5. Health Insurance Continuity
Health Insurance Continuity
One of the five program components specified in the CARE Act for which Title II funds may be spent is a continuum of health insurance coverage for people living with HIV disease (PLWH). Loss of health insurance or lack of coverage is always a fearful prospect and even more so for people dealing with costly disease such as HIV.
The vast majority of States conduct some type of health insurance continuum of coverage activities, including CARE Act Title II efforts, Medicaid continuity programs, and State initiatives. Many are formal programs while others are less structured activities that pay health insurance premiums for a defined number of clients. The number of such programs, and the amount of Title II resources devoted to them, has increased since initial passage of the CARE Act. Health insurance continuum of coverage programs have received greater attention for the following key reasons:
Section 2612(a) of the CARE Act allows States "(4) to provide assistance to assure the continuity of health insurance coverage for individuals with HIV disease in accordance with section 2615."
Section 2615 allows States to establish a program to assist eligible low-income individuals with HIV disease in:
"(1) maintaining a continuity of health insurance; or
"(2) receiving medical benefits under a health insurance program, including risk-pools.
"(b) LIMITATIONS.—Assistance shall not be utilized under subsection (a)—
"(1) to pay any costs associated with the creation, capitalization, or administration of a liability risk pool (other than those costs paid on behalf of individuals as part of premium contributions to existing liability risk pools); and
"(2) to pay any amount expended by a State under title XIX of the Social Security Act."
The HIV/AIDS Bureau (HAB) has issued the following policies on funding health insurance premiums for low-income PLWH:
COBRA (Consolidated Omnibus Reconciliation Act) is Federal legislation that requires employers to offer individuals leaving their workforce continued health insurance coverage, at the individual's expense, under the employer's group plan. Coverage can be continued for 18 months and an additional 20 months for individuals leaving employment due to a disability.
A health insurance premium is a specified dollar amount paid to an insurance company, usually on a monthly basis, in exchange for coverage (i.e., the insurance company will pay the insured's medical expenses, less any co-payment or deductible amount specified in the insurance policy).
Risk pools are mechanisms to provide insurance for people in a variety of situations: when individuals have lost their coverage, are ineligible for Medicaid or Medicare, cannot purchase insurance due to eligibility criteria that exclude pre-existing conditions, and/or cannot otherwise afford insurance.
The following terms reflect key aspects of a State's health insurance market-many of which vary by State law.
|Conversion policy||A group policy that can be converted to an individual policy, usually at a premium rate higher than the group premium rate.|
|Guaranteed issue||Requirement for an insurer to offer policies to an individual regardless of health status or claims experience.|
|Guaranteed renewal||Requirement for insurers to allow persons to renew their coverage from year-to-year regardless of health status or claims experience of the insured as long as the plan continues to be offered in that market.|
|Waiting period||The length of time required before an individual becomes eligible for health insurance coverage. The waiting period must be applied consistently for all members of a group.|
|Pre-existing conditions||Any condition, either physical or mental, for which medical advice, diagnosis, care, or treatment was recommended or received during the look-back period.|
|Look-back period||The maximum number of months an insurer can go back into a person's medical history to determine if a condition has already been diagnosed. Look-back periods can range across States from six months to two years but are usually six months|
|Pre-existing condition exclusion period||The time during which coverage for the pre-existing condition is denied after a policy takes effect—typically up to 12 months. A State program may make premium payments in addition to paying for services directly from Title II funds (including ADAP|
|Rating restrictions||Restrictions a State places on the premium insurers can charge in the individual restrictions market. Ratings are either based on community rating or experience rating. Community rating refers to premium rates that are set for the community as a whole. Rates cannot be set based on an individual's claim experience (experience rating), health status, or duration of coverage.|
Health insurance continuity programs generally operate as premium payment plans. HIV-specific programs were initially created to continue payment of employment-related, group health insurance premiums, through COBRA, for individuals who became disabled and could no longer work. COBRA coverage lasts 18 months plus a 20-month extension for individuals leaving employment due to a disability. When COBRA coverage expires, individuals can obtain a conversion policy, which may provide the same benefits as their previous group plan but often at higher rates.
While COBRA coverage and conversion coverage are standard in most continuum of coverage programs, some have broadened their scope and purchase new health insurance coverage for hard-to-insure individuals through mechanisms like insurance purchasing projects or State-run risk pools.
In most cases, continuity programs are designed to offer transitional coverage. Many clients eventually become eligible for Medicaid or Medicare, or transition off program rolls due to death. Continuity programs often work closely with public programs to transition clients as they become eligible for public benefits. Given the efficacy of new treatments in managing HIV disease, this transitional role has been challenged.
Since health insurance is primarily governed by State laws, the implementation of health insurance continuity programs varies from State-to-State with respect to certain specifics (e.g., use of State funds to support the program; and administration by the HIV/AIDS program office, the State's Medicaid program, or community agencies). However, many programs share the following characteristics:
Experience of programs shows that States should study the applicability of continuity programs relative to their own unique fiscal and political circumstances. For some States, the most important consideration may be the cost savings realized by operating a health insurance continuity program. For others, it may be the ability to enhance the continuity and comprehensiveness of care for its residents with HIV/AIDS. Benefits of continuity programs include:
The following recommendations are provided for Title II programs to consider in determining use of CARE Act funds to purchase health insurance for persons with HIV/AIDS.
