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Utah Health Insurance Association

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					Utah Health Insurance Association
2008 Education Conference
Panel Discussion
November 13, 2008

Chet Loftis                 Moderator, Regence BlueCross/BlueShield of Utah
Senator Sheldon Killpack    Utah Senate
Dr. Norm Thurston           Governor’s Office of Economic Development
Ryan McDermott              Utah Health Underwriters Association
Representative Jim Dunnigan Utah House of Representatives

Mr. Loftis thanked the panelists and said the 2008 Utah Legislature passed a bill, HB
133, which set up a task force and six areas to study regarding health care system reform.
He noted there were five working groups working over the summer and providing
information to the Health Care Reform Task Force. He reported that on November 11,
2008 the task force reported their findings and announced a blueprint for bills for the
2009 legislative session. He stated he had some notes from that meeting adding the first
area was health insurance reform, the second area was marketplace innovation, the third
area was state contracting practices, and the last was medical malpractice amendments.

Mr. Loftis announced he would like to provide each panelist an opportunity to share their
perspective on where they felt the reform effort was going and then give the balance of
the time to the audience for questions.

Senator Killpack noted HB133 began with a dialogue with Rep. Dave Clark about the
goal of creating a health care system where there was more accountability and
transparency, which was a useful tool for individuals and one he felt was a key to helping
people make better decisions. He stated many of the transparency ideas were already in
process and many people had been following what had been happening. He said the
Legislature would review legislation and the first steps to reforming the health care
system in Utah. He added he thought that if Utah continued down its current path,
despite being in a better position than most states, the trends would not be good for
individuals in health care. He said it was something that would either change with
legislation in Utah or with legislation from elsewhere and he would prefer the change
come from within in a way that would work for Utahns. He stated that although change
was uncomfortable it was inevitable.

Dr. Thurston said he would like to echo Senator Killpack’s sentiment and said the
Governor’s office and legislative branch had been working together. He said it was a
pleasure to work with the task force and see their willingness to create reform. He added
there were many aspects to health care reform and thought a lot of time today would be
spent discussing health care insurance but he wanted to address a couple of ideas they
had been using as a working template for measuring progress in terms of health insurance
reform. He noted what GOED thought should be done with regard to modernizing the
health insurance system was to have the following goals in mind. He said health
insurance should be paid for with pre-tax dollars, a gift from the federal government that
should be taken advantage of where possible. He added policies should be chosen by the
consumer re-emphasizing their roll in being responsible for their choices and held
accountable. He stated health insurance should be portable from job to job and
consumers should be able to develop a long-term relationship with an insurer, which
would encourage responsibility for their health due to longevity. He noted everyone
should be able to buy health insurance and be guaranteed choice. He stated there had to
be something done to maintain broad-based risk pools in the system. He said the trend
was to underwrite everyone for every thing and there was no risk left for the insurer to
bear. He noted some feared genetic testing because there may come a time when a baby
was born that a genetic test could be run that would tell someone what they would cost
the system for their life and then charge them for it. He said insurance was about sharing
uninsurable risk across large groups and the final goal was making sure insurance plans
had elements incorporated for proper incentives to help people make better choices and
have better outcomes.

Mr. McDermott reported he had been involved in the health care debate about eleven
years and participated in helping the UID apply for the first 1115 waiver that allowed the
covered at work program (UPP). He noted Tommy Thompson came here for a signing
ceremony because it was such a great idea to help low income people get coverage. He
said producers lived in a competitive world and were tasked with bringing their clients
the lowest cost insurance or else lose their client. He stated producers put pressure in the
system to find low cost and best value and brought ideas to the system to infuse
competition in other areas of health care. He said he was concerned with competition and
finding ways to lower the actual core cost of health care. He added that if there was no
way to lower the costs there was nothing that could be done to lower the premium and
producers added value because they continued to put pressure on that aspect of the reform
discussions. He noted the presentations illustrated Utah was doing a pretty good job, not
just in delivering, but also the providers. He added there was a level of integrity in the
system that he would suggest building upon it rather than turning it upside down and
chance losing what was good and working in the system.

Rep. Dunnigan reported he had learned a lot in the discussions he had over the summer
regarding health care reform with experts in the field. He said that many of the
challenges and problems with the health care system in the US were not as bad as in other
parts of the world and Utah was even better on average that most states in the US. He
agreed there needed to be reform but proponents also needed to consider the things that
were working well and focus on finding ways that would make it better instead of just
doing something to look like something was being done. He said a barrier to health
insurance coverage was cost and the underlying costs had to be addressed. He added the
reform could not just be about financing, about who was paying or how many was
paying. He said nothing would be accomplished if the underlying costs were not
addressed. He stated there were a number of things that could be done to address those
costs and although Utah was doing better than many states there were some areas that
could be done better. He said there was a real opportunity to make a difference and once
costs were addressed premiums would come down.
What’s going to be the impact of health care reform on agents?

