Utah (Utah Primary Care Network and
Utah’s Premium Partnership for Health Insurance)

Background – The Utah Primary Care Network (PCN) provides primary care coverage to previously uninsured individuals under an 1115 Medicaid waiver. PCN enrolls approximately 18,000 individuals and provides a limited benefit package of primary care services. PCN is a fee-for-service (FFS) State-run Medicaid expansion program. Primary care providers and Federally qualified health centers (FQHCs) that participate in PCN are paid at the Medicaid physician payment rates. The program does not cover specialty physician services. In addition, although there is no coverage for inpatient hospital care under PCN, Utah hospitals agreed to donate $10 million of inpatient care annually to PCN enrollees.

In November of 2006, Utah began another program called Utah’s Premium Partnership for Health Insurance (UPP). UPP provides subsidies to uninsured employed individuals to help them pay for employer-sponsored health insurance (ESI) plans. The program targets low-wage workers regardless of health status and assists them in gaining entry into the ESI market.

Uninsured individuals and families with incomes below 150 percent of the Federal poverty level (FPL) may be eligible for PCN and UPP, and children with families below 200 percent of the FPL may be 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 program’s minimum standards. UPP utilizes existing employer-sponsored insurance (ESI) plans in the Utah market.

Both programs are financed through Federal and State general funds. UPP also receives a limited allocation of tobacco tax revenue for SCHIP (State Children’s Health Insurance Program) allotments. The State Medicaid program provides the infrastructure for both programs and State agencies determine eligibility and enrollee participants.

Program History – PCN began providing primary care coverage to previously uninsured adults under an 1115 Medicaid waiver in July of 2002. The primary care benefits provided to uninsured adults were funded in part through cost-sharing measures and through slight reductions in the benefits for adults who were previously eligible for Medicaid but not pregnant, aged, blind, or disabled. PCN also replaced the Utah Medical Assistance Program (UMAP). UMAP was a fully-funded State program that provided care for acute and life-threatening conditions of the very poor and Medicaid ineligible residents.

PCN provides primary care services but does not include hospitalization or specialty services. As a result of public concern about the limited benefits, the State entered into an agreement with hospitals to provide up to $10 million of donated care. The State also seeks to arrange donated or reduced cost specialty care.

As of August 2006, 16,166 individuals were enrolled in PCN. This number changes constantly as the State holds selected open enrollment periods in order to stay within available State funding. PCN has an overall enrollment cap in the waiver of 25,000.

Utah began taking applications in November of 2006 for its new program, UPP. UPP provides subsidies to working individuals and families to pay for employer-sponsored health insurance premiums. The program replaced the small Covered at Work (CAW) program and differs from PCN in that it helps pay for existing ESI plans. UPP subsidizes enrollment in employer health plans to provide services beyond primary care, such as hospital and specialty services. The ESI plans must meet basic program requirements and employees must meet eligibility guidelines for income and coverage. UPP targets uninsured, low-wage workers regardless of health status and tries to help them gain entry into the ESI market.

Enrollees participating in CAW who meet UPP requirements will be transferred to UPP. Enrollment in CAW was capped at 6,000, but the program has only enrolled 90 individuals. The State believes that the low enrollment rates for CAW are related to the fact that subsidy payments were too low. While UPP does not have an enrollment cap per se, budgetary limits restrict the number of enrollees. Utah projects the ability to serve 1,000 adults and 250 children in the first year of UPP operations.

In addition to PCN and UPP, resources for the uninsured and poor include traditional Medicaid, a pool of State funds for high-risk uninsurable individuals, and community health clinics.

