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A MOVING TARGET

As health-care costs spiral upward, one in four West Virginians are uninsured at some point in the year. The state Insurance Commission predicts doubled insurance costs. In a continuing series, The Charleston Gazette explores the implications for all West Virginians.

 

When Sally Richardson was born in 1933, St. Mary's Hospital in Huntington charged her parents $25. Richardson still has the bill. Her father, a lawyer, kept it with his office files. Seventy years later, a birth costs more than $3,000 in hospital charges alone.

About 30 years ago, Richardson was driving her daughter and a little girl named Sonia to kindergarten. Today, Richardson and Sonia Chambers, chairwoman of the Health Care Authority, direct a $1 million project aimed at reducing the number of uninsured West Virginians by half.

They have formed the Health Advisory Council, which is made up of 125 state officials, community leaders, insurance company executives, politicians and health-care providers to help them do it.

When they wrote the federal grant to fund the project in April 2002, they intended to find a way to insure everybody in the state. A few months later, the state discovered that Medicaid — one of the primary health coverage tools — was more than $200 million in the hole.

"You have to realize that what we might have planned when we first got this grant would be different than what we have to plan now," Richardson said. "We have to plan with the understanding that, until the economy begins to get better in West Virginia, we cannot spend large dollars putting more people on insurance."

'We complement each other'

Almost 296,000 West Virginians between the ages of 19 and 64 didn't have health insurance in 2001, according to a survey Richardson directed for the West Virginia University Institute for Health Policy Research.

It won't be easy to cut that number in half, which is the group's current goal. West Virginia's budget is tight. Changes will have to be small and incremental, Richardson and Chambers said. They will start by targeting specific groups, parents of children insured through the Children's Health Insurance Program, for instance.

They have interviewed insurance agents and brokers and surveyed small business employers and employees. In early June, they brought together hundreds of business leaders in Charleston to hear experts explain why large numbers of uninsured people mean higher insurance prices for business.

Richardson helped direct a similar effort in the early 1990s, and she participated in the construction of the Clinton health-care plan. She said she learned how important it is to give business and the public early opportunities to understand the issues.

She and Chambers talk every day.

"We complement each other," Richardson said. "I read all the rules and regulations, and she knows how to get people to understand them." Chambers said she has regarded Richardson as a mentor since she began her career in government, when Richardson held the job Chambers holds now at the HCA.

These days, they talk about the fact that many employers say they can't handle more government mandates without help. They talk about the state's demographics: West Virginians are older and less healthy than people in most states, which makes it more expensive to get insurance here.

And they talk about the fact that many people who have insurance do not realize that the situation threatens them, too. A series of town meetings are planned for this summer to raise awareness of the problem and possible solutions.

The state's options

The people who serve on the Health Advisory Council have put hundreds of hours into the process. "We've got small business, we have hospitals, we've got government people in our group," said Gail Foley of Greenwood, one of the few uninsured people sitting on the committee. "With the steering committee, I think we're all realizing that we have to cooperate."

They will produce a set of proposals that will end up on Gov. Wise's desk, possibly before the 2004 legislative session begins.

"What we will end up with is an implementable plan for the state of West Virginia and recommendations for what the federal government might be able to do to help the situation," Richardson said.

About 30 other states have developed similar plans since 2000. Vickie Gates directs state coverage initiatives at Academy Health, a health policy research firm in Washington, D.C., that helps states with their planning grants, funded by the federal Health Resources and Services Administration.

"Many of them are looking at public-private partnerships," Gates said. People or businesses could buy into Medicaid, for example. Some states propose to cover more people with Medicaid or the Children's Health Insurance Program. Some want to form high-risk insurance pools and provide tax incentives.

The West Virginia group hasn't yet tackled ways to pay for its ideas. But it has put options on the table. The group reviewed them with the business leaders in early June.

"The ultimate goal is to get as close as we can to everybody having some kind of insurance," Chambers said. But before that can happen, the state has to maintain the progress it's already made, such as insuring more children through the Children's Health Insurance Program, she said.

"This is the kind of change you have to make incrementally," Richardson said. A big lesson from the Clinton administration's effort in the early 1990s, she said, was that one solution doesn't always work for everyone. People and their health care are too diverse to be covered by one approach.

