July 2001

Grant Results

SUMMARY

During 1996 and 1997, the National Health Foundation led a coalition of private sector organizations to test the feasibility of developing a low-cost primary care-only insurance product for uninsured Los Angeles County residents. Project staff conducted:

  • Research on insurance product design.
  • Focus groups with potential consumers.
  • Meetings with health plan representatives, provider groups, and community and small business organizations.

The National Health Foundation, based in Los Angeles, is a nonprofit organization dedicated to improving health care delivery and access.

Key Findings

  • Enrollment in other states' programs was relatively low, except in several highly subsidized programs.
  • Enrollee dollar contributions varied among existing programs because of different subsidy levels, yet benefit structures appeared relatively comprehensive, including some inpatient coverage.
  • Subsidization of individual enrollees was typically based on threshold income levels, with enrollees above 175 percent or 200 percent of the federal poverty level receiving no subsidy.
  • Focus group participants were generally interested in low-cost insurance products, and valued insurance as a concept.
  • Focus group participants generally preferred a full-benefit product, but a low-cost primary care-only insurance product was not rejected and was generally preferred over catastrophic and preventive care products.

Funding
The Robert Wood Johnson Foundation (RWJF) supported this project through a grant of $141,904.

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THE PROBLEM

The National Health Foundation proposed this project because of concerns that the health care safety net (that is, the system providing low-cost or no-cost care for people with no other access) could not handle the large numbers of uninsured Los Angeles County residents, which at the time was 2.6 million people.

The foundation, based in Los Angeles, is a nonprofit organization dedicated to improving health care delivery and access.

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THE PROJECT

During 1996 and 1997, the National Health Foundation led a coalition of private sector organizations to test the feasibility of developing a low-cost primary care-only insurance product for uninsured Los Angeles County residents.

A coalition of private sector organizations known as 4 the Health of LA (4HLA), created a low-cost primary care-only insurance product that could be piloted in Los Angeles County. With this grant, the National Health Foundation led 4HLA in testing the feasibility of this product in light of the expansion of managed care in California and the large numbers of uninsured people there.

Based on preliminary data collection and a review of other products, project staff determined that a low-cost managed care health insurance product could help alleviate the uninsured problem, and that a small-scale demonstration pilot should include:

  • A focus on primary care, preventive care, and prescription drugs.
  • Innovative marketing.
  • Demand-management technologies (similar to an advice telephone line used at some emergency rooms to triage patients).
  • The involvement of health plans in product design.

Project staff conducted:

  • Research on insurance product design.
  • Three focus groups with potential consumers.
  • Meetings with health plan representatives, provider groups, and community and small business organizations.

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FINDINGS

From the review of low-cost insurance products offered in other states:

  • Enrollment in other states' programs was relatively low, except in several highly subsidized programs.
  • Enrollee dollar contributions varied among existing programs because of different subsidy levels, yet benefit structures appeared relatively comprehensive, including some inpatient coverage.
  • Subsidization of individual enrollees was typically based on threshold income levels, with enrollees above 175 percent or 200 percent of the federal poverty level receiving no subsidy.
  • Most uninsured programs focused on employees of small groups and their dependent children, or exclusively on children.
  • Provider networks were usually more restrictive for these products than for other health plans and involved the increased use of community health centers and low-cost providers.
  • Both traditional and nontraditional marketing approaches were used by uninsured program sponsors, and marketing was a key factor in product viability.
  • Based on research conducted by Basic Health Plan (a Washington state product) regarding characteristics of uninsured people who purchased low-cost products, common characteristics were households with two parents and younger children, individuals with higher education, and individuals previously enrolled in an insurance program.
  • Premiums for existing products were above the targets the group hoped to offer in the Los Angeles market.
  • Of the 2.6 million uninsured residents in Los Angeles County, 780,000 were above 200 percent of the federal poverty level, the low end of the targeted income range for the product.

From the focus groups:

  • Participants were generally interested in low-cost insurance products, and valued insurance as a concept.
  • Price points for limited benefit products may lie at the lower ranges of the initial hypotheses, but an openness to copayments and deductibles indicated an opportunity for achieving low premiums.
  • Participants generally preferred a full-benefit product, but a low-cost primary care-only insurance product was not rejected and was generally preferred over catastrophic and preventive care products.

Project staff made two presentations on the project and created and distributed a report and a booklet on the project findings. After the grant ended, the California Small Business Association took over the National Health Foundation's coordinating role in the project.

Some of the participating health plans, including Kaiser Permanente and HealthNet, have since offered low-cost insurance products.

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GRANT DETAILS & CONTACT INFORMATION

Project

Planning a Low-Cost Ambulatory Managed Care Insurance Product for Uninsured Los Angeles Residents

Grantee

National Health Foundation (Los Angeles,  CA)

  • Amount: $ 141,904
    Dates: August 1996 to January 1997
    ID#:  029119

Contact

Rita Moya
(213) 538-0700
rmoya@nhfca.org

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Books and Reports

Project staff. Development of Low-Cost Insurance Products for Uninsured Residents of Los Angeles. Los Angeles, Calif.: National Health Foundation, 1997.

Presentations and Testimony

Rita Moya, "Planning a Low-Cost Ambulatory Managed Care Insurance," at the "Getting the Uninsured Insured: Public and Private Efforts" California Wellness Foundation conference, January 31, 1997, Sacramento, Calif.

Marlene Larson, "Planning a Low-Cost Ambulatory Managed Care Insurance," at the annual Applied Business Leaders conference, January 17, 1997, Los Angeles, Calif.

Print Coverage

"AMPTP prexy counter chairs health effort," in Daily Variety, November 22, 1996.

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Report prepared by: Robert Crum
Reviewed by: David Kales
Reviewed by: Janet Heroux
Program Officer: Terri G. Appel

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