Due to the variation among the six programs presented in this paper, it is necessary to provide a brief overview of each State before presenting an in-depth discussion of findings. There is a great degree of variability with regard to program and benefit design, program funding, and populations targeted. Some States offer multiple programs and products. Because most Americans under the age of 65 receive health insurance through their employer (61 percent in 2005) and most uninsured adults are employed, many of the programs highlighted in this paper build on employer-sponsored insurance (ESI) products. That said, there is a healthy mix of program designs among the six States studied. Programs range from a county-specific and community-based program in Muskegon County, Michigan, to a Statewide and self-funded program that offers multiple benefit packages in Arizona. Again, some States offer more than one program and enrollment numbers vary greatly. Half of the States profiled use Federal matching funds to partially subsidize their programs and all but one use State funds. A comparison of key program characteristics is presented in Table 2; a more detailed discussion of each State can be found in the Case Study section of this paper.

Arizona – The Healthcare Group of Arizona (HCG) was created in 1985 to provide affordable and accessible health care coverage to sole proprietors, small businesses with 50 or fewer employees, and political subdivisions (cities and towns). The program was initially funded by a grant from the Robert Wood Johnson Foundation. In 1988, small employers in four counties were allowed to participate and the program was launched Statewide in 1993. Full-time employees and dependents at qualifying firms are eligible to participate in the program. Employers with fewer than six employees must have 100 percent participation; otherwise 80 percent of employees must enroll in an HCG plan. As of December 2006, there were 24,562 lives covered by HCG. Although few States or programs provide enrollment targets, HCG enrollment in December 2006 was below the July 2006 target of 27,698 and short of the January 2007 target of 43,381. HCG estimates that once enrollment reaches 100,000 the program could afford to provide individual coverage. HCG is state-sponsored public-private partnership that is operated under the Arizona Health Care Cost Containment System (AHCCCS) and is totally separate from the State’s Medicaid and SCHIP (State Children’s Health Insurance Program). The State contracts with private managed care organizations (MCOs) and a statewide preferred provider organization (PPO) for insurance plans. As of the 2005/2006 budget, HCG is totally self-funded via premiums.

Michigan – Michigan’s Access Health, available only in Muskegon County, provides access to a comprehensive array of health care services for uninsured workers of businesses that did not previously provide health insurance coverage. The care must be provided by local county-based providers and the care is paid for on a fee-for-service basis. Certain services, such as routine dental care, vision and hearing exams, neonatal intensive care outside the county, injuries resulting from automobile accidents, workplace injuries, organ transplants, and treatment for serious burns are not covered by the program. Access Health was implemented in 1999 and currently serves approximately 1,200 employees and dependents. It is known as a “three-share plan” whereby employers and employees each pay approximately 30 percent of the cost of the program and the community pays the remainder. Access Health is overseen by the State treasurer rather than the insurance commission, exempting it from health insurance rules such as State benefit mandates and solvency requirements.

New Mexico – The New Mexico State Coverage Insurance (NMSCI) began enrolling small employers (those with less than 50 employees) and individuals on July 1, 2005. The program provides access to a statewide managed care system primarily targeted to employers and low-wage employees, although low-income uninsured individuals are also allowed to participate in the program. Individuals must have family incomes below 200 percent of the Federal poverty level (FPL) to participate in the program. NMSCI is a Medicaid and SCHIP expansion program. It is funded via New Mexico’s unspent SCHIP (including the required State match) as well as with employer and employee contributions. The managed care coverage is provided by private plans selected through a competitive bidding process. Because of its low rate of ESI coverage among small businesses, New Mexico opted not to use an ESI model. Although benefits are similar to a comprehensive commercial plan, there is a $100,000 annual benefit limit.

New York – Healthy NY began enrolling individuals in January of 2001 and has three target populations: small business employers and their employees, sole proprietors, and working individuals who cannot obtain insurance through their employers. The program serves approximately 110,000 individuals, 76,500 subscribers, and 34,500 dependents. All health maintenance organizations (HMOs) in the State must participate in the program. Other carriers may also participate. In addition to the HMO products, a few plans offer a PPO. Healthy NY includes a fairly comprehensive benefit package and a reinsurance program that results in lower premiums for employers and employees. Unlike earlier programs in New York, as well as many of the other programs in this study, Healthy NY does not directly provide subsidies to small businesses or low-wage workers. Instead, the subsidy is directed at the insurance product through a reinsurance program, which pays most of the expenses of high-cost people who join the program.

Oklahoma – The Oklahoma Employer/Employee Partnership for Insurance Coverage (O-EPIC) program assists Oklahoma small businesses and employees in paying health insurance premiums. The target population includes low-income individuals and small employers. O-EPIC consists of two programs: the Premium Assistance Partnership Program (Premium Assistance) and the Premium Assistance Public Program (Individual Plan). Premium Assistance began enrolling beneficiaries in November of 2005. The Individual Plan was implemented in January of 2007. A Health Insurance Flexibility and Accountability (HIFA) waiver program, O-EPIC is funded via Federal matching Medicaid funds, State tobacco tax funds, and individual and employer premiums. Premium Assistance utilizes the private insurance market and provides subsidies to employers to pay for employee health insurance premiums. The State’s goal is to allow market forces to determine the benefit package and to integrate Premium Assistance workers into the private insurance marketplace rather than have them depend on State health programs. The Individual Plan is being administered by the State Medicaid office and will provide a limited package which includes primary care case management services and a lifetime maximum benefit. The State Medicaid infrastructure will provide administrative support and Medicaid providers will deliver care.

Utah – The Utah Primary Care Network (PCN) is a fee-for-service state-run Medicaid expansion program operating under a Section 1115 Medicaid waiver. PCN has enrolled approximately 16,000 individuals and provides a limited benefit package of primary care services. The program does not cover specialty physician services and there is no coverage for inpatient hospital care. Utah hospitals agreed, however, to donate $10 million of inpatient care annually to PCN enrollees. This agreement was made easier by Intermountain Healthcare, a nonprofit health care system serving the health care needs for many Utah residents. In November of 2006, the State began another program—Utah’s Premium Partnership for Health Insurance (UPP)—to provide subsidies to uninsured employed individuals to help them pay for ESI plans. The program targets low-wage workers regardless of health status and helps them gain entry into the ESI market. Uninsured individuals and families with incomes below 150 percent of the FPL are eligible for PCN and UPP, and children in families below 200 percent of the FPL are eligible for UPP. Employers do not participate in PCN, but in UPP they must cover 50 percent of ESI premiums and offer plans that meet the minimum standards of the program. UPP utilizes existing ESI plans in the Utah market. Both programs are funded through Federal funds and State general funds. UPP also receives employee and employer contributions and a limited allocation of tobacco tax revenue for SCHIP allotments. The State Medicaid program provides the infrastructure for both programs and State agencies determine eligibility.

Table 2: State Program Characteristics