Employer Update

Efforts To Cover the Uninsured An Opportunity for Health Plans

Employers and state governments are getting together to design imaginative programs to cover low-pay workers.

MargaretAnn Cross

When large employer members of the HR Policy Association sent out a request for proposals asking health plans to design a product for their uninsured part-time workers and contractors recently, plans' typical response was a quizzical but interested, "Huh?" says Marisa Milton, associate general counsel and director of health care policy for the trade group for human resource executives.

Insurers did respond to the RFP, and the result is the National Health Access program, which will be launched this fall. Companies will offer access across the country to a range of products from UnitedHealth Group, Humana, and Cigna. Options will include everything from access to discounted provider networks to coverage that includes inpatient and outpatient care. Employers will not contribute to the premiums that the workers pay for the insurance, but the coverage will be employer-based, meaning workers will not be subject to medical screenings or long waiting periods, as they often are when they attempt to purchase insurance individually, Milton says. How many people will be eligible is unclear, though initial estimates put the number at about 3 million.

National Health Access

"This is unique," Milton says. "It will be a learning process, but we are hoping that it ends up being something that can help a lot of people."

With the number of uninsured in the United States at about 45 million and health care costs continuing to rise, employers today are increasingly interested in playing a role in solving the problem, says Robert Galvin, MD, director of global health at General Electric, one of 20 companies that are committed to offering the National Health Access insurance to workers. "If you are really going to wrestle this health care cost problem to the ground, you are going to have to go about it in many different ways. One of the ways that has been neglected is the impact of the uninsured. We're very aware that when uninsured folks need medical care, they get it. And because the hospitals and doctors aren't paid, costs are shifted to employers. After many years of sustained cost increases, employers are looking at more than just cost sharing with employees and changes in benefit design to reduce costs. This is part of the whole solution."

Proactive employers

As employers work together — and with state governments — to test new ideas to offer coverage, the trend could mean health plans will be fielding more innovative RFPs.

"This is not easy work for health plans; we are creating something new," Galvin says. "But for them, it means more customers. More people covered means more enrollees for them — 45 million is a big number. And though the cost of caring for the uninsured ultimately comes through to employers, it doesn't make it any easier for plans that have to talk with us about raising rates because of a system that has 45 million people uninsured. I do think there is opportunity for more of these innovative pilots in the future" (see "Small Pay Means Small Plans for More and More Workers.").

The National Health Access program has the potential to translate into similar efforts by regional or statewide employer coalitions, says Christopher Queram, CEO of the Employer Health Care Alliance Cooperative, a coalition of mid-size employers. The project is an example of employers being proactive, in part because of a concern that if the private sector can't address this problem, it is more likely that the government will expand its involvement in health care, he says. "Some of these large employers are very devoted to market-based approaches and want to maintain a market-based orientation for health care. Mid-size employers feel the same way."

Employers' activity is also rooted in their belief that health care coverage is an essential component to a productive workforce, says Sara Collins, a senior program officer at the Commonwealth Fund. Nearly 60 percent of companies, including more than half of small firms, believe it is important for employers to provide health care coverage to their workers, the organization found in a survey. More than half of employers prefer requiring employers to offer coverage as a way to decrease the number of uninsured Americans over public program expansions, Collins says.

State initiatives

Many states are designing programs that help companies offer more affordable coverage to low-wage workers, who may decline insurance because they can't afford the premiums. Some states are picking up the tab for health care claims that exceed specific dollar amounts for certain workers; others are paying part of low-income workers' premiums, and others are negotiating directly with health plans to lower the cost of health care for people who are employed but who qualify for state assistance.

"States are using a variety of strategies to lower the cost of coverage and keep employer dollars in the mix," says Jennifer Edwards, director of the State Innovations Program at the Commonwealth Fund.

In New Mexico, where about 22 percent of the population is uninsured, the state's efforts have taken on a new urgency, says Matthew Onstott, deputy director of the state's medical assistance division. Gov. Bill Richardson has backed an initiative called Insure New Mexico that seeks to decrease the number of uninsured in the state, in part by increasing the ability of small businesses to offer health insurance to their employees.

The state has designed a program to subsidize employer-based health care coverage for employees whose earnings place them at 200 percent or below the poverty level. The state issued an RFP and accepted bids from three of the state's largest insurers, Molina Healthcare of New Mexico, Lovelace Community Healthcare, and Presbyterian Health Plan.

Each will work with small businesses to provide a comprehensive plan that covers inpatient and outpatient care, preventive care, pharmacy costs, diagnostic testing, and behavioral health. Employers will pay $75 per month toward the premium for each worker; employees will pay up to $35, depending on their income, and state and federal funds will make up the difference, says Mari Spaulding-Bynon, program manager for the State Coverage Initiative.

In selecting the health plans, the state "evaluated the managed care plans' ability to coordinate this public-private partnership as well as their network capacity," says Spaulding-Bynon. All of the plans had participated in public programs in the past, she adds.

State support and employer interest occurring at the same time may bode well for new approaches to covering the uninsured. Wisconsin's Queram says employer efforts in the past have been thwarted by a lack of cooperation among stakeholders. "Our experience in Wisconsin in trying to increase access to health care has really been marked with more failures and frustrations than successes.

"Employers, health plans, providers and the public sector all need to come together and take a hard look at what would be required to make insurance more affordable."

MargaretAnn Cross, a Managed Care contributing editor, covers purchaser and other issues from her home in Michigan.

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