Determine the health insurance options available to CARE Act clients within the State
Under COBRA, group health plans (usually sponsored through an employer, schools, unions, and other professional organizations) can be continued for up to 18 months after separation, and up to 29 months in some cases, as a disability benefit (at 102 percent of the group-rate premium). Once COBRA benefits are exhausted, the Title II program can explore the cost of a conversion policy, with an increase in the premium rate being an important consideration in deciding on a conversion policy. For example, a group policy with a premium rate of $200 per month could convert to an individual policy with a premium rate of $600 per month. In the long run, however, the higher premium rate may still prove cost effective to the Title II program and is worth exploring.
Title II programs may want to consider purchasing supplemental plans- generally purchased in the open market—which are usually available for Medicare eligible clients. Programs should determine if the State offers a high-risk health insurance pool for individuals who are uninsurable or hard-to-insure. Insurance pools often provide greater access to comprehensive, primary care services for persons with long-term illnesses, such as HIV/AIDS, who are unable to purchase individual insurance. Some States, however, may not permit State or Federal funds (e.g., CARE Act) to purchase policies for clients, so Title II may not have access to these programs.
Title II programs should find out if the State has made legislative changes to insurance options (such as regulating premiums or requiring that policies be issued during open enrollment periods), making it cost effective to purchase health insurance policies for CARE Act clients.
Assess the overall budgetary impact of moving CARE Act clients into a health insurance program
Using Title II funds for health insurance continuation can offer an important mechanism for providing uninterrupted access to comprehensive primary health care.
Title II programs that use ADAP funds to purchase health insurance policies must ensure that the policy's pharmaceutical coverage is equal to or greater than the existing State drug formulary. They must also ensure that the aggregate cost of providing services does not exceed the total cost for all clients. Programs should also assess whether other funding sources (e.g., Title I funds, State funds) can be leveraged to support the health insurance program.
Establish health insurance program philosophies and priorities
Insurance programs should have a clear, overall plan and implementation strategy to ensure long-term fiscal stability. Premium payments should be made on time to provide uninterrupted access to primary care services and drug therapy. In addition, administrators should ensure that the program is accessible and available to all CARE Act clients.
Consider the program's design elements
There are several design elements that Title II programs should consider in developing insurance purchasing programs for PLWH. These include the following:
Scope and Coverage
Define the program's scope of coverage. For example, will it pay for deductibles and co-payments in addition to monthly premiums?
Determine the best vehicles to adopt, such as a State-run high-risk health insurance pool, an insurance continuation program leveraging COBRA benefits, or individual policies purchased through the open market.
Evaluate conversion policies and explore supplemental policies, such as the availability of Medicare supplemental policies to expand existing coverage to ensure a wider range of primary care services.
Enrollment and Information Management
Modify the Title II enrollment form to include a health insurance component.
Expand the Title II data system to track information on both insurance and drug purchases and to respond to rapid changes in an individual's health insurance status, including the disbursement of checks and the management of deductibles and stop-loss payments.
Educate clients about new health insurance options. Inform and train case managers about enrollment options. Reallocate resources based on potential savings or demand created by implementing a health insurance program.
Verify that the drug purchasing and dispensing system can interact with health insurance payers. Ideally, the dispensing pharmacy should be able to split-bill for each prescription (i.e., bill 80 percent of the drug cost to an insurance program and the remaining 20 percent to Title II).
Create a system for providing assistance to clients who pay for prescriptions up-front and then submit paperwork to the program to request payment from the insurer (know as "pay-and-chase").
If Title II programs decide to use ADAP funds to purchase health insurance, they must submit a Notification of Intent to HRSA that addresses: the methodology that will be used, an assurance that the pharmaceutical component of the insurance policy includes a formulary equivalent to the ADAP formulary, and assurance that the cost of providing coverage to clients through the insurance program is cost neutral in the aggregate. (See HAB Policy Notice 99-01.)
Build relationships with individuals who are integral to the success of the CARE Act-sponsored health insurance program
Several key partners are integral to the success of any insurance program. They include individuals such as the administrators of a State-run high risk health insurance pool, HIV/AIDS consumer groups and advocates, State insurance regulators, customer service and/or sales representatives of major insurance carriers in the State, clinical or medical providers, HIV case managers, county personnel, and other service providers.
All Title II programs should consider developing insurance coverage initiatives for PLWH. They are cost-effective, efficient and are often the best option to ensure access to care. The HIV/AIDS Bureau has undertaken additional activities to assess the effect of health insurance coverage programs on CARE Act clients and to educate grantees on the availability of these programs. HAB's Office of Science and Epidemiology has funded a study to determine the impact of using ADAP funds to purchase health insurance coverage and a primer to provide more extensive information on developing these programs. Title II programs seeking guidance on developing insurance purchasing programs for PLWH are encouraged to contact HAB staff and States with existing programs for additional information.
National Alliance of State and Territorial AIDS Directors (NASTAD). "Health Insurance Continuity for Persons Living With HIV: Trends in State Programs." Issue Brief, 2001. Available from the National Alliance of State and Territorial AIDS Directors (NASTAD), 444 North Capitol Street, NW, Suite 339, Washington, DC 20001; telephone (202) 434-8090; fax (202) 434-8092, or by visiting www.nastad.org.
Health Resources and Services Administration, HIV/AIDS Bureau. "Use of CARE Act Funds to Purchase Health Insurance for People with HIV/AIDS." Directions in HIV Services and Care Delivery: A Policy Brief, Number 4. Rockville, MD: U.S. Department of Health and Human Services, 1999.
 "Use of CARE Act funds to Purchase Health Insurance for People with HIV/AIDS," Directions in HIV Services and Care Delivery: A Policy Brief, No. 4.