Insurance At A Premium

June 30, 2006
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LANSING — After wrapping up a nearly year-long study of the uninsured, the Advisory Council for the Michigan State Planning Project for the Uninsured endorsed the concept of the Michigan First Health Care Plan, the state-sponsored health insurance program proposed by Gov. Jennifer Granholm.

The 30-member advisory council recently delivered a set of recommendations to the Michigan Department of Community Health on extending health insurance coverage to uninsured Michigan residents. 

The council, which included representatives from both large and small businesses, chambers of commerce, unions, insurers, health care plans, providers and consumers, convened last August and commenced collecting data on the uninsured through a number of surveys, focus groups and townhall meetings.

The group’s stance from the outset was that the state is at a “tipping point” in history, where everyone has issues with health care financing and delivery systems, according to Project Manager Lonnie Barnett, manager of Community Health’s Health Planning and Access to Care Section.

“As this council has been working, some of the themes they had identified were picked up by the governor’s office and they (the governor’s staff) moved forward with their proposal to create a Michigan First Health Care program,” he pointed out.

Survey data showed:

  • Covering health care expenses of the uninsured adds an extra $730 a year to the average family policy and $274 per year for an individual policy.
  • Uninsured adults have a 25-percent greater mortality risk than insured adults.
  • Michigan: 10.9 percent of adults uninsured; 3.7 percent of children.
  • Detroit: 17.5 percent uninsured.
  • Northern Lower Peninsula: 16.5 percent uninsured.
  • West Central (Grand Rapid) region: 10.8 percent uninsured.
  • 25 percent of the uninsured live at or below the federal poverty level.
  • 60,000 uninsured households were offered coverage but couldn’t afford the premiums.
  • 40 percent of employers don’t offer health insurance.
  • Majority of those employers believe they can’t afford coverage.
  • Majority of employers that do offer coverage plan to shift more cost to employees.
  • 10 percent plan to discontinue coverage.

The information revealed that those who are uninsured don’t necessarily fit the stereotype of the uninsured, Barnett said.

“For the most part, people without health insurance are people like you and me who are working full time or maybe have more than one part-time job,” he pointed out. “The reality is that these folks are working. It’s not that people don’t have health insurance because they’re not willing to get a job.”

Lody Zwarensteyn, a member of the advisory council and president of the Alliance for Health, said that general misconception about the uninsured isn’t totally surprising, but it does need underscoring.

“Whether insurance is not available to them, whether insurance is too expensive for them, or whatever it is, we have to start linking more people up to insurance,” Zwarensteyn remarked.

In addition to supporting the concept of the Michigan First Health Care Plan, the council recommended that the state:

  • Educate the public on the impact of having 1.1 million uninsured residents; 

  • Improve Michigan’s business climate by covering the uninsured;
  • Address the adequacy or Medicaid payment rates;
  • Strengthen the health care safety net provider system for the most vulnerable;
  • Provide incentives for employers to offer dependent coverage;
  • Maintain high levels of coverage for children;
  • Create a non-governmental, bipartisan successor council to continue the focus of securing health insurance coverage for Michigan’s uninsured.

The recommendations represent a “significant step forward for concretely addressing” the status of the state’s uninsured population, said Kevin Seitz, so-chair of the advisory council and president and CEO of Blue Care Network.

“We brought together a diverse group with different perspectives on this critical issue, and built consensus around a very realistic direction for Michigan to improve its overall health care coverage.”

The next question is, how do backers give this thing legs? The Alliance for Health and Kent Health Plan not only support the recommendations, but intend to make everybody in West Michigan aware of them.

“What we want to do here in West Michigan is carry this message to the different constituencies,” Zwarensteyn said. “There’s a strong business message that has to be heard. There’s a strong political message on Medicaid reimbursements that has to be heard. There is a strong personal responsibility message that has to be heard.” 

For example, 25 cents on every dollar spent by businesses on health care pays for the cost of unreimbursed care provided to those without coverage, Zwarensteyn pointed out. For insurance to work properly, he said, the state needs to cover the largest number of people — healthy and not healthy — so that the cost and risk is spread out.

He said advisory council members recognize that the Michigan First Health Care Plan is evolving; it’s still a work in progress.

“If the waivers can be gotten, and the financing found, and the agreement on the funding can be reached and so on, that plan would alone cover half of the uninsured in Michigan,” he said. “Health care is really is too important to the economy and the quality of life in Michigan to be a political issue. Can you imagine someone saying that they don’t like the idea of covering half of the uninsured? It’s not very hard at all to endorse the concept of the Michigan First plan.”    

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