’ll let you know how it all turns out!

I’ve been a diabetic for I guess a little over 20 years.  My diagnosis was at age 12 and now I’m 32, so 20 years.  No problems to report to date, outside of limited background diabetic retinopathy that I monitor every six months.  No laser surgery required as of yet.  I’ve been taking Bilberry to help increase the blood flow to my retina.

More importantly though, I’ve been working to keep my A1C’s around 6 to 6.5. 

I find that when my schedule goes awry or when my aerobic exercise routine becomes inconsistent, I begin to have trouble with elevated blood sugar readings when I wake up.  I can go to bed 150 and wakeup at 289.  Not good and it starts my day off like crap.

The last three days I’ve ran on the treadmill for 2.5 miles.  Last night I went to bed with my blood sugar at 110.  Since I don’t like to eat within 2 hours of bed, I popped a couple of sugar tablets and went to bed.  At 2:30 I awoke with low blood sugar symptoms.  I popped a coupled more tablets and awoke at 130.  I also shoot up about 18 units of Lantus at around midnight each night.  That dosage will lower to 15 units if I keep exercising every day.

Life before Lantus was not so good as I would always have high blood sugar readings in the morning.  So much so that I would wake up at 4am to give some humalog to make sure that the blood sugar was ok when I awoke.  But that was hard on my body.  It’s not healthy to give insulin only to lower blood sugar.  With no food to act upon, an extra shot like that would really wear me out. 

That’s why Lantus has been such a great drug.  It really has smoothed things out for me.  Many less lows and many less highs.  Someday I should probably experiment with an insulin pump,  but I just don’t like the idea of wearing a “branding device” which reminds me of my diabetes..especially if I can keep my A1C’s at 6.0.  

Any thoughts?

Does it work?

Brent

National HCTC rules
Comprehensive explanations of the HCTC program are available elsewhere.1 For purposes of this report, however, the following brief summary may be helpful:
• Eligibility. Several groups qualify for HCTCs: (a) displaced workers whose layoffs have been certified by the U.S. Department of Labor (DOL) as trade-related and who therefore either receive Trade Adjustment Assistance (TAA) cash payments or would qualify for such payments but for their receipt of unemployment insurance (UI); (b) certain adults ages 55 through 64 who are paid by the Pension Benefit Guaranty Corporation (PBGC), which assists retirees from companies that have suffered severe financial reversals and so no longer pay promised defined-benefit pensions; (c) adults ages 50 through 64 who receive Alternative Trade Adjustment Assistance (ATAA) payments because they suffered trade-related job loss and then shifted to a new line of work for lower pay; and (d) dependents of individuals in the three previous categories. Individuals must also meet other criteria for eligibility, including absence of health coverage through Medicare, Medicaid, or employer-based coverage where the firm pays 50 percent or more of premiums.

Note: I am in the beginning stages of trying to understand the eligibility requirements for Health Insurance Tax Credits which pay 65% of the uninsureds premium. North Carolina participates in this program and Blue Cross Blue Shield Advantage Program is eligible (that’s the program I am using)

Overview

Health Coverage Tax Credits (HCTCs), which pay 65 percent of beneficiaries’ health insurance premiums, constitute an ambitious experiment in using the federal income tax system to subsidize health coverage for the uninsured. The HCTC program has made an excellent start, successfully developing program infrastructure and preventing the kind of marketing fraud that marred a previous tax credit program. However, the new program is experiencing low takeup rates; there have been delays and confusion surrounding enrollment into the advance-payment option; and there is some dissatisfaction with coverage offered by participating health plans. To gather more evidence about HCTCs’ effectiveness and assess their prospects as a model for broader reforms, researchers visited Maryland, Michigan, and North Carolina, which used varied approaches to HCTC implementation. The authors present key findings and propose reforms to improve HCTCs’ ability to help its current target population and aid policymakers in designing future health insurance tax credits.

State-specific case studies are available at www.esresearch.org.

Executive Summary

When the Trade Act of 2002 became law, the nation began a major experiment in helping uninsured Americans purchase health coverage. This legislation created Health Coverage Tax Credits (HCTCs), which pay 65 percent of beneficiaries’ premiums for qualified coverage. Such coverage consists primarily of COBRA plans sponsored by former employers and private health plans offered to HCTC beneficiaries by state arrangement. The credits are refundable, which means they are paid in full to eligible households, including those who owe little or no federal income tax. The credits are also advanceable, which means that at the beneficiary’s request they can be paid directly to the insurer each month, as premiums are due.