Eligibility Requirements for the PCN Program – Eligibility is limited to adults aged 19 to 64 who are below 150 percent of the FPL. Individuals are eligible for PCN only if they:

• Are not eligible for Medicaid
• Are U.S. citizens or legal residents
• Are not full-time students
• Do not have health insurance or access to Medicare or Veterans Benefits
• Do not have access to ESI, or the cost of their ESI is more than 15 percent of their income
• Have voluntarily terminated their health insurance in the six months prior to PCN enrollment
  
  Budget considerations require PCN to enroll more parents than childless individuals. This is mostly driven by Federal budget neutrality calculations because childless adult member months do not count in the denominator in the 1115 budget neutrality formula even though their health care costs are in the numerator. In addition, childless adults are significantly more expensive than parents (approximately $130 per member per month (PMPM) versus $60 PMPM for parents). Therefore, PCN has procedures to enroll more parents than childless adults and often only opens enrollment to parents.

Eligibility Requirements for the UPP Program – The State will cover eligible employees aged 19 to 64 with incomes up to 150 percent of the FPL. In addition, employees must:

• Not be eligible for Medicaid
• Be U.S. citizens or legal residents
• Be uninsured at the time of application
• Have access to their employer’s health plan or their spouse’s employer-sponsored health plan
• Have access to plans where the most inexpensive option is at least 5 percent of total household income before taxes

Employees who voluntarily terminate their health insurance are not eligible for UPP for 90 days. Spouses of employed individuals may be eligible for UPP if they meet the same requirements and can be enrolled in their spouse’s employer-sponsored health insurance. Children aged 0 to 18 with family incomes up to 200 percent of the FPL may also be eligible for UPP. Children are subject to the same UPP requirements as adults, with the exception of the employment and FPL requirements.

Subsidies for health insurance premiums will be up to a maximum of $150 for the employee, $150 for the spouse, and $100 for each dependent child. The employer is required to pay 50 percent of the employee insurance premiums; UPP will cover the remaining premium up to the maximum allowable amount. In addition, children with family incomes up to 200 percent of the FPL are eligible for UPP.

The employers’ main role is to complete a bi-annual form certifying that they offer a qualifying insurance plan and that they are paying at least 50 percent of the premium for their employees. Qualifying insurance plans cover physician visits, hospital inpatient, pharmacy, well-child visits, and immunizations. Employers are not required to pay for the employee’s share of spousal or dependent coverage.

Program Funding – The PCN and UPP are funded through Federal funds, State general funds, and individual/employer contributions. State general funds provide the match for Federal funds for PCN and the adult/family part of UPP. In addition, UPP funds children with the Federal SCHIP allotment and State tobacco tax funds.

PCN is funded through Federal and State funds and individual premiums. Premiums are means-tested: $15 per year for individuals receiving General Assistance (financial assistance to a person not otherwise eligible for some other types of cash assistance); $25 per year for individuals with incomes below 50 percent of the FPL; and $50 per year for all other individuals.

UPP subsidies are funded through Federal and State funds. Employers are required to contribute 50 percent of employee premiums (which is the average for small businesses around the State). Individuals are responsible for any remaining premiums after applying the State-provided subsidy.

Program Design – PCN and UPP were approved under a Medicaid 1115 waiver. PCN is an FFS State Medicaid expansion program that provides a limited benefit package of primary care services. UPP relies on existing ESI plans that meet the minimum benefit standards of the program.

The goal of UPP is to encourage employer-sponsored insurance for low-income workers. The State believes this can be accomplished by utilizing the existing insurance market structure and agreeing to subsidize all plans that provide employer-sponsored coverage for low income workers. There is relatively little administrative burden for private insurance carriers and these carriers can use existing insurance agents or brokers to enroll businesses in their qualifying health plans.

Delivery of Services – PCN is an FFS program that uses existing Medicaid providers to deliver a limited set of primary care services. Managed care is not a component of PCN for a number of reasons. The State chose not to build on the Medicaid managed care organization (MCO) market because 1) PCN offered only a limited benefit package, 2) MCOs were not available statewide, and 3) it was easier to build the changes into the MMIS FFS payment structure than to build a new partial capitation subsystem. PCN does not have preferred provider networks, but PCN enrollees use safety net providers, such as FQHCs. As a Medicaid expansion program, PCN employs the existing Medicaid infrastructure for program operations, includes an overall quality assurance program, and operates its own MMIS.

