1. The Kansas DMIE: Implications for Health Reform Jean P. Hall and Janice Moore University of Kansas NASMD Annual Conference November 9, 2010 Washington, DC

2. Background  Approximately 200,000 people are enrolled in 35 state high-risk pools nationally  Individuals are uninsurable in the private market due to pre-existing conditions  Health reform legislation created a temporary national high-risk pool, called the Pre-existing Condition Insurance Plan (PCIP) beginning in July 2010 and running through December 31, 2013

3. Current State High-Risk Pool Plans  Steep premiums that increase with age; range from 125 to 200% of individual market rates for the state  High levels of deductibles and co- insurance; similar to other individual policies  Limits on some benefits, such as preventive services, prescriptions, and mental health  In Kansas, no coverage for adult immunizations, dental, vision, hearing, contraception, or obesity treatment

4. The Kansas Demonstration to Maintain Independence & Employment  Randomized controlled study funded by the Centers for Medicare and Medicaid Services  Tested the hypothesis that provision of comprehensive benefits to HRP enrollees could prevent or forestall disability  Kansas HRP participants historically transition to SSDI at a rate 8 times that of the general population  Intervention provided Medicaid-like services as wraparound, with enhanced benefits and greatly reduced out-of-pocket costs

5. Methods  Kansas Risk Pool participants ages 18 to 60, working ≥40 hours per month, with a potentially disabling condition  416 individuals in three cohorts  Six baseline focus groups with total n=42 (10% sample, self-selected)  Telephone surveys with entire sample assessing health status, work efforts, medical debt, experiences with risk pool  Analysis of claims data

6. 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 a four-year degree or higher  29% report medical debt

7. Claims and Survey Data Findings: Co-morbidities* * Based on baseline claims and self-report Musculoskeletal52% Diabetes29% Mental Illnesses36% Cardiovascular32% Neurological Disorders16% Respiratory20% Cancers19%

8. Focus Group Findings: 3 Themes  High premiums and deductibles limit ability to afford even basic services  Prescription costs are particularly problematic and compliance is poor  Delay or forfeit strategies increase stress and diminish health and quality of life

9. High Premiums and Deductibles  Choose higher deductibles to obtain affordable premiums (more than half >$2500)  Delay or forgo care including diagnostic, preventive, and treatment  “Save up” visits and surgeries until they meet deductible  Stop care at start of calendar year

10. Prescriptions  Use free samples, generics, double-dose whenever possible  Refuse, delay, reduce dosage, skip doses or use drugs no longer prescribed  “I cut my insulin in half.”  “Now that I’ve gotten the lower premiums and can afford the medication, I take the pills every day exactly like they’re written on the prescription bottle and check my sugar three times a day like I’m supposed to because even the little box of strips can cost $85 a box.”

11. Increased stress  “If somebody says you ought to do this [medical test] and you’re saying I don’t think 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 on people.”  “You’re going ‘is this other pain something I should have gotten tested?’ I couldn’t afford it, but you know you worry.” [from a breast cancer survivor]

12. 12 Many are underinsured  53% have deductibles > 5% of family income  38% have out-of-pocket expenses >10% of family income for self & family  72% have one or more of these indicators of underinsurance  With a deductible of $2500, people with an annual income less than $50,000 are considered underinsured

13. Discussion and Implications  Most in the study were well-educated and middle class; they knew they needed services and medications but could not afford them  Underinsurance may be as big a barrier to access as uninsurance, especially for people with chronic conditions  When provided DMIE benefits and relieved of cost burdens, participants increased use of medically appropriate services and had better outcomes

14. Service Utilization Service Type Intervention Group Control Group Prescriptions96%80% Diagnostic/Preventive97%88% Office visits98%86% Medical equipment18%7% *Intervention group utilization significantly different from control at p<.001

15. PMPM costs Service Type Intervention Group Control Group Prescriptions275200 Diagnostic/Preventive216180 Office visits*5532 Medical equipment*195 Total1161880 *Significantly higher, p<.001 Average total annual allowed costs: Control Group: $10,560 Intervention Group: $13,932

16. DMIE Health Status Outcomes

17. The PCIPs  Coverage level is similar to that of Bronze coverage in the Exchange  Premiums are less than in many state high-risk pool plans, but participants are still likely to be underinsured  PCIP eligibility requires being uninsured for 6 months prior to enrollment; some enrollees will have pent-up need

18. Implications for Health Reform  People with chronic conditions or disabilities who are self-employed or do not qualify for employer-sponsored health care will likely acquire insurance through the Exchange.  If the Exchange expands coverage primarily through plans with high cost- sharing, the benefits of coverage may be muted.  Participant experiences with the PCIPs may provide insights into possible improvements for Exchange coverage.

19. Example from the Exchange  Individual age 50 and income at 435% of poverty level ($50,000)and $10,500 in medical costs:  Annual premiums=$6978* (14% of income)  Annual out of pocket = $4,900 (9.6% of income) assuming $2500 deductible and 30% co-insurance**  Cost of premiums + OOP = 23.6% of income * Premiums from the Kaiser Family Foundation on-line calculator; **Bronze level coverage has a minimum 60% actuarial value.

20. 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