Health Insurance for Utah Children and Small Businesses

November 15, 2006

Expanding Health Insurance Coverage for Utah’s Uninsured Citizens

What is our focus and why?

Nearly 300,000 Utahns are uninsured

This is a problem-A. Most of the cost of uncompensated care is being passed on to Utah’s businesses that provide health benefits to their employees

-B. Uninsured people get less effective and more expensive health care

Over 70,000 of the uninsured are children (0-18)

Over 100,000 of the uninsured work for small businesses

Our two primary goals:-Make sure Utah children have health insurance-Make it easier for employees of Utah small businesses to get health insurance

Who are the 11.6%?

Currently Uninsured (11.6%) 292,800By Age:-Children, Under 19 years old (24%) 71,300-Young Adults, 19 to 34 years old (45%) 132,000-Adults, 35 years old or older (31%) 91,500-Note: Figures in these categories do not sum to the total because of missing values on the grouping variable.

By Employment Status:-Adults, 19-64 with Full-time jobs (38%) 110,300-Adults, 19-64 with Part-time jobs (14%) 43,000-Adults, 19-64 who are Self-employed (16%) 46,700

Utah’s “Most Likely” Uninsured Person:-White male-Between the ages of 19 and 34-High school graduate, with no college degree-Full time job-Household income between $20,000 and $45,000

Key Factors – The Young Immortals

70% of the 11% (205,000) are under age 34

71% of uninsured adults (157,000) have jobs

70% of uninsured workers (105,000) work for small business

There are also many uninsured who are dependents of people with jobs

There are around 25,000 uninsured full-time college students

The Young Immortals are the primary group of free riders in the health care system

Who are Utah’s Uninsured Children?

27,800

24,600

18,900

<100% FPL

101-200% FPL

>200% FPL

By poverty level

Source: 2005 Health Status Survey

Note: 100% FPL = $20,000 a year for a family of four

Who are Utah’s Uninsured Children?

31,000

40,100

Hispanic

Not Hispanic

By Hispanic ethnicity

Source: 2005 Health Status SurveyFigures in these categories may not sum to the total because of missing values on the grouping variable.

Who are Utah’s Uninsured Children?

56,700

14,600

Wasatch Front

Other

By urban or rural location

Source: 2005 Health Status SurveyFigures in these categories may not sum to the total because of missing values on the grouping variable.

Who are Utah’s Uninsured Children?

59,000

12,300

Full-timeWorker in theHouseholdNo Full-timeWorker Present

By full-time worker in the household

Source: 2005 Health Status SurveyFigures in these categories may not sum to the total because of missing values on the grouping variable.

Who are Utah’s Uninsured Children?

17,900

53,300

Less than 1year

1 Year or longer

By length of time uninsured

Source: 2005 Health Status SurveyFigures in these categories may not sum to the total because of missing values on the grouping variable.

Progress to Date

CHIP Expansion and Continuous Open Enrollment – Almost 10,000 more children on CHIP than a year ago

PCN Renewal – Since July 2002, PCN has provided coverage for 48,680 Utahns that wouldn’t have been able to afford it otherwise

HB 156 – Allows previously uninsurable individuals to purchase coverage that excludes non-life-threatening conditions at an affordable rate

Premium Assistance – 2006 Legislature approved funding for a demonstration premium assistance program for around 1,000 Utahns. Our HIFA waiver application was approved in October, 2006, creating the Utah Premium Partnership for Health Insurance (UPP).

Moving Forward – The Governor’s Proposal

FIRST STEPS:

Insure Utah’s Children

Use Private Market Solutions – The Utah Premium Partnership for Health Insurance (UPP)

Help Small Business

UninsuredChildren

ParentalResponsibility

Insuring Utah’s Children

Utah’s Uninsured Children – All children living in the State of Utah should have health insurance.

Parental Responsibility – Parents should be responsible to pay for their children’s needed health care. Should we require that parents provide evidence of ability to pay, either through insurance or some other way?

Total uninsured

children71,300

27,800

Household income less than 100% of FPL*

They are eligible for Medicaid but haven’t signed up yet.

They should be enrolled in Medicaid.

*”FPL” is the Federal Poverty Level, currently $20,000 per year for a family of four.

18,900

24,600

Household income between 100% and 200% of FPL*

Household income greater than 200% of FPL*

Meet income guidelines for CHIP. Qualify for the UPP subsidy for private policies.

Must buy private insurance without financial help.

Parental Responsibility – All parents can provide health insurance for their children.

How Utah Will Cover Its Uninsured Children

Private Market Solutions

UPP – Our current HIFA waiver created Utah’s Premium Partnership for Health Insurance (UPP) that allows families to use state and federal funds to purchase private health insurance for qualifying children, adults, and possibly their families.

The InsuranceExchange

Helping Small Business

An Insurance “Exchange” – A clearinghouse that facilitates individual and small business purchase of health insurance.

•Tax free premium payments

•Employers control their costs

•Portable and flexible health plans for employees

Overall Marginal Tax Rates (Example: One parent with two children, Wisconsin state information)

0%

10%

20%

30%

40%

50%

60%

$9,398 $11,862 $13,687 $17,337 $20,986 $24,636 $29,198 $34,673 $40,148 $45,623 $51,097

Family Income

Ta

x S

ub

sid

y P

erc

en

tag

e

State

FICA

Federal

Utah Insurance Exchange

PrivateHealth Plans

Defined contribution(pre-tax)

Employers

Subsidy for qualifying families

UPP

The Utah Insurance Exchange is a clearinghouse for private health plans.

• Employers offer a pre-tax health plan to all employees

• Allows employers to use a defined contribution system

• Working families choose plans to meet their needs

• Health insurance premiums are tax free• Health insurance becomes portable and

flexible

WorkingFamilies

Pre-tax Premiums

Choice of Private Health Plan

Insuring Individuals and Employees of Small Business

The InsuranceExchange

UninsuredChildren

Putting it All TogetherUtah’s Plan to Expand Health Insurance

Coverage for the Uninsured

ParentalResponsibility

Insuring Utah’s

Uninsured Citizens