1. Premium Assistance: Evolution of Programs and New Challenges
Jeremy Alberga
Senior Manager
SCI Workshop for State Officials
June 28-29, 2004

2. Goals for Premium Assistance (PA) Programs
Leverage employer contributions
Keep family members together
Limit Crowd-Out
Ease transition from public to private coverage
Strengthen private insurance market
Platform for future program expansions
Eliminate “stigma” of public program

3. What Problems Are You Trying to Solve?
Different problem requires different solution…
Problem: Coverage offered by employer but not taken up by worker
Solution: Subsidize employee premium
-or-
Problem: Employer doesn’t offer coverage at all
Solution: Create affordable product targeting employers and workers

4. PA Strategy 1: Address Employee Take-up
Typical Wage in Firm
Average Take-up Rate
Less than $7/hr.
78%
$7-$10/hr.
86%
$11-$15/hr.
89%
More than $15/hr.
Total
87%
Currently operating premium assistance models pay the employee’s contribution for qualifying employer sponsored insurance when it is cost-effective
Employer coverage must be available
Need information on employer plan
ESI must meet program rules (benefits, min. employer contribution, cost effective)
Note: The take-up rate is the percent of employees in a firm who enroll in a plan offered by the firm. All estimates are weighted by the number of employees in the firm.
Source: RWJF Employer Health Insurance Survey, 1997

5. Challenges to Date Availability of employer coverage
Administrative complexities
Start-up costs
Identify potential enrollees
Coordination with employers
Wrap-around requirements
Assessing cost effectiveness
Availability of employer coverage
Low employer contribution for dependant coverage
Employer reluctance to participate
HIFA flexibility aimed at reducing administrative complexity and allow greater participation
Today will hear from RI, one of the PA pioneers in addressing these challenges successfully

6. PA Strategy 2: Address Employer Offer Rates (Offer Rates by Firm Size, 1996-2003)
Source: Kaiser/HRET Employer Health Benefits 2003 Annual Survey

7. Premium Assistance: The New Breed
Create a new product, targeting working uninsured
Target either employer or employees
Challenges
Coordinating with carriers, other stakeholders
Avoiding adverse selection
Finding new funding sources in difficult times
Controlling rapidly rising costs
ARKANSAS
Purpose: To provide “safety-net” coverage for uninsured employed individuals (< 200% FPL).
Targets 2/3 of small businesses (currently not offering group health insurance)
Employer participation is voluntary
Conditions of program participation for employer
Employer must not have offered health insurance for prior 12 months
Employers commit to achieve 100% employee/spouse coverage

8. Ongoing Technical Assistance
Premium Assistance Toolkit (with CMS, NASHP)
First three sections written (program costs, design, benefits and cost-sharing)
1-day PA mtg. at NASHP Annual Conference, Aug. 1-4
Dissemination of lessons learned from 8 demonstration grantees (AR, HI, ME, NM, OR, RI, VA, WV)
State Reports: 101 individual state and multistate reports [keyword=“premium assistance”]