State health plan is slow to sign up uninsured adults
Posted on Sunday, November 30, 2008
Approaching its second anniversary, a state insurance program for low-income workers ineligible for traditional Medicaid has fallen far short of its membership aspirations.
ARHealthNetworks, an Arkansas Department of Human Services program launched in late 2006, has about 5, 000 members enrolled through about 1, 000 companies, according to NovaSys Health, which administers the plan. The program’s predetermined cap rose Oct. 1 to 50, 000 members even though enrollment was only about a third of the old limit of 15, 000.
After covering most low-income children in the state with ARKids First, the agency saw the ARHealthNetworks program as a way to provide basic health insurance for some of their parents and other low-income working people, said Julie Munsell, an agency representative.
The department is now considering whether to let self-employed people take part in ARHealthNetworks, which so far has been limited to companies of two to 500 full-time employees.
But officials are hesitant, saying that continued focus on businesses with more employees is a more effective use of money for the ARHealthNetworks program.
Enrollment “is certainly not what you’d hope for, given there’s a much larger population of working uninsured adults,” said Glen Mays, an associate professor at the University of Arkansas for Medical Sciences. “I think it’s safe to say the program hasn’t met full expectations.”
Most similar programs nationwide also have had limited enrollment, experts say.
Ed Haislmaier, senior fellow of health policy of The Heritage Foundation, a conservative think tank, thinks tying such programs to employers limits their success.
“If you have low-wage workers who change jobs frequently, how does targeting the employer solve the problem ?” Haislmaier said.
Haislmaier also believes the programs face a difficult audience. Some uninsured low-income workers don’t want to pay for coverage when they could receive treatment by being considered indigent in the emergency room. And they are approaching companies who already have decided not to offer coverage.
For companies that participate, the program requires all low-income, full-time employees who don’t have individual coverage or coverage through a spouse to enroll. But Mays said some low-income people, particularly young people who are gambling that they won’t get sick or injured, might not want what limited pay they already receive to go toward health coverage.
Other states also have had difficulty stimulating demand for similar programs, Mays said. It’s tricky to design a program that balances affordability with attractive benefits, he said.
RX PROGRAM FAILED The Department of Human Services last year scrapped a drug discount program because of lack of participation. The program, Arkansas Rx, was designed for working-age uninsured people. ARHealthNetworks uses Medicaid money to help small businesses with low-income workers pay for premiums for a limited-benefit health insurance program. Premiums are $ 25 a month for workers whose incomes qualify for a subsidy, and $ 200 for those who don’t. The program is offered only through qualified employers who haven’t offered a group health plan in the past 12 months.
Benefits include six doctor’s office visits a year; seven inpatient days per year; two prescriptions per month; two major outpatient services a year; and a maximum annual benefit of $ 100, 000.
A feasibility study in August said program enrollment would likely increase by 7, 233 to 10, 849 if selfemployed people and their spouses were eligible.
But state officials are concerned that the amount of health-care services used per member — as well as administrative costs— would increase. For one, people who start their own companies have larger appetites for risk, according to the study, and risky behavior can lead to higher health costs.
“The dynamics change drastically, or substantially when you go to an individuals-based program,” Munsell said. For the current fiscal year, ARHealthNetworks is expected to cost about $ 11. 5 million, with about $ 2. 9 million coming from the state’s tobacco settlement money, and $ 8. 6 million coming from federal sources. The program is up for renewal by the U. S. Centers for Medicare & Medicaid Services in late September 2011. Expanding the pool of eligible participants to individuals could raise program overhead, Munsell said, because it takes as many resources to enroll an individual business owner as it does to enroll an owner with several employees.
NO TIMETABLE A timetable for deciding hasn’t been set, Munsell said. The process is being delayed because administrators at the Centers for Medicare & Medicaid Services could change when the Barack Obama administration takes power, she said.
Jonathan Askins, who owns two Larry's Pizza franchises in the Cabot area, signed up for the program about a year ago after he and workers at his restaurants reviewed other plans, which would have taken too much out of their paychecks.
“I would say there are some employees that for the first time in their life... have had health care,” Askins said. “They have had the ability to do a co-pay, or the ability to pay a small amount for prescription drugs.... A couple of them have called me from the pharmacy to say, ‘ This is unbelievable. ’”
The health plan has been a good retention tool, Askins said.
Eight states including Arkansas have programs that use Medicaid dollars to subsidize employersponsored health insurance for small businesses and low-income workers, according to the National Conference of State Legislatures, but the features of each program are very different.
Enrollment in Oklahoma’s program, which offers a more complete benefits package and also offers coverage for individuals, has grown faster after a million-dollar-a-year publicity campaign was launched in October 2007, said Jo Kilgore, a spokesman for the Oklahoma Health Care Authority.
Enrollment grew from 1, 314 in November 2006 to 4, 909 a year later. In the past year, however, the media campaign has helped enrollment shoot up to 15, 505.
Arkansas has been spending about $ 200, 000 a year on advertisements and other outreach.
The department doesn’t plan to increase such spending, Munsell said. Because the plan targets small businesses, officials believe a media campaign targeted at a broad audience would be less effective than for programs such as ARKids First.
The pace of enrollment for ARHealthNetworks has picked up in the past several months, Munsell said, but persuading businesses to join isn’t simple. Even a monthly premium as low as $ 25 is difficult for some to take on.
“Particularly in these economic times... it may be even more challenging for us to convince business owners to offer this to their employees,” Munsell said. One approach, she said, could be to argue that “especially in these times that you want to recruit and retain a productive work force — and productive equals healthy.”
Workers qualify for the subsidized $ 25 rate if they have an annual household income at or below 200 percent of Federal Poverty Level, or $ 42, 400 for a family of four.
Addison Shoe Co., a Wynnebased footwear manufacturer, began using the program in September 2007 after new owners took over.
“Being a new company and just starting out, we were trying to watch our money, but we were trying to offer something to our employees,” said Terresa Holmes, personnel insurance administrator for the firm, a division of NMF Inc.
Noting that there was no exclusion because of existing conditions, Holmes said the program has been “pretty well received,” despite the fact that it only offers six office visits a year compared to unlimited visits under the company’s previous plans.
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