You asked for an evaluation of New Jersey's Health Wellness Promotion Act.

SUMMARY

New Jersey's Health Wellness Promotion Act (HWPA) requires health insurers, with certain exceptions, to cover 18 specific preventive tests and physician actions. Self-insured employers, all small employer plans, and some government payers are exempt from the law's mandate. The law caps the value of covered benefits, but it provides for annual inflationary adjustments to the caps. Enacted in 1999, it took effect only after final regulations were issued in November 2000.

The Rutgers University Center for State Health Policy recently prepared an initial evaluation of the act for the state's Department of Health and Senior Services. Because the law had been in effect for only five months when the evaluation began, center analysts focused only on the number of people affected and the perceptions of "stakeholders," that is, insurers' medical directors and general physicians.

HWPA affected only a small number of policies, the center found, due to its various insurer exemptions. These covered approximately 900,000 employees and, potentially, 600,000 dependents. But center researchers

believe that HWPA did not actually affect many of these 1. 5 million adults because their existing policies already covered some or all of the mandated benefits.

HWPA could result in premium increases over time comparable to the additional cost of the benefit, but none of the plans reported increases at the time of the survey. The medical directors said that HWPA's benefit caps do not cover the cost of services. Some said they have changed their coverage to meet the law's requirements, which reduced payments to providers in some instances.

Most medical directors said it was too early to tell whether HWPA has resulted in increased use of preventive care services. They assumed it would have minimal effect because most services were already provided.

HWPA mandates only what services are covered; carriers are not required to recommend these services to their providers or consumers. And, most medical directors say, they do not. Instead, they continue to rely on preventive service guidelines issued by national organizations, many of which differ from HWPA's mandates. And directors did not plan to educate network physicians or consumers about HWPA beyond changing membership handbooks to reflect changes in covered services.

HEALTH WELLNESS PROMOTION ACT PROVISIONS

When HWPA was first enacted in 1993, it required health insurers to offer purchasers at least one contract covering a statutory schedule of preventive health benefits. In 1999 this "mandatory offer" was converted to a mandatory benefit, requiring health insurers to cover 18 tests and actions in all commercial policies and contracts offered in the state. Table 1 describes these mandates.

Table 1: HWPA Benefit Mandates

The law excludes many categories of insurers from these mandates, including Medicaid, Medicare HMO and supplement plans, workers' compensation, and individual and small group employers (those with fewer than 50 employees). Federal law exempts self-insured employers. A separate state law requires individual and small group policies to provide up to $ 300 in first-dollar coverage (i. e. no deductible or co-payment) for preventive services.

HWPA caps the total value of the covered benefit. The state banking and insurance commissioner annually adjusts these caps for inflation. The current caps are $ 158 for people age 20-39, $ 184 for men age 40 and older, $ 299 for women age 40 and older, and $ 190 for left-side colon exams.

EVALUATION

Number of People Affected

Because of its various exemptions, HWPA essentially mandates coverage only for people insured through large employers (50 plus employees) who do not self-insure. And it expands coverage for people in this group only if their policies did not previously cover the specific services it mandates. The center found that, relative to the total number of policies in New Jersey, HWPA expanded coverage for only a small number of policies.

The data center researchers used (the Medical Expenditure Panel Survey Insurance Component-MEPS-IC, a national survey of 23,000 employers) indicate that in 1998 approximately 900,000 employees were enrolled in insured plans that could be affected by HWPA. Assuming two-thirds of these employees covered an adult dependent, HWPA could affect at most 1. 5 million people, or 28% of New Jersey adults.

But many of these people may have already had coverage for HWPA's mandated services under their existing policies. New Jersey HMOs have long been required to cover comprehensive preventive care benefits, including examinations every five years for adults under age 40, every three years for adults ages 40 to 60, and every two years for adults over age 60. All insurers were required to cover annual mammograms for women over age 40. Center researchers conclude that these requirements and related national data "suggest significant pre-existing coverage of several of the HWPA services. "

The medical directors surveyed said most of the carriers previously covered HWPA services if a doctor ordered them, even if they did not conform to the plan's recommendations about test frequency.

Effect on Insurance Premiums and Provider Payments

Many of the medical directors believed that HWPA would result in premium increases over time comparable to the additional cost of the benefit, but none of the plans reported increases at the time of the survey. The Senate Health Committee's report to the legislature anticipated HWPA would have a "small indirect impact" on the state for its costs of insuring state employees.

The medical directors said that HWPA's benefit caps do not cover the cost of services. For example, under HWPA women over age 40 receive the same preventive care as men plus a biannual Pap test and an annual mammogram. The benefit cap for men of this age was $ 145 (at the time of the evaluation) and for women, $ 235. The $ 90 difference did not, the directors stated, cover the cost of the extra services. (Under the inflation-adjusted caps now in effect, the difference is $ 115. )

Since HWPA's implementation, some directors said they changed their coverage to meet the law's requirements. In some instances this resulted in reduced payments to providers.

Effect on Service Use

Most medical directors said it was too early to tell whether HWPA has resulted in increased use of preventive care services. They assumed it would have minimal effect because most services were already provided. But they all agreed that preventive care services are underused, even among their own managed care members.

They attributed this underuse mainly to patients' lack of knowledge about the benefits of preventive care and their pattern of seeking medical care only when they are sick. They also cited cultural and language barriers and transportation problems as patient-related reasons. On the provider side, directors mentioned the limited availability of preventive services outside of normal business hours as a reason employees might not take advantage of covered services. They also said that poor record keeping and record sharing prevented them from informing individuals about preventive tests they might need.

Preventive Care Recommendations and HWPA

According to the medical directors, before HWPA's passage nearly all of their managed care plans disseminated preventive care guidelines to their network physicians. Most of these were established by national professional organizations. None of the directors indicated they would be changing these recommendations as a result of HWPA even though the law's schedule of tests differed from various national guidelines.

These differences between HWPA and national guidelines led many directors to criticize some of the HWPA-mandated services. The most controversial were annual blood tests for hemoglobin, glucose, and cholesterol for all adults and a glaucoma eye test every five years for people over age 35. The directors felt there was no conclusive evidence to support these benefits. The few doctors who were interviewed (only three) supported the medical directors' contentions.

Awareness of HWPA Requirements

HWPA mandates only what services are covered; carriers are not required to recommend these services to their providers or consumers. And, most medical directors say they do not. Nor were the directors planning to educate network physicians or consumers beyond changing membership handbooks to reflect changes in covered services.

The directors themselves evinced a broad range of awareness about HWPA ranging from substantial to none. (A director's lack of knowledge does not mean the plan is not in compliance; another administrator could be responsible for compliance. ) The physicians interviewed were "totally unfamiliar with the legislation and its coverage requirements. "

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