Senator Killpack stated health care was extremely complicated and he finds it difficult to
wade through the paperwork. He said that process had to be simplified and it was
convenient to have agents who knew how to navigate the system. He added the system
could not be reformed without agents and brokers because their expertise would be vital.

Mr. McDermott said there had to be transparency and it would be nice to know how
much health care services actually cost.

Dr. Thurston said that transparency was critical, and uninformed consumers could not
make good decisions. He noted HB133 from last session set into motion some
transparency requirements, such as establishing the all payer database. He said data was
being collected on bills noting that what was billed had very little to do with the actual
cost. He hoped the database would give better information about the components of
episodes of care, what they cost, and who was being paid how much. He said they were
working on transparency of patient information noting often patients ended up at different
providers and were given duplicate tests because the records could not be transmitted.
He said the clinical records bill would allow patient records to be transmitted
electronically to avoid duplication of services and those were just two systems being put
in place to make the information available.

Mr. Loftis said the all payer database was a back-end transparency system and
wondered if there was going to be a front-end transparency system put in place.

Dr. Thurston replied the data now being collected would be made available to all to help
everyone begin to get an understanding of where the costs were coming from. He added
they were not sure where to go from here because no one knew what the problem was but
once the data showed where the costs were coming from, better decisions could be made.
He said consumers wanted to know not just actual prices but the difference in prices
depending on where they chose to get the service.

Mr. Loftis asked if Dr. Thurston thought providers would actually provide those
prices at the front end?

Dr. Thurston said he hoped so. He said he saw a presentation that said a patient would be
able to know at the time of service what it would cost them. He wondered how many
patients knew in advance what it would cost and if there was somewhere they could get it
for less. He hoped the all payer database could help get to that point.

Rep. Dunnigan stated price was important but outcome was also important. He said one
doctor might use the most advanced technology and provide the best outcome but it
would cost more than someone that used outdated technology but charged less. He added
that needed to be weighed against the cost.
How do you develop a true transparency system when in most cases the provider
themselves did not know what they were charging because it depended on the
contract with the insurance carrier?

Rep. Dunnigan said the transparency piece was the part that caused the most
consternation and as outcomes are discussed there are variables from hospital to hospital.
He said it would be interesting to see how it unfolded. He noted a lot of the ideas mesh
together with people having more personal responsibility in putting together their plan
and the burden of decisions regarding procedures they had done. He stated there were
many procedures that were not covered, such as laser eye surgery, and the cost of those
had come down and technology had increased because individuals had to shop for that
procedure and decide who would give them the best outcome. He added transparency
was just one piece of how health plans would be structured and individuals would have to
be involved in the process.

Mr. McDermott reported UAHU held a conference last week with a speaker from
Prometheus, a foundation granted research money to look at episodes of care pricing and
lumping together procedure codes for one episode, such as knee surgery, to get one price.
He added the question was how to couple procedures together so that someone could go
to a doctor and get a price for a procedure or episode of care and how to get providers to
work together as a team. He stated no one could force providers to work together, but
there were provider groups in other states that were doing it and offering warranties on
their surgeries figuring out how to work together better as a team to accept risk for
possibly avoidable conditions. He said if the provider community could take that leap of
faith and be willing to accept a global fee it could be reality.

How successful do you think the Legislature can be in lowering the number of

Dr. Thurston stated areas had already been identified where they know they can make a
difference, such as enrolling children who are eligible for public programs. He noted the
Governor had made insuring children one of his four immediate priorities and wanted it
done now. He reported the Governor also had a proposal working with the Board of
Regents to help more college students want to buy health care. He said he would also
like to make health insurance more available through employers and keep it available
through the employers that already offered it. He said he thought there was a chance to
make a significant dent in the number of uninsured with the next two to three years.

Mr. McDermott said that from his time working with the DOH the issue of the uninsured
was on his mind constantly. He said he often spoke with people who enrolled themselves
but did not enroll their spouse or children and he talked to them about CHIP. He noted
the broker community knew that it was a real problem. He added the debate about health
insurance needed to be broken into two pieces. He said there was one big piece, the cost
of health insurance premium, and the question was how to slow or stop the rate of growth
in premium so employers could continue to afford their plans and provide benefits for
their employees. He said the other side was those people who just could not afford it. He
added when you discussed those people there was an issue with the definition of
affordability. He noted there were people who had enough income but made an
economic choice not to buy insurance and the question was if those people should be
forced into the system with a mandate to purchase it or if it was their personal
responsibility to do it. He stated there was another segment of the population that had a
choice to make between food and insurance. He said those were the people he thought
could be helped with programs like UPP (Utah Premium Partnership).

