Tanya Alteras, Sharon Silow-Carroll
HRSA State Planning Grant Update: A Review of Coverage Strategies and Pilot Planning Activities, Sharon Silow-Carroll, M.B.A., M.S.W., and Tanya Alteras, M.P.P., The Commonwealth Fund, April 2005
It is expected that at the end of the pilot planning process, states will have a blueprint to implement the pilot.
Summary of SPG Activities and Results
The breadth of the State Planning Grant program is reflected in both the number of states and territories that have received SPG support, and in the range of activities conducted and policy options considered. The in-depth research being conducted by the grantees offers a window into state-specific circumstances, challenges, and approaches. At the same time, a review of the states' activities illustrates a number of commonalities across the states in terms of factors contributing to uninsurance, effective methods of consensus building, and potential models for addressing the problem. An examination of the strategies being pursued (as well as policy options that have been rejected or postponed) reflect the difficult economic times and states' inability to devote significant public funds toward comprehensive expansion strategies.
Data Collection and Analysis
In conducting data collection and analyses, most grantees fielded employer and/or household surveys to gain a greater understanding of coverage, access, and the makeup of their uninsured population. Some conducted analyses to determine the costs incurred by the health care safety net in serving the uninsured, and potential savings or "offsets" from expanding coverage. Many states also conducted analyses using existing Medical Expenditure Panel (MEPS) and Current Population Survey (CPS) data specific to their state. Focus groups with employers, individuals, and providers were commonly used to dig deeper into several key questions, such as why some employers do not offer coverage, or why employees do not take up coverage that is offered, and what it would take to change their decisions.
Policy Development and Consensus Building
Policy development and consensus-building activities, though described separately in the following profiles, are inherently linked. The activities themselves varied widely across grantee sites, but most involved stakeholder representatives coming together through special committees and task forces in order to:
Because grants were awarded at different times, and because political and financial circumstances varied across the nation, each state is at a different stage in the process of policy development. The profiles taken as a whole illustrate the evolution of this type of activity. Some states are still focusing on collecting data, identifying potential expansion strategies, and building coalitions, while a few have passed legislation on specific reforms and have begun the implementation process. Some states admit the need to place more aggressive reforms on the "back burner" until the economy improves.
In general, the state SPG activity summaries indicate an acknowledgement that an overwhelming majority of uninsured are either full-time or part-time workers, so policies designed to reduce the uninsurance rate must address the problem from that context. That is, most states are actively exploring strategies that build on employment-based coverage, generally through some type of publicly funded premium assistance. Some states uncovered support among employers and providers for the use of tax credits to subsidize the employer and/or employee share of the premium. Others are exploring premium assistance through Medicaid and SCHIP. This trend is illustrated in one state's finding that a majority of employers surveyed thought improving access to insurance should be a higher priority for the government than expanding access through the safety net.
In addition to employment-based strategies, other policy options being explored include:
Also, some states are pursuing efficiencies to be better able to maintain or expand coverage, through such strategies as enhancing primary care services for indigent populations, or designing case and pharmacy management programs for safety net health centers. Thus, despite limited state budgets, a number of states are using the SPG process to create new strategies or combine approaches in new and innovative ways.
Although the range of strategies studied under the original SPG process was quite wide and spanned the public-to-private and incremental-to-comprehensive spectra, it is interesting to note that virtually all of the proposed pilots involve incremental reforms that build on employer-sponsored insurance (ESI). Most target uninsured, low-income workers and small businesses, and involve some type of premium-assistance strategy. Three of the states specifically refer to developing the "three-share" model, which involves a third funding source that supplements employer and worker premium contributions toward employer-based coverage. The pilot planning process will help these states identify and develop financing strategies for that third share, with two of the states stressing the importance of community-specific plan designs and funding sources.
Two states plan to assess reinsurance mechanisms to help make coverage more affordable to uninsured workers and their employers. And at least two Pilot Planning grantees will pursue small-group purchasing pools (one specifically through association health plans) to help make insurance more accessible and affordable to employers. Other premium assistance mechanisms that will be examined include public–private funded vouchers, employer tax credits, and high-risk pools.
In the current fiscal and political climate, it is not surprising that the Pilot Planning grantees are pursuing policy options that build on ESI. First, state-specific data analyses have confirmed that many uninsured residents are in families with full-time workers. Second, under ongoing budgetary pressures and escalating Medicaid costs, states are choosing options that leverage their scarce public dollars with employer and worker contributions. Perhaps acknowledging that past premium assistance models have had mixed results, these states plan to design models that fit their specific needs and circumstances. The three-share and employer-subsidy models also reflect an understanding that employers, as well as low-income workers, need financial assistance and incentives to purchase coverage.
Two of the nine Pilot Planning grantees are combining strategies that will build on employer-based coverage with options that target other populations. One will develop a strategic plan to enhance the primary care infrastructure for those utilizing the safety net—through Medicaid or safety net expansions (e.g., federally qualified health centers). Another would address a problem of "underinsurance" by expanding its PPO network and creating a single plan for Medicaid and Medicare enrollees. For a summary of states' policy strategies.
Following this introduction is a set of concise summaries of SPG activity, as reported in the grantees' most recent reports submitted to HRSA. Each state summary includes the following attributes:
Also included are summaries of the pilot planning projects awarded to a subset of states and territories, based on the states' grant applications and a review by HRSA officials.