In one option on the West Virginia group's table, the state would let uninsured people buy into the state Medicaid program. It wouldn't cost the state anything, but individuals would pay $200 a month. Premiums could be adjusted based on income, Richardson said. The state would have to help pay for that option.

Another approach would have the state give tax credits to individuals to help them buy health insurance. That would cost the state about $120 million.

Richardson leans toward expansion of Medicaid to cover more people. Medicaid already provides coverage to about 290,000 West Virginians. That approach costs less money, she said, because, for every dollar West Virginia puts into Medicaid, the federal government puts in three more. West Virginia has one of the nation's most favorable match ratios.

"Expanding Medicaid would be a damn good idea," said consultant Larry Lewin, founder of the Lewin Group, the consulting firm which is detailing the state plan. Lewin is also advising presidential candidate Howard Dean on his health insurance plan.

Challenges ahead

West Virginia does not have many extra dollars for Medicaid expansion and other options. To come up with last year's match from the federal government, legislators raised the tobacco tax to help fill a $240 million gap in the state budget.

"The biggest challenges clearly are ahead of us," said Perry Bryant, a government relations specialist with the West Virginia Education Association. "It's a daunting task, particularly in light of the state's financial situation."

Richardson said she hopes the town meetings will drum up public support.

"Until people feel that strongly about it, you're not going to get sources of revenue easily, because, for all of this, nobody wants to raise taxes," Richardson said. "You have to be more inventive about how you find those sources of revenue."

Legislators will face other obstacles if they take up the challenge:

  • The Bush administration is proposing limits on federal Medicaid spending.
  • A slumping economy and a decline in state revenue could lead to more gaps in Medicaid funding. Actuaries are already predicting a $20 million deficit for the Children's Health Insurance Program by 2007.
  • Hospitals in West Virginia are proposing about $650 million in new construction, expansion and technology, a trend that some believe raises health-care costs. "When these hospitals compete and duplicate services and technology, it drives the prices out of site," said Greg Smith, CEO of Mountain State Blue Cross/Blue Shield.
  • The state's Insurance Commission predicts that health insurance premiums could double by 2008 if health-care costs aren't checked.
  • "At some point, somebody has to take a hold of the rising costs of health care," Richardson said. "We can't do everything with this grant, but at some point that will have to be looked at."

    Public must voice concern

    The public has to let the Legislature know they're concerned, Richardson said. "I can remember when people got out of this state and marched on Washington," said Richardson. "They did it for the Million Man March, they did it for AIDS, they did it for women's rights, they did for abortion rights, and they did it against abortion rights.

    "But nobody has ever said that this is an important enough subject that our state capitals and our federal capital understand the size of this problem."

    Health Advisory Council member Foley said she would march. She sells herbs and potpourri from her home. Her husband, Richard, installs drywall and works other construction jobs.

    They can't afford health insurance for themselves, and two of their children are covered by the Children's Health Insurance Program. She had questions for the federal government, which is paying for the state's planning effort.

    "Are we just churning our fields here or what?" she asked. "Are we all wasting our time, or are they actually going to use some of this planning? Otherwise, they could have taken that million dollars, and we could have given it to people to pay for their health care."

    Staff writer Kate Long contributed to this story.

    To contact staff writer John Heys, use e-mail or call 348-1254.

     

    Plans on the table

    The Health Advisory Council, a group of state officials, community leaders, insurance company executives, politicians and health-care providers, is looking at different ways to reduce the number of uninsured people in West Virginia.

    Here are some options they're considering and the estimated costs for the state:

  • Making more adults and children eligible for Medicaid by raising the income limits. Cost: Depending on how much coverage is expanded, costs range from $1.9 million to $40.8 million
  • Letting individuals with certain income levels and employers buy into the Medicaid program. Cost: nothing
  • Creating and subsidizing a low-cost, stripped-down benefits plan that private insurers can sell to individuals for about $280 a month. Cost: $2.3 million
  • Giving employers a tax credit to help them pay for health insurance for their employees. The credit would equal 40 percent of what the employer pays for premiums. Cost: $5.4 million
  • Giving individuals a tax credit so they can buy their own health insurance policies. An individual would get a $1,500 tax credit; families would get a $3,000 credit. Cost: $119.6 million
  • Creating high-risk insurance pool for people who can't get regular health coverage due to illness. The standard premium would be about $365. Twenty-two other states have such pools, which the federal government partially supports with grants. Cost: $1.7 million
  • Source: Lewin Group


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