Services delivered in UPP are based on ESI plans. As a result, they may include managed care, preferred providers, and other commercially available methods of delivery.

Payment and Reimbursement – PCN pays primary care providers using Medicaid payment rates, which are about 50 percent of the Medicare rate for physicians. FQHCs are paid using this same methodology and therefore do not receive cost-based reimbursement rates. FQHCs have continued to participate despite the lower reimbursement.

The State is not involved in determining reimbursement rates in UPP because the program is based on existing private insurance plans.

Plan Benefits for PCN – PCN covers only a limited set of primary care benefits and does not include hospitalization or specialty services. PCN covers:

• Primary care visits
• Some emergency room visits
• Emergency medical transportation
• Lab services
• X-rays
• Up to 4 prescriptions per month
• Dental exams, dental x-rays, cleanings, fillings
• One eye exam per year; no glasses
• Family planning methods

PCN attempts to control costs with member co-payments. Co-payments include:

• Maximum co-payment: $1,000.00 per person/per calendar year
• Physician visits (pregnancy-related services are not covered): $5 co-pay per visit
• Hospital emergency room: $30 co-pay per visit for emergencies (subject to ER visit limitations)
• Medical equipment and supplies: 10 percent co-pay for covered services
• Pharmacy (four prescriptions per month): $5 co-pay for prescriptions on the preferred list; 25 percent of the allowed amount for drugs not on preferred list
• Laboratory: 5 percent co-pay of the allowed amount if over $50
  • X-rays: 5 percent co-pay of the allowed amount if over $100
• Dental primary care services: 10 percent co-pay of allowed amount
• Vision screening: $5 co-pay; benefit limited to one eye exam per year

Plan Benefits for UPP – The simplicity of UPP makes it unnecessary for the State to determine benefit designs of ESI plans. Existing health plans decide on the benefit packages to be offered in the Utah insurance market and employees select from plans offered by their employers. The State then provides a subsidy to the employee to pay for the ESI plan. It is up to the private insurance carriers to determine the most effective cost containment mechanisms and benefit packages. UPP does, however, require employers and ESI plans to provide, at a minimum:

• Physicians visits, well-child exams, hospital inpatient services, child immunizations, and pharmacy
• Payment of at least 50 percent of the employee’s ESI premium
• Deductible of $1,000 per person or less
• Lifetime maximum benefits of $1,000,000 or more
• Payment of 70 percent of inpatient costs after the deductible

Children who receive dental coverage through their parent’s employer will receive an additional $20 per month subsidy. If children do not have dental coverage through an employer’s plan or choose not to enroll in the employer’s plan, then they will receive the traditional CHIP dental coverage provided through the State-contracted managed care plan.

Determination of Benefit Package for PCN – Budgetary limits determine the range of services that is offered by PCN. The State was faced with the task of deciding which services were essential, given the limited funds for the program. The challenge in balancing budgetary restrictions with the need to cover critical services resulted in a benefit package that included primary care services but excluded specialty physician care and inpatient hospital care. The State has an on-going stakeholder process for the program. When stakeholders want to add services to the benefit package, the State holds discussions concerning the impact the additional services would have on the program, including what current services would need to be cut to pay for new services.

While inpatient hospital and specialty care is not provided as a benefit, hospitals have agreed to donate up to $10 million annually in inpatient financial charges to pre-authorized PCN patients. Before the State implemented PCN, hospital rates were increased to make up for lost revenue from moving formerly funded patients into the donated arrangement. UMAP had previously provided medical payments for 3,000 to 4,000 chronically and terminally ill recipients.

The PCN benefit package is limited compared to commercial products. Commercial plans have richer benefit packages that include such services as hospital inpatient care and therapies. When developing PCN, the State of Utah designed a benefit package that would originally cost approximately $50 PMPM for 25,000 enrollees. Even with the limited package, the program currently costs approximately $60 PMPM for parents and $130 PMPM for childless adults.