The HCTC program has made an excellent start establishing basic program infrastructure and preventing the kind of widespread fraud that was reported in connection with an earlier health insurance tax credit program. However, enrollment in the new tax credit has been low; consumers have experienced delays and confusion as a result of the complex enrollment process for advance payment; and there has been some dissatisfaction with the coverage offered by participating health plans.

To gather evidence about the effectiveness of the new tax credits and to assess progress in finding solutions to emerging challenges, researchers from the Economic and Social Research Institute (ESRI) visited Maryland, Michigan, and North Carolina. In those states, enrollment of potentially eligible individuals into HCTC advance payment, though small in absolute terms (between 8 percent and 12 percent of potentially eligible individuals), was larger than the comparable national enrollment rate of 6.1 percent (representing 13,500 individuals of the nearly 222,000 who were potentially eligible for advance payment). Through these visits, the researchers sought to learn how three very different states, each using its own distinctive approach to implementation, achieved this comparative success. The authors also hoped that these visits would help identify obstacles that even the most effective state officials and private sector leaders face with the new program, as well as point the way toward possible solutions.

Following are some key findings from the three-state study:

Public and private entities involved in state-level HCTC implementation were dedicated, creative, and effective. Gubernatorial leadership was critical in making HCTC implementation a top priority, with both public and private actors showing remarkable commitment to the program. In all three case study states, government officials worked together across traditional organizational boundaries to get HCTC-related systems up and running in remarkably brief periods of time. All three states likewise devised creative mechanisms to prevent beneficiaries from being required to pay premiums in full for several months before the start of advance payment. These mechanisms included so-called “bridge” or “gap filler” programs in North Carolina and Maryland that used National Emergency Grants (NEGs) from the U.S. Department of Labor (DOL) to subsidize beneficiaries’ premiums while they waited for their advance payment to start.

Agencies involved in national HCTC implementation received generally positive reviews. In all three states, public and private stakeholders commended the responsive and nimble assistance they received from the Treasury Department, the Internal Revenue Service (IRS), and the private contractors working with the IRS. The leadership at DOL was viewed with more ambivalence. When unexpected problems emerged with advance payment, DOL received plaudits for creatively adjusting its policy on states’ permissible use of NEG dollars. However, concerns were expressed about DOL delays in ruling on specific state requests for NEG funds.

Enrollment into advance payment was complex, which increased administrative costs and reduced take-up of the tax credit. To apply for HCTC, a displaced worker was required to make various applications to at least three different entities (the state workforce agency, the health plan, and the national HCTC office). To further complicate the application process, workers were responsible for passing documentation, in hard-copy form, back and forth between various entities to which they were applying. Privacy concerns often prevented federal officials, state officials, and health plans from sharing data or even speaking directly with one another about particular beneficiaries’ applications. As a result, beneficiaries frequently had to act as “go betweens” communicating technical matters between multiple public and private agencies; these efforts increased administrative costs, and when beneficiaries could not act as satisfactory intermediaries, many lost coverage. To their credit, the officials administering the national HCTC program have taken several promising steps in recent months to simplify the enrollment process, though more may need to be done.

Most informants agreed that the main reason why few beneficiaries enrolled in advance payment was workers’ perception that they could not afford to pay 35 percent of premiums. According to the vast majority of informants in the three study states, beneficiaries’ inability to pay their 35 percent premium share was by far the most important factor limiting enrollment. That problem was compounded by other obstacles to take-up, including delays in the start of individual beneficiaries’ advance payment and the general complexity and confusion of enrollment.

Most enrollees preferred comprehensive coverage to less expensive insurance with high cost-sharing. In Maryland, 60 percent of beneficiaries enrolled in the high-risk pool’s more comprehensive HMO option, which had no deductible, rather than the PPO, which had a $1,000 deductible, even though the HMO cost roughly 50 percent more. In Michigan, every beneficiary who enrolled in state-qualified coverage chose the more comprehensive plan, even though it cost 32 percent more than the plan with 50 percent coinsurance and no coverage of physician visits or preventive care. In North Carolina, 52 percent selected coverage with $250 or $500 deductibles, even though such coverage cost between 22 and 70 percent more than the highest-deductible plans. By contrast, a number of North Carolinians who selected higher-deductible plans to lower their premium costs later expressed strong dissatisfaction with that coverage. For example, some adults with chronic illnesses could not afford to refill their prescriptions, perceived their coverage as largely pointless, and eventually disenrolled.