Mr. McDermott reported Dr. Thurston had sent him an email in the summer that said
there was about fifty-five percent of the State’s uninsured total that were currently
eligible for an assistance program through the State. He said he was frustrated to some
degree because if the time had been spent through the summer finding those people the
number of uninsured could have already been reduced by half, theoretically. He added he
thought there were already a lot of good mechanisms in place in Utah and his biggest
concern was that if costs were not controlled the State would never get to those people
who could not afford and coverage would not ever be affordable for employers. He said
there were two problems, the cost and how to use tax base to get to those people that
could not afford it and hold them accountable for the assistance they were receiving and
working to eventually be self-reliant.

Senator Killpack said it was interesting because it was not just State policies legislators
were working on. He added personal accountability came into play. He said he heard
stories from personnel at hospitals where they told an individual they qualified but the
individual does not sign up because it would require filling out paperwork; the federal
government left a gaping hole in terms of personal responsibility. He said it was more
work to get coverage free if they get on the program. He added any piece of legislation
could be shot down but a lot of states have only looked at access and have not addressed
costs. He said that costs had to be addressed and it would not be quick or painless. He
added the only way to get costs down was to have people interact with the system.

Rep. Dunnigan said he thought some meaningful strides could be made to cover the
uninsured but underlying that was some federal policies, such as not turning anyone away
from an emergency room. He added Medicaid was good in that it helped lower income
people, but it had to be designed to help prevent over utilization. He stated the federal
government had handed states some difficult parameters to work within and other
regulations to work with such as COBRA and HIPAA. He said entire industries had to
be created to help employers comply with federal regulations. He noted he told Senator
Bennett earlier this year that the federal government had given states so much regulation
not much more could be taken on. He reported the federal government had just passed
mental health parity and that would drive up the cost of health insurance even more. He
said the federal government needed to let the states be innovative.
Rep. Dunnigan said community health centers did a great job and consistently got high
marks for patient satisfaction but they were overwhelmed with uninsured people. He
noted that many of the children seen in these centers qualified for CHIP and they had
people whose job it was to get them signed up but their parents would not do it because it
would cost them $10 per month to cover them. He said they were willing to take the
gamble that they would not have to visit the clinic often enough to justify $10 per month.
He stated that defining affordable when there were options for “free” care made it a real
challenge but strides could be made in areas such as college-age kids. He said he and Dr.
Thurston had talked about the young immortals being required to take at least a
catastrophic plan and giving people an affordable option when they left employment,
such as Net Care, a product he had been working on through the summer. He noted the
Net Care product would be fairly decent coverage that would be between one-third and
one-half as much as current products so people could be covered until they found other

What options will be available for uninsurable people? Will more carriers have the
option to carve out uninsurable conditions to make coverage available for
everything else?

Rep. Dunnigan said he knew that was a common problem and something that had been
done over the last year or so was to allow carriers to exclude or write out specific
conditions. He noted there were other carriers that would like to do that but they had
systems issues with regard to capturing claims data with policies that had riders. He
added that was a tool that should be used more and perhaps legislatively there needed to
be broader ability to self insure for specific conditions that could be carved out of a full
coverage policy. He stated another help was the increase to the point threshold for HIP,
which required the carriers to assume more risk before sending someone to the HIP Pool.
He noted Utah was a guarantee-issue state adding the State subsidized about thirty
percent of claims for high risk individuals in the HIP pool. He stated if there were
concerns about HIP being affordable perhaps the State should chip in some additional
funds to make it more affordable.

Rep. Dunnigan said he had another idea that he had only briefly discussed with carriers
about how to capture those people who did not feel they were sick enough to go to HIP
and pay that higher premium, but were not healthy enough to qualify for an individual
plan. He asked if they could be offered an individual plan where pre-existing conditions
would not be covered for a period of time. He said agents ran into people who only
wanted coverage when they had been prescribed expensive medicine or had a new
condition that required extensive treatment. He wondered if there could be a policy that
could cover people for new conditions but make them wait longer for a pre-existing
condition so that people who were trying to game the system would be discouraged and
those waiting to join the system would have a set time period that allowed them to
someday rejoin.
Mr. Loftis asked the panelists if there was one thing they expected to happen in
health or one thing they would like to happen in health care.

Dr. Thurston reported HB133 required the DOH to submit a waiver so the UPP program
could be used for individual policies as well as HIP Utah. He said he was hoping that
would be approved soon so that not only would there be a state subsidy of lower
premiums but also the possibility of using Medicaid dollars to lower the premium even
more. He added if the waiver was approved UPP money could be used for COBRA
policies as well.

