The Michigan Healthcare Marketplace – Initial Observations

1. The Michigan Healthcare Marketplace – Initial Observations August 22, 2005 Eileen Ellis Health Management Associates

2. What Do We Know and What Do We Need to Learn? • Who is insured/covered in Michigan? • How are they insured? • Who is without insurance/coverage? • Why are they uninsured? • What characteristics of the Michigan insurance market impact the rate of insurance? • How does insurance regulation impact today’s market and impact options for the future? Health Management Associates

3. Sources of Information • Data that will be reviewed by CRHOP and the Data Workgroup: • Household survey • Employer survey • National Sources with State data: • Current Population Survey (CPS) (new data available next month) • Medical Expenditure Panel Survey • Snapshots of America’s Families (Urban Institute) • Models workgroup will use OFIS data on the Michigan insurance marketplace Health Management Associates

4. Overview of Coverage in Michigan in 2003 Source: Kaiser State Health Facts Health Management Associates

5. Group Coverage Individual Medicare Comp. Medicaid/SCHIP Other HMO Total 1,731,000 12,000 21,000 889,000 10,000 2,796,000 Managed Care In Michigan in 2004 HMO penetration in Michigan in 2003 was 26.7% per Kaiser State Health Facts, versus 23.7% national average. OFIS 2004 data implies increase to about 30%. Source –Michigan Office of Financial and Insurance Services: 2004 HMO Enrollment Information Health Management Associates

6. Employer-Based Coverage In Michigan Source: 2003 Medical Expenditure Panel Survey (MEPS) Health Management Associates

7. Employer-Based Coverage Employer-based coverage is more prevalent in Michigan. Source: 2003 Medical Expenditure Panel Survey (MEPS) Health Management Associates

8. Affordability of Premiums Group Coverage In 2003 the average premium in Michigan was similar to the national average, but the employee share of costs was lower. Note – for single coverage the results are similar for MI as nationally – employee pays 15% in MI, and 17% nationally. Source: Kaiser State Health Facts. Health Management Associates

9. Individual Coverage • Michigan has guaranteed coverage through BCBSM. • Michigan has a lower percentage covered through individuals plans than the national average (4% vs 5%), but has 6% more persons covered through groups. • Premiums for individual policies are age-rated. • Individual policies for family coverage may cost from $248 to $993 per month.* *Source: BCBMS Individual Care Blue hospital, surgical and medical plan premiums, August 2005. Health Management Associates

10. Characteristics of Non-elderly Uninsured in Michigan: 2002 & 2003 • Children represent 16% in MI, 20% in US. • Employment Status: • Families with at least one full-time worker are 63% of the uninsured in MI, 69% in US. • Families with no worker are 22% of uninsured in Michigan and 19% for the US. Estimates by Kaiser Foundation and Urban Institute based on 2003 and 2004 CPS. Health Management Associates

11. Income as a Predictor of Insurance – Michigan Data from 2002-2003 • Income status of Michigan insured • Less than 100% FPL – 4% (238,000) • 100-199% FPL - 12% (702,000) • 200% FPL or more – 84% (5,086,000) • Income status of Michigan uninsured • Less than 100% FPL – 37% (412,000) • 100-199% FPL - 26% (292,000) • 200% FPL or more – 37% (409,000) Note: Michigan percentages nearly identical to US average. Estimates by Kaiser Foundation and Urban Institute based on 2003 and 2004 CPS. Health Management Associates