Health coverage with pure or modified community rating avoided some serious problems with nongroup coverage that based premium levels on individualized assessment of health status. In Michigan and Maryland, stakeholders expressed no dissatisfaction with those states’ rating rules for HCTC coverage. Michigan’s coverage was purely community rated, with all enrollees into a given plan charged the same premiums, regardless of age, gender, area of residence, or individual health history. Similarly, Maryland’s high-risk pool varied premiums based on age alone, without any medical underwriting (the process through which insurers assess each applicant’s individual health risk).

On the other hand, North Carolina’s rating rules permitted premium variation based on factors that included age, gender, and medical underwriting. These variations created tremendous dissatisfaction, according to virtually every stakeholder interviewed. Beneficiaries, officials, and others typically found it unfair that HCTC’s state-qualified coverage was least affordable to those who needed it most, with premiums that varied dramatically based on factors outside the individual’s control. For example, premiums could increase by 45 percent because of gender (for plans that excluded routine maternity care); by 179 percent for women who opted to include coverage for routine maternity care; by 211 percent because of age; by 253 percent because of individual health history and health status; and by more than 1,300 percent because of all these factors combined.

Medical underwriting in North Carolina also had a dramatic effect on take-up. Among the displaced workers who were quoted higher premium rates after the underwriting process concluded, fully 69 percent dropped out of the program at that point. If these individuals had instead completed their enrollment into advance payment, more than 3,900 additional North Carolinians would have received coverage, increasing total, national HCTC enrollment by 42 percent.

Some adverse selection and risk segmentation among plan options may have taken place. In Maryland’s high-risk pool, there appeared to be a stark difference between HCTC enrollees into the pool’s more generous HMO plan (which had no deductible) and the pool’s less expensive and less comprehensive PPO plan (which had a $1,000 deductible). Average per-member-per-month claims were $2,817 for HCTC beneficiaries in the former plan but only $433 in the latter. While additional data may be needed to come to a definitive conclusion, state officials were convinced that adverse selection had taken place, with HCTC beneficiaries who knew their health problems required more expensive care disproportionately tending to enroll in the more comprehensive plan.

Consumer protections achieved mixed results. Through strenuous efforts by public and private agencies, most workers affected by well-publicized economic displacements made it onto HCTC before 63 day gaps emerged that would have permitted insurers to exclude preexisting conditions. Officials expressed concern that more routine, lower-profile displacements could easily lead to gaps lasting 63 days or longer. HCTC was used by almost no one who experienced gaps that triggered preexisting-condition exclusions, since potential beneficiaries apparently viewed such limited coverage as not worth the cost.

Widespread marketing fraud was not a major problem, although there were isolated instances of fraudulent enrollment. HCTC’s centralized enrollment systems prevented the kind of large-scale marketing fraud that was reported for an earlier insurance tax credit program that permitted nongroup insurers to obtain credits by directly recruiting and enrolling potential beneficiaries. However, some nongroup insurers in North Carolina that were not state-qualified plans may have misrepresented themselves to a small number of HCTC beneficiaries and defrauded them of premium payments.

In view of these findings, a number of steps are worth serious consideration, both to improve HCTC’s ability to help eligible workers and to enable policymakers to extrapolate from the HCTC experience in designing broader health insurance tax credits. For example, increasing the size of HCTCs (whether for all or some beneficiaries) and new federal strategies to get short-term subsidies to qualified individuals promptly—without asking them to pay monthly premiums in full—will likely be needed to substantially increase enrollment. In addition, further simplification and streamlining of advance-payment procedures may be required to improve take-up and lower administrative costs. Such simplification could give applicants the ability to waive confidentiality, thereby permitting direct communication between multiple public and private agencies that are trying to help particular individuals enroll. Among other benefits, that could permit workers to seek HCTC advance payment by filing one application with one agency, which could then communicate with other entities as necessary. Similarly, careful refinement of consumer protection rules could prove helpful to beneficiaries, government agencies, and health plans alike.

