COD E R E D

Finally, several of the safety net models are taking a broad view of health-relatedservices that are necessary to meet the array of medical, social, behavioral and financial needsof the uninsured. Explicit linkages to social services, transportation and local public healthservices allow coordination between treatment and prevention programs. The linkages rangefrom consolidation, to sharing of facilities, to referral arrangements.Innovative Coverage InitiativesThe issues that must be addressed by local initiatives to extend public and privatecoverage include benefit design, cost, target population, financing, marketing, provider choice,program duration, enrollment and operations, and transition.Benefit Design: The level of benefits and services offered by the health plans variedsignificantly, reflecting different approaches to creating affordable products. Some of the healthplans offered comprehensive services with limited cost-sharing, patterned after productsavailable to other commercial members. In an effort to reduce the cost of coverage, othersprovided more limited benefit packages and greater cost-sharing. Several health plans conductedextensive market research to develop the optimal benefit package. Regardless of which strategywas followed, plans that were stable and reasonably adequate to meet most basic needs of thepatient population seemed to attract more enrollees. The reason a particular product attracted itsintended audience was more attributable to a combination of the benefit package with productprice, marketing approach, and/ or target population.Cost and Financing: Lack of affordable products is the reason many are uninsured andinnovative health plans attempt to find methods to lower product premiums. Several productshave been made available at 50% of commercial rates. Some have premiums of less than $100(for individuals), with most offering some variation of the product at less than $50. These rangesreflect the results of market research, which have consistently shown that $50-$100 per monthis the maximum price low-wage workers are willing to pay for health coverage.The health plans used numerous methods to reduce premiums, through negotiateddiscounts with providers, rate stability, limited benefit packages, plan subsidies, enhanced costsharing, lower profit and administrative fees, and premium alternatives. Despite lower premiums,some plans found that their products did not attract the anticipated number of customers,because (a) the premium remained out of reach; (b) the product’s benefits were viewed asinsufficient for its price; or (c) the product seemed less desirable in comparison with thecompany’s other offerings. Low-priced products do not necessarily attract the anticipated numberof customers.All of the products charged co-payments to lower premiums, ranging from a low of $2 forprimary care office visits to a high of $500 per day for a hospital stay. Products that usedincreased cost sharing mechanisms experienced good enrollment, but no data exists todetermine if cost sharing has deterred members from seeking necessary health care.Some small business and individual products have become break-even or profit-making.Others must be financed in part by moderate to heavy subsidies. The presence or absence ofplan subsidies does not appear to be a defining factor in attracting the uninsured. But healthplans may find some advantages in subsidizing products such as enhancing the provider-planrelationship through partial reimbursement for services which would otherwise beuncompensated. Also, some health plans recognized the uninsured as a potential future marketfor individual or group coverage, since most people do not remain uninsured permanently. Plan-D-29