CHIP OVERVIEW

Basic Access Issues Basics of Cost-Sharing Designing Premiums Crowd-outSource: HCFA web page –

presentations by Shuster, Ullman and Weinick.

IMPACT ON ACCESS TO HEALTH CARE

Usual Source of Health Care

Level of Services

Quality, Continuity, and Satisfaction With Care

HEALTH INSURANCE AND ACCESS TO CAREPercent with No Usual Source of Care

20.2

10.0

5.6

0

5

10

15

20

25

Uninsured Public Private

HEALTH INSURANCE AND USUAL SOURCE OF CARE SITE

Percent with Office-Based Usual Source of Care

68.574.8

86.7

0

25

50

75

100

Uninsured Public Private

Source: Weinick, Weigers, and Cohen, 1998 (1996 MEPS)

HEALTH INSURANCE AND BARRIERS TO CARE

Percent of Families Experiencing Barriers to Care

23.4

12.2

7.0

0

5

10

15

20

25

30

One or more membersuninsured

All members publicinsurance

All members privateinsurance

Source: Weinick, Zuvekas, and Drilea 1997 (1996 MEPS)

HEALTH INSURANCE AND PHYSICIAN CONTACT

Percent of Children with Any Physician Contact

54.0

72.677.3

0

25

50

75

100

Uninsured Public Private

Source: Monheit and Cunningham, 1992 (1987 NMES)

HEALTH INSURANCE AND WELL-CHILD VISITS

Percent of Children with Well-Child Visits

48.556.4

64.7

31.438.0

47.5

0

25

50

75

Uninsured Public Private

Any visits Recommended visits

Source: Short and Lefkowitz, 1992 (1987 NMES)

IMPACT ON USE AND EXPENDITURES

Uninsured Children Use Fewer Health Care Services Than Insured Children

Uninsured People Spend a Greater Proportion of Their Income on Health Care Services Than the Privately Insured (Taylor and Banthin 1994)

IMPACT ON HEALTH STATUS AND HEALTH OUTCOMES Adverse Health Outcomes Appear to Be

Related to Being Uninsured

Avoidable Hospitalizations for a Variety of Conditions Are More Common Among the Uninsured Than the Privately Insured

Uninsured Newborns Are More Likely to Have Adverse Outