Delaware Health Care Commission

February 17, 2005

Alice Burton, DirectorAcademyHealth

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FY 2006 Budget Highlights

Pledge to reduce deficit in half by 2009 Record deficit of $427 billion Non-security, discretionary spending

will rise 1% However, HHS will decrease

discretionary funding by 1.2% 17% increase in Medicare - Revised cost

estimates for Medicare Modernization Act

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President Bush’s Health Agenda

Economic opportunity and ownership Health Information Technology Comprehensive, consumer driven health

care: HSAs, tax credits, Association Health Plans and medical liability reform

Compassionate Society Providing access through Health Centers Medicaid and SCHIP

Protecting America Making government more effective

Source: Overview of Presidents 2006 Budget, OMB 2/7/05

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President Bush Coverage Agenda

•Health Insurance Tax Credit•Health Savings Accounts

•Tax credit•Above the line deduction•Rebate to small employers

•State Purchasing Pools•Association Health Plans (AHP’s)•SCHIP outreach•Community Health Centers

Source: Overview of Presidents 2006 Budget, OMB 2/7/05

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Medicaid Proposals

• Secretary Leavitt identified $60 billion in cuts over ten years

• Eliminating Inter-governmental transfers (IGT’s): $40 billion• Fraud and Abuse: $5 million• Amend Medicaid Drug Rebate Formula: $15 million

•Medicaid and SCHIP modernization

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Delaware Health Commission Project Guiding Principles

1. Highest ratio of dollars to insured2. Target policy at low income

populations3. Administratively feasible4. Avoid entanglement with federal

law5. Build on older programs and

successful structures

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Policy Options 2004 Strategic Plan

1. Limited Benefit Plan2. One-Third Share Plan3. Delaware Healthy Children

Expansion4. Purchasing Pool

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Limited Benefits Plan

Low Cost Insurance product or direct reimbursement emphasizing primary and preventative care

Program can be targeted at low income

Affordable for low income individuals via minimal cost sharing

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One-Third Share Plan

Employer, employee, and the state each pay one-third of total premium

Streamlined benefit package Affordable “coverage” for the working

uninsured employed by small businesses

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Delaware Healthy Children Expansion

Expand Delaware CHIP program to cover parents of Medicaid and CHIP eligible children between 100% FPL and 200% FPL

1115 HIFA Waiver allows state additional freedom for benefit , cost-sharing, and enrollment caps

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Purchasing Pool

Pool negotiates with private carriers and determines which plan to offer

Employers pay minimum premium percentage and enroll a minimum percentage of employees

State absorbs adverse selection with subsidy