Topic:
HEALTH INSURANCE; LEGISLATION; MANAGED CARE;
Location:
INSURANCE - HEALTH; INSURANCE - HEALTH - MANAGED CARE;

OLR Research Report


July 24, 2008

 

2008-R-0403

BACKGROUNDER: CHARTER OAK HEALTH PLAN

By: Robin Cohen, Principal Analyst

The state has taken numerous steps over the last several years to help more residents obtain affordable health insurance. Starting August 1, the Charter Oak Health Plan will be one such step, offering managed health care to uninsured residents regardless of their health status.

ENABLING LAW

PA 07-2, June Special Session, established the Charter Oak Health Plan for residents who have been uninsured for at least six months. It authorized the Department of Social Services (DSS) to procure the insurance through contracts with managed care organizations or other health care provider consortia. DSS was directed to determine the program's scope of benefits, and could not impose a pre-existing condition exclusion. The law also addressed cost sharing, allowing Charter Oak plans to impose the following:

1. monthly premiums;

2. a maximum $1,000 annual deductible;

3. coinsurance of no more than 20% once the deductible is met;

4. tiered co-payments for prescription drugs;

5. no fees for valid emergency room visits, with a maximum $150 fee for non-emergencies;

6. annual benefit limit of $100,000 and

7. a lifetime benefit of up to $1 million.

The law offers premium assistance to individuals with income under 300% of the federal poverty level (FPL). DSS can provide $175 in monthly assistance to individuals with incomes below 150% of the FPL ($15,600 annually for one person in 2008) and $50 monthly for individuals with income between 235% and 300% of FPL. Although the law does not specify the amount of the monthly premiums, the goal was for it not to exceed $250.

IMPLEMENTATION

DSS issued a request for proposals to health insurers in fall 2007. At that time it decided to combine Charter Oak with the HUSKY program so that a winning bidder could spread the risk among HUSKY and Charter Oak members. A community health center consortia and two other managed care organizations bid on the joint program—CHNCT, Aetna Better Living, and AmeriChoice (United Health Care's parent company), respectively.

Agreements were reached between all three plans and DSS in June 2008. DSS has set up a dedicated website (www.charteroakhealthplan.com) that provides general program information as well as “Quick Start” applications. Predeterminations of eligibility are made based on these applications, and letters seeking additional information, if needed, are sent before making final determinations, which includes the mailing of an enrollment form for choosing a plan. The plans will begin serving Charter Oak members on August 1.

BENEFIT PACKAGE AND CO-PAYMENTS

Table 1 lists Charter Oak's benefits; limits on them, if any; and co-payment requirements. Dental, vision, and chiropractic services are not covered.

Table 1: Charter Oak Benefits and Co-Payments

Benefit

Scope of Coverage and Co-Pay

Primary care office visit

$25 co-pay

Specialist office visit

$35 co-pay

Preventive care office visit

100% coverage

Emergency room visit

$100 co-pay (waived if emergency)

Prescription drugs

Tiered co-pays: $10 for generics, $35 for brand name drugs on formulary, full cost or $35 with medical exception for non-preferred drugs

Durable medical equipment

$4,000 annual limit with prior authorization (PA), no co-payment (limit excludes diabetic and ostomy supplies)

Behavioral health services (provided through Behavioral Health Partnership) [1]

Outpatient: $35 co-pay for outpatient visits, substance abuse visits limited to 30 per year; PA required for both.

Inpatient: admissions require PA, with limits on drug and alcohol stays; 10% co-pay after deductible met

Outpatient rehabilitation

$35 co-pay, 30 visits per year

Maternity—pre- and post-natal care

100% covered

Inpatient rehabilitation/skilled nursing

80% covered after deductible met, 14-day limit per year

Inpatient hospital stays

90% covered after deductible met

Outpatient surgical

80% covered after deductible met

[1] For a more complete description of mental health benefits, go to:

Source: Charter Oak Health Plan website

PREMIUMS AND DEDUCTIBLES

Charter Oak members pay monthly premiums to the MCOs and must meet deductibles. For the nonsubsidized plans, the actual premiums will be: CHN: $256.71, AmeriChoice: $250.89, Aetna Better Health, $259.36. These are reduced for members with incomes below 300% of the federal poverty level. The deductibles must be met before the program begins paying for inpatient hospital, outpatient surgical, and inpatient rehabilitation and skilled nursing care. Table 2 illustrates both.

Table 2: Charter Oak Premiums and Deductibles

Family Size/Income in 2008

Monthly Premium, per member

Annual Deductible (individual/family)

1

2

3

4

5

6

under 15,600

under 21,000

under 26,400

Under $31,800

Under $37,200

Under $42,600

$75

$150/$300

$15,600 to $19,240

21,000 to 25,900

26,400 to 32,600

31,800 to 39,320

37,200 to 45,900

42,600 to 52,500

100

200/350

19,240

to 24,400

25,900 to 32,900

32,600 to 41,400

39,200 to 49,400

45,900 to 58,300

52,500 to 66,700

175

400/600

24,400 to 31,200

32,900 to 42,000

41,400 to 52,800

49,800 to 63,600

58,300 to 74,400

66,700 to $85,200

200

750/1,400

Over 31,200

Over 42,000

Over 52,800

Over 63,600

Over 74,400

Over 85,200

$259 maximum

900/1,750

Source: Charter Oak Health Plan website

RC:tjo