Determination of Benefit Package for UPP – Because Utah decided to build on its private insurance market, a policy decision was made to make benefit requirements very general. UPP requires the most critical services to be part of the minimum benefit package– physician, pharmacy, and hospital inpatient care. The State did not try to intervene in cost sharing under the program, but left it to the market to determine the most efficient means of accomplishing this. In addition, Utah does not have cost-sharing limits.

Impact of SPG Program – The Health Resources and Services Administration State planning grant (SPG) program helped generate data for reports that guided the implementation of PCN and UPP and selection of the target population. The SPG program also helped raise awareness of the problem with uninsurance in Utah and fostered a favorable political climate for offering PCN. Additionally, internal claims experience was utilized to develop the benefit package. For example, emergency room utilization was gathered from claims data and was used to evaluate the tradeoff between offering emergency room benefits or specialist care. Due to budget limitations, only one of the two benefits could be offered and it was decided that emergency treatment was a necessity.

Lessons from Administering the Program – The State Medicaid agency infrastructure supports the administration of both PCN and UPP through a variety of activities. PCN and UPP are administered within the State Medicaid agency. Eligibility for PCN and UPP is determined by the same staff that determine Medicaid eligibility. This arrangement allows staff to easily consider other program options when a client loses eligibility. In addition, PCN utilizes Medicaid providers, payment systems, and so on so that a separate payment or service delivery structure did not need to be developed.

Utah has found that the PCN benefits should be expanded to pay for urgent care services. Currently, clients do not have an after hours option for non-life threatening situations. By adding urgent care services, PCN would reduce the burden on hospitals for uncompensated emergency room visits.

Utah also would like to offer alternative primary care benefit packages and open up PCN to a private carrier plan. The private plan would be allowed to offer a different limited benefit package and individuals could choose between the State-run PCN and private carrier coverage.

Utah has found that the premium subsidy for low-wage workers has to be substantial and meaningful. With this in mind, the State is implementing UPP with a significantly increased subsidy level above what was allowed under CAW. In addition, the State reduced PCN’s annual enrollment fee for individuals with incomes below 50 percent of the FPL.

Evaluation – The Utah Department of Health has completed a number of evaluations of the PCN program, including health outcomes, utilization reviews, and disenrollment and re-enrollment surveys. Health outcomes evaluations based on pre- and post- self-health assessments were completed in 2002 and 2003. Hospital and pharmacy utilization reviews were performed for individuals enrolled between July of 2002 and February of 2004. A disenrollment survey of PCN members was completed between November and December of 2003, and a re-enrollment survey report was completed in 2005. Utah is completing a more comprehensive final review as part of its current waiver reauthorization process.

The 2002 self-assessment health outcomes survey revealed that PCN enrollees were more likely than the general population of Utah to have arthritis, diabetes, or heart disease. Minimal change in health status was reported in the 2003 follow-up health outcomes survey. In 2003, participants were more likely to have received needed care after enrollment, while inpatient utilization decreased. However, enrollees were also more likely to have been diagnosed with a chronic condition after enrollment, to have reported difficulty accessing specialty care, and were less satisfied with the PCN program than traditional Medicaid enrollees’ assessment of Utah Medicaid.

Evaluation of hospital and pharmacy utilization showed that a greater proportion of PCN clients utilized hospital services prior to, or in place of, primary care services, resulting in slightly higher inpatient costs. High intensity users of pharmacy services accounted for a high percentage of the program’s costs. These enrollees were also using drugs that had the potential for abuse and misuse, with some of the costliest drugs having lower-cost alternatives. The 2003 disenrollment survey indicated that over 27 percent of enrollees left the program. Nearly one-third of those who left had health insurance from other sources and half were still eligible for PCN. As the reason for not re-enrolling, nearly half of the respondents indicated positive health status; 29 percent reported finances, with a majority citing premium cost; 26 percent reported that PCN did not meet their health care needs; and about one-third cited the inability to receive needed medical care or prescriptions. In the 2005 re-enrollment survey, 63 percent of the enrollees expressed need for expanded service coverage by the PCN program and 21 percent were complimentary toward the program.