It is likewise important to conduct further research that could provide additional information about the problems that have emerged and suggest possible solutions. Only after the HCTC program has been strengthened and tested will it be possible for the HCTC experiment to yield firm conclusions about the inherent capacity of the federal income tax system to subsidize health coverage for the uninsured.

Jul. 1–About $50 million of the state’s $17 billion budget could go to tax credits to help the state’s smallest businesses defray soaring health insurance costs.

A provision in the House version of the budget would provide a tax credit of $400 per employee to companies that provide health coverage and have no more than 25 employees.

Before it could take effect, House members must persuade colleagues in the Senate to write it into the final spending plan that lawmakers are hammering out. The credit would cost about $48 million in its first full year.

Rep. Hugh Holliman, a Davidson County Democrat and primary sponsor of the tax credit legislation, acknowledges that a tax break isn’t a cure-all. But he thinks it’s time the state took some action to help those companies struggling most to keep coverage for their workers.

“We have not done anything to help our small businesses, but we have given big companies tons of money in incentives,” said Holliman, who is on the conference committee working on the final budget.

Rising costs for health insurance have become a burden for businesses, which have seen the cost of coverage increase 50 percent to 60 percent in a few years amid double-digit premium increases. Small businesses have been hit hardest because they usually have fewer insurers to choose from and they don’t have the purchasing clout of larger companies.

Two years ago, premiums shot up 50 percent at Smith Seal, a Raleigh company that distributes hydraulic and pneumatic seals, even though employees had no unusual medical problems, owner Judy Smith said. She said the births of a couple of healthy babies were the group’s biggest medical expenses that year.

“It does not seem to matter what the claims are,” said Smith, who last year moved to a plan with a $5,000 deductible to trim premiums.

She pays premiums of about $2,000 a month — or $24,000 a year — to cover 12 employees and their families. The proposed tax credit would shave nearly $5,000 off that.

To qualify for the proposed tax credit, employers would have to pay at least half of workers’ premiums.

“It would be wonderful if it would pass,” Smith said. “But I do think it would be just a Band-Aid.”

Smith is expecting another hefty increase when she renews coverage this fall. She probably will ask employees to begin paying at least some of the cost of dependent coverage.

Other small-business owners are choosing not to offer health benefits at all.

The percentage of small businesses offering health benefits nationally fell in the past four years, from 68 percent in 2001 to 63 percent last year, according to the Kaiser Family Foundation. According to the group, which defines small businesses as those with 199 or fewer employees, that means about five million fewer workers have coverage through their jobs nationwide.

Holliman, a small-business owner whose printing company provides health benefits to five workers, said a tax credit could at least slow that erosion.

But he may have an uphill battle convincing the Senate.

Some lawmakers say a tax break to businesses already providing health insurance may not be the best way the General Assembly can weigh in on the problem.

Sen. Tony Rand, a Fayetteville Democrat who is also on the budget conference committee, would prefer to do something to help uninsured people buy coverage.

Rand likes a Senate proposal that would create a state-subsidized program under which insurers would offer basic hospital and medical coverage at prices significantly lower than those now available in the state. The program is modeled on a similar one in New York.

Form your own small group if that’s an option. Even for tiny groups, employer group policies are often subject to different rules, are more competitive, and offer lower prices than individual policies.

In New Jersey you can form a group with as few as two employees, including yourself, as long as each employee works a minimum of 25 hours per week and you pay the employer’s share of social security taxes for your workers. And group policies can cost 20% to 50% less than individual coverage, says Barbara Ziegler, a health-insurance agent in Brick, N.J. In Washington, another state with few choices in individual health insurance, self-employed people can form a group of one and have a much wider selection with more competitive prices. But you have to submit tax forms that prove you really are a business.

Join an association that has group coverage. In some areas, such as Rochester, N.Y., the local chamber of commerce offers some of the best health-insurance options around, says Alan Ziegler, an employee-benefits consultant and broker.

Association plans tend to be more attractive in states such as New York that don’t have many options for individuals. In states where there’s more competition, they can end up being magnets for sick people, with spiraling prices. You may not have this option at all, because some state laws are so restrictive that it’s “virtually impossible” for association plans to operate, says Jessica Waltman of the National Association of Health Underwriters.

If all else fails and you don’t want to go without coverage, you may have to bite the bullet and get a job that offers health insurance as an employee benefit.

Prepared by Bruce Abbe, Vice President of Public Affairs,
Communicating for Agriculture & the Self-Employed
Board Member, National Association of State Comprehensive Health Insurance Programs
Editor: “Comprehensive Health Insurance for High-Risk Individuals - a State-by-State Analysis”

Risk pools are -

* Special state health insurance programs, established by state legislatures, that serve as a safety net guarantee of access to health insurance for people with pre-existing, high-risk, health conditions.

- Risk pools serve people who -

* are denied coverage in private market due to a pre-existing condition,
* or who are eligible for portability under HIPAA (most states)
* or who can only access insurance at rates higher than pool (some states)
* other special cases

* Risk pools largely serve people who are self-employed, or who work for businesses that don’t offer insurance, unemployed, early retirees, young people leaving their parents’ family coverage.
* People in the individual market — who often have chronic illnesses. Cancer, diabetes, heart and lung diseases, AIDS, HIV, alzheimers, cerebral palsy, cystic fibrosis, parkinson’s, sickle cell anemia, MS. Any of the full range of chronic diseases. The disabled.
* Generally middle class, working Americans who want to buy insurance but can’t otherwise.
* People who were in employer group plans but hit maximum benefit levels of the plan and now come to the risk pool for continued coverage.
* People likely facing major health care expenses… who have an acute need for insurance… who, without it, could potentially be bankrupted by their illness.

States that have Risk Pools –

* First state risk pools established 26 years ago (Minnesota, Connecticut)
* 32 states now have established or are establishing high-risk health insurance pools
(* When Idaho’s High Risk Reinsurance Pool, close related to traditional risk pools, is included, the total is 33).

Alabama*
California
Florida*
Iowa
Kentucky
Mississippi
Nebraska
North Dakota
South Carolina
Utah
Wyoming

Alaska
Colorado
Illinois
Kansas
Maryland
Missouri
New Hampshire
Oklahoma
South Dakota*
Washington
Arkansas
Connecticut
Indiana
Louisiana
Minnesota
Montana
New Mexico
Oregon
Texas
West Virginia (July 2005 star-up)
Wisconsin
* 29 of the 32 currently operating pools are open year-around accepting all eligible new enrollees.
* 1 is closed for new enrollees - Florida - has been since 1991.
* Louisiana and Illinois have caps on new enrollees due to funding limitations. In Illinois and Louisiana this waiting list is on their regular pools (Louisiana and Illinois HIPAA pools are continuously open.)
* * Alabama - for HIPAA eligibles only. South Dakota is for portability only for anyone with 12 months of prior creditable coverage
* Idaho’s High Risk Reinsurance Pool has many of the same characteristics of a traditional pool with standard coverage and costs, but functions in a guarantee issue environment. All individual carriers in the state offer four plans that are part of the special reinsurance pool that serves high risk individuals. The coverage and cost is the same for all within those plans and the program is subsidized similar to a traditional pool.

- HIPAA portability and risk pools - 28 of the 33 states currently have chosen to use their risk pool as their alternative mechanism for portability.

Latest Statistics (reported by all risk pools for CA directory, June 2004) -

* Total enrollment in all (then 32) operating state risk pools reported - 181,441.
o Enrollment grew by 5 % from year earlier.
o Combined total claims for 2003 grew by 20.9 % to $1,258,789,054.
o Total premiums earned were up 24.3% to $793,545, 922.
o Total administration costs reported was $74,559,415, up 14.3 percent.

* All risk pools inherently lose money, must be subsidized.

* Premiums are somewhat higher than comparable private insurance, designed to not compete with the private market. But pools all have caps on premiums set by legislation to protect consumers.
o Most are 125% to 150% of average for comparable individual market coverage.
o NAIC model legislation- calls for 125% initial, not higher than 200% of average.
o Varies by state — lower premium cost =greater enrollment, more people served.
* Seven states have started low income premium subsidy programs - Wisconsin, Connecticut, New Mexico, Oregon, Colorado, Washington, Montana. More would like to but lack funding to do so.
* Rough average - premiums pay for 55 to 59% of operational costs (varies by state).

