Agenda Item 8c
Review of the MRMIP Benefit Plan Design
Major Risk Medical Insurance Program
During last year’s negotiations on AB 1971, a number of issues were raised about the MRMIP
benefit plan design. The last version of the bill in print would have required MRMIB to make
several changes to the design, and these changes would have taken effect January 1, 2008.
These issues are likely to be revisited in legislation introduced this year.
MRMIB has not conducted a review of MRMIP’s benefit plan design in some years. In fact, it has
not been possible for MRMIB to do a comprehensive review since enactment of AB 1401 which
prohibited any benefit changes that would reduce the actuarial value of the benefit package.
MRMIP does not have a deductible. It does not have an overt requirement for plans to provide
disease or case management, relying instead on the plans to apply to MRMIP subscribers the
practices in their commercial business. There is variation in some benefits and in the co-pays and
deductibles for benefits.
SB 1702, enacted after the failure of AB 1971, extends the AB 1401 sunset to December 31,
2007. Most of the benefit design issues raised in the legislation are within MRMIB’s
administrative authority. Two notable exceptions: 1) raising the benefit cap above its present $
75,000 level. The Board has the authority to change the benefit cap in regulation, but, absent a
substantial expansion of MRMIP’s funding, cannot do so with fiscal integrity and 2) establishing a
deductible over $500 (discussed below).
CMS has given MRMIB a $150,000 seed grant for a feasibility study addressing a range of issues
involved in restructuring MRMIP’s financing in order to become a qualified high risk pool eligible
for additional federal funding.
Given the availability of federal seed grant funds, staff proposes undertaking a review of the
MRMIP benefit plan design. To the extent the review indicates a need for changes in the design,