Healthy Wisconsin Plan Update

Healthy Wisconsin Plan

Senate Democrat Budget Bill Amendment (LRBb0471/4)

The Hamilton Consulting Group

June 27, 2007

Summary

Outlined below are key provisions of a Senate Budget Bill Amendment (LRBb0471/4) relating to universal health care, referred to as the “Healthy Wisconsin Plan”.

Healthy Wisconsin Authority

Board Authority is created to establish, fund and manage the Healthy Wisconsin Plan.
Duties include providing a mechanism to enroll eligible persons, creating a consumer protection program, establishing a dispute resolution process and a binding appeals process for resolving eligibility disputes, accepting bids from health care networks, auditing health care networks and making payments to fee-for-service providers.
Authority is a public body consisting of the following members:

5 nonvoting members (DETF Secretary and 4 health care personnel from a newly created advisory committee) (DETF Secretary serves as chair until voting members elect a chairperson)

16 voting members appointed by the Governor with Senate confirmation for staggered 6-year terms. (4 labor reps, 4 business reps, 1 public school teacher union rep, 1 small business rep, 2 farmers, 1 self-employed, 3 health care consumer organization reps).

Plan Eligibility

Plan is available to any person who meets all of the following criteria:

State resident for at least 12 months

Maintains substantial presence in the state as defined by the board

Under age 65

Not eligible for federal government or foreign government coverage, in jail or in a mental institution.

Not eligible for MA or BadgerCare unless a waiver from CMS has been granted and is in effect.

Any person gainfully employed is eligible regardless of residency requirements.
Dependent children are eligible immediately regardless of residency requirements.
Pregnant women are eligible regardless of residency requirements.
Employees covered under a collective bargaining agreement in effect on Jan, 1 2009 are not eligible to participate until the day the agreement expires or is extended, modified or renewed.
No person eligible for coverage under the Healthy WI Plan is eligible for coverage under HIRSP.
Proponents indicate that the Plan does not cover participants eligible for MA or BadgerCare plus - including expanded populations under the Governor’s BadgerCare plus budget initiative. Section 260.10 (6) in the proposed amendment, however, calls for DHFS to develop and submit a waiver request, for legislative review by July 1, 2008, to provide coverage under the plan for individuals eligible for MA and BadgerCare.

Plan Benefits

Plan to be established by the board to take effect January 1, 2009.
Same benefits as those in effect January 1, 2007 under the state employee health plan, plus full mental health parity and preventive dental care for children up to 18 years.
No cost sharing for listed preventive services (i.e. prenatal care, well-baby care, mammograms)
Deductibles at $300 individual/$600 family per year.
General copayment of $20 for services as determined by the board --- 25% co-pay for specialty services without a referral from the enrollees primary care provider.
$60 copayment fee for inappropriate use of the emergency room.
Drug co-pays of $5 generic, $15 prescription on formulary, $40 prescription not on formulary determined by the board.
Board may adjust any of the copay and coinsurance amounts.
Max cost sharing at $2,000 per individual per year or $3,000 family

Service Area and Contracting - Qualifying Health Care Networks

Board may establish areas in the state for the purposes of receiving sealed risk-adjusted bids from health care networks.
S. 260.01 (3) defines a “Health care network” as a provider-driven, coordinated group of health care providers comprised of primary care physicians, medical specialists, physician assistants, nurses, clinics, one or more hospitals, and other health care providers and facilities, including providers and facilities that specialize in mental health services and alcohol or other drug abuse treatment.
S. 260.30 (4) establishes requirements to be a Qualifying Health Care Network, which include

(a) demonstration that premium bid is reasonable

(b) will spend at least 92% of revenue it receives on payments to providers or investments to improve overall quality or lower overall cost of patient care.

(c) ensures geographic access to medical providers

(d) ensures 24/7 access to a toll-free hotline and help desk

(e) ensures the selection of a primary care provider,

(f) will provide high quality health care including mental health/aoda

(g) promotes healthy lifestyles and preventive care

(h) develops and implements an incentive program to increase cost/quality transparency, ensure the confidentiality of medical information and advance appropriate use of technology

(i) has entered into shared service agreements with out-of-network specialists and facilities

(j) has a comprehensive electronic records tracking system and provider payment system

(k) has safeguards against conflicts of interest

(L) has been organized by physicians or other health care providers, a cooperative, or an entity whose mission includes improving the quality and lowering the cost of health care

(m) agrees to provide the benefits specified except that a health care network may limit the number of new enrollees it accepts if the network certifies that accepting more would impact quality of service - also allows an affinity group to limit participants to a specific group, such as farmers or teachers, if the affinity group was in existence as of December 31, 2007.

In each area designated by the board - the board shall offer both a fee-for-service option and an option to enroll with one or more qualified health networks that meet the above criteria.
Under the fee-for-service option - the board with the assistance of one or more administrators chosen by competitive bid process shall pay the provider rates established by the board. S. 260.30 (8) provides for incentive payments to fee-for-service providers to implement best practices and quality measures.
The state may offer health care coverage benefits in addition to those provided under the Healthy Wisconsin Plan. Similarly, employers and self-insured employers, may offer additional health care benefits outside the plan.

Assessments – Funding

Plan is funded as a sum sufficient appropriation with revenue generated from the following assessments.
Employees = at least 2% but no more than 4% of social security wages. Employer may agree to cover employee share or portion of employee share. Employees earning 150% or less of federal poverty level (FPL) pay zero assessment. Employees with no dependents earning between 150% and 200% of FPL pay a sliding scale between zero and 4% as determined by the board. Employees with dependents earning between 150% and 300% of FPL pay a sliding scale between zero and 4% as determined by the board.
Self Employed = at least 9% but not more than 10%.
Employers = at least 9% of employee social security wages but not more than 12%.
Estimated overall funding of $15 billion - proponents calculate average monthly assessment of $370 employer assessment per employee and $140 employee assessment.
No annual increase in assessment by the board may exceed the percent increase in medical inflation unless a greater increase is provided for by law.
In any year the board determines that health care costs increase at a rate exceeding national averages - DOA secretary shall establish by rule a program to contain health care costs in the state.
Board pays the established fee-for-service rate to providers.
Payments to the lowest-cost qualified health care network in a given area are paid by the board to the network based on the bid and no additional payment is required. If a participant elects a higher-cost network - the participant is required to pay the difference to the board to ensure the network receives the full price bid by the network.
The board may retain a percentage of the dollar amounts established for each participant to provide for payment to networks that have incurred disproportionate risk through the open selection process.