* Total deficit/subsidy requirements for all pools in 2003 (claims + admin - premiums earned) - $539,802,547 up 15.2 percent from a year earlier.

* Total subsidy requirements for pools in 2005 and future - likely will go up 10 to 15% per year.

Growth is due to several factors:
o New state pools going into operation
o More rapid growth of newer established pools, until they become mature in the market
o Health care cost inflation (same as for all insurance plans)
o Withdrawal of insurance companies from markets
o Termination of employer group plans

* Yet, overall, the cost of state high-risk pools is still very small in comparison to the size of overall health insurance system Æ’ and in comparison to the benefits risk pools provide by guaranteeing access for everyone in a state and spreading the risk of insuring high cost individuals on a more predictable, manageable basis for insurers. The are a bargain for the overall benefit they provide.

Funding is the Critical Issue for State Risk Pools-

Funding of risk pool subsidies is THE key issue faced by states considering establishing a new risk pool, for states with existing programs, and for any efforts to enhance coverage.

* Federal law — ERISA - complicates attaining equitable funding of subsidy/losses by entire insurance industry through carrier assessments. This is a major hindrance for states considering establishing a pool.
* Risk pools being looked upon to serve additional needs - portability option for individual market under HIPAA; option for new TAA coverage for states.
* Risk pools by design are special access guarantee programs that provide a means for the insurance industry to function better - to provide a means for the high risk high cost individuals to have insurance coverage - and to broadly spread the cost of doing so. But the federal government, (except for small funding grants in 2003-2004) does not contribute to the funding of pools, yet its rules limit the states’ ability to establish fair means for requiring the industry to fund the programs.

Current Risk Pool Funding Methods:

1. Assessment of insurance carriers, HMOs operating in the state based on the amount of business they do.
* 27 state risk pools use some kind of an assessment of carriers. (28 with Idaho, which combines state funding and assessments for losses).

2. Assessment of insurance carriers, HMOs coupled with a full or partial tax credit offset provided against premium taxes paid by the carriers (i.e. state pays)
* 11 of the 27 states allow a premium tax credit — Alabama, Arkansas, Indiana, Iowa, Kansas, Missouri, Montana, New Mexico, North Dakota, South Carolina, Wyoming
* 2 of those states - Wyoming - puts a cap on the total amount of premium tax credit that can be allowed ($2.5 million) to protect state budget. South Carolina — $10 million cap on credit.
* 3 of those states allow only a partial tax credit: Kansas - 80% tax credit, Wyoming - (80% tax credit on first $1.25 million, 50% on second $1.25 million, none thereafter), New Mexico - 30% tax credit.

3. Assessment of insurance carriers with no tax offset (i.e. insurance industry pays)
* 11 states - Alaska, Connecticut, Florida, Idaho, Illinois (only for its HIPAA pool), Kentucky (partial funding source), Louisiana (only for its HIPAA pool), Minnesota, Oklahoma, Texas, Washington.

4. Broader assessment of commercial insurance carriers, stop-loss, reinsurance carriers, TPA’s on a per person/per month basis - (possible indirect pass-on to self-insured plans that otherwise escape their share in funding, for lower assessment per carrier).
* 5 states - Oregon, Colorado, New Hampshire, Mississippi, South Dakota (partial, limited, combined with state funds), plus Indiana (also listed above, which provides partial tax credit) and Washington (which assesses per person but at different levels for fully insured and stop-loss carriers).

5. Broader assessment - using surcharge on hospital bills - (also possible indirect pass-on to self- insured plans).
* Currently two states - Maryland, West Virginia.

6. General revenue or other special dedication of state funds.
* Utah - general revenue appropriation.
* California - set appropriation, $40 million, from the state tobacco tax fund (has been inadequate to meet demand. Pool enrollment was forced to be capped. California now switching to plan similar to Iowa - initial access for uninsurables, with portability G.I. out later on.)
* Illinois, Louisiana - general revenue appropriation for regular risk pool. Assessment of carriers for sister HIPAA pool.
* Nebraska - losses paid direct from insurance premium tax revenues collected by D.O.I. Idaho also designates a portion of insurance premium revenues for its pool.
* Kentucky - combination - assessment of carriers for up to 1 percent of all health premiums, plus funds from the tobacco settlement funds to the state .

* Reality - state budget problems are so severe now, prospects of new state funding for risk pool deficits are slim. Some form of assessments are likely for new states.
* Federal shared funding -is needed and will be important for continued operation of state risk pools if they are to be open and providing affordable coverage for the uninsurable population. Especially important if the federal government adopts programs that send more people to high risk pools.

Risk pools are considered a stabilizing force for the individual market today.

* - Increasingly seen as the preferred approach to guaranteeing access to coverage by insurance industry (not always the case in the past).
* - Compared to guarantee issue…(seen as adding more unmanageable risk across an entire fragile market by many carriers)….

…The basic concept of a risk pool is to establish a small, confined program for the known, highest cost new business…..subsidize the program …and spread the risk broadly on a more even, predictable basis. Reduced risk = more competitive market, more manageable costs.

Risk pools’ role in addressing the Uninsured crisis –

1. Risk pools are not intended to solve the “uninsured” issue. (That is an issue of affordability compared to income. Social issue for government to address.)
2. Risk pools are intended to address the “access” issue. (Very important for the people who are in pools, have acute need for insurance.)
3. Risk pools play a role in making the individual market work better. And making the individual market work better will be important for addressing the uninsured.

Other Recent Developments –

1. First ever federal funding of risk pools was approved in 2002 (part of TAA legislation), implemented in 2003 and 2004 only -
* $20 million start-up grants up to $1 million for states establishing new pools.
* $40 million available for matching funding for operational costs of existing “qualified” risk pools in each of FY 2003, and 2004
o Total operational grants were less than 10 percent of combined losses those years.

2. Bipartisan legislation introduced in Congress in 2005 calling for extending and providing additional federal funding for more years.
* Extending the years from 2005 through 2009.
* Raises the amount of federal matching funding for losses from $40 million to $75 million per year.
* Changes distribution method to be based on number of enrollees in each qualified risk pool. Renews start-up funding grant assistance for new states.

3. TAA Legislation also included first targeted refundable tax credits for health insurance coverage - the federal Health Care Tax Credit (HCTC).
* 65% tax credit for insurance premiums for workers who lose jobs due to trade agreements, and pension benefit guarantee program individuals.
* Can be used for 10 different coverage options.
o Three options already exist
+ COBRA coverage
+ spousal coverage if employer pays less than 50% of premium
+ individual coverage, only if eligible individual already had the individual coverage for 30 days prior to losing job
* States have 7 other options they can choose to make available for eligible individuals. States can choose more than one option, or no option. Risk pools are one option.
* As of July, 2004, 37 states had approved insurance plans to accept the HCTC.
* More than 15 state risk pools were among those HCTC acceptance plans.

4. First Federal Funding of State Pool Low-Income Premium Subsidy Program
* Montana awarded special federal pilot grant for $1.25 million to subsidize premiums for people with incomes less than 150% of poverty in the Montana Comprehensive Health Association. Reduces premium by 50% during pre-ex waiting period, 40% afterward. Needs additional legislative funding for future years.
* Much interest by pools in expanding federal funding so that more low income, uninsurable people can be able to afford the higher cost of state risk pool coverage. However, not currently pending in legislation.
* Funding needs to provide for subsidizing the premiums for the individuals, and for the additional losses/deficits that would occur for each risk pool.

5. First Integrated Care/Disease Management Programs Established by Risk Pools
* CoverColorado launches integrated disease management/care management program for members (voluntary participation) with asthma, diabetes, congestive heart failure, coronary artery disease. Joint program with McKesson Health Solutions and CMS Health Integrated.
* Washington, Arkansas, Kansas, Oklahoma risk pools also have joined program.
* The five states have formed the Advanced Care Management Task Force to analyze data and outcomes from program. Other state risk pools are also moving to establish disease management programs for their members with certain chronic illnesses
* Project looked upon with much interest and promise for improved cost and care management for people with high-cost chronic illnesses. No current public funding for this pilot project.
* More than 15 state risk pools now report having some kind of comprehensive disease management program.

For more information:

Contact:

* Bruce Abbe, Communicating for Agriculture and the Self-Employed Ph. (952) 746-6612
* CA’s website - www.selfemployedcountry.org
* National Association of State Comprehensive Health Insurance Plans (NASCHIP) website- www.naschip.org