Senator Killpack said that as the legislation was moving forward it would be interesting
to see how it all played out. He added he knew there were people that any legislation
would not work for but he hoped they could determine what would work best for the
majority of Utahns and try to get costs under control. He said he hoped there was a spirit
of cooperation noting it would not be easy for anyone, most of all for individuals because
it would require more personal responsibility and accountability. He added individuals
would not be able to pay pennies for a dollar’s worth of service because it would not
carry long term. He said he hoped people would be true friends as they came out of the
reform process and moved forward. He then excused himself.

Dr. Thurston said he hoped Utah would start moving down the path towards proper
alignment of incentives so people who were bearing the costs would receive the reward
of their decisions. He stated that if people could start down the path, incentives and
behaviors would align to reduce their costs and he hoped to get that process moving.

Mr. McDermott said he was frustrated when individual clients were declined especially
when it seemed their conditions did not seem to be that severe and at the same time he
had a healthy respect for the principles of risk management that allowed carriers the
freedom to decline so that the other people could be covered and financed so the system
remained solvent. He noted it was a perplexing issue for him because he knew it was
necessary in the market. He said he hoped for a system where if someone currently had
coverage that they carried for a long period of time, whether it was group or individual,
and they were applying for coverage with another carrier, especially in the situation
where they had been laid off, that there be some kind of special allowance made for a
lighter underwriting standard to allow them get new coverage. He stated he understood
carriers could not step past the line and become irresponsible and risk management, to
some degree, had to be protected. He added if the government stepped in and enforced
guarantee issue, the government had to accept responsibility for a carrier that might fail.
He said he thought that was happening at the national level to some degree and that was a
concern to him. He added he would like to see the carriers adjust their practices to
accommodate the situations where reasonable. He noted at the same time someone that
had not carried insurance he could understand the door was closed to him.

Mr. McDermott stated the HIP pool was sometimes underestimated in its roll to keep the
rest of the market healthy and keep the premiums down. He said he thought there were a
lot of wise people in the process that helped establish a market that worked pretty well.
He noted there were things that needed to be worked on and corrected and he thought
work would continue to find solutions. He said his wish was for people that lost their
coverage by no fault of their own that the carriers might work to help keep them covered.

Rep. Dunnigan said one thing he would like to see come out of health care reform was a
strengthened market-based system with less government mandates and requirements and
encouraging people to take more responsibility for their own health. He noted that
behavior was the most significant determinant of health status with over fifty to sixty,
maybe seventy percent of health care costs attributed to conditions related to smoking,
drug and alcohol abuse, obesity, and other preventable conditions. He added he would
like to see people get incentives for controlling their blood pressure and blood sugar;
incentives to be healthier. He said that needed to be done in our society. He noted that a
large number of children had arteries that looked like forty-five year old people and that
was not good. He stated if people could get healthier with incentives to lower their
premiums or a lower deductible they would not utilize as much and that would help to
lower the costs.

How can the number of uninsured be broken down to reflect how many really could
not get insurance versus those that chose not to have it?

Dr. Thurston reported that the vast majority of uninsured were somehow connected to a
job in some way as a worker or a dependent. He noted another half already qualified for
public assistance in some way and the question was how to get them enrolled. He said
part of it was affordability and understanding there was an element of choice for those
that could, but for some they had to choose between insurance and rent.

Would you consider the same approach to individual policies as you do with group
policies with guaranteed issue?

Mr. McDermott said Hawaii implemented a universal coverage program for children. He
said after nine months it busted their budget so it was cancelled. He added there had to
be a delicate balance. He noted some of the countries that were doing well had found the
balance between government programs and the private market. He said the private
market put pressure to be competitive and government was compassionate, but a system
that pushed toward government doing it all was less competitive, less innovative and
potentially less compassionate as well. He stated that after long meetings the process was
worth it to do the very best for society, for clients, for our own families. He added a
universal solution was the answer. He said that it was a slow process and jumping to one
thing or another would cause too much disruption and create bigger issues to fix later.

Rep. Dunnigan agreed there were many challenges. He noted there was a Milliman study
in states that had guaranteed issue and community rating and what they found was the
number of carriers decreased in those states because it was hard to legislate that they had
to take high risk and lose money. He said the largest personal plan health carrier in Utah
would likely lose money this year and guaranteed issue would make them lose more
money. He added if the individuals in the HIP pool were sent out to the individual
market everyone who currently had an individual policy would have an increase in their
premium. He said people start to make decision about if it was worth what they paid and
he would prefer the State subsidize the highest risk people so the rest of the market could
offer lower premiums. He noted other states had tried the guaranteed issue approach and
so far there had not been any success.

Mr. Loftis thanked the panel members for their time and comments and the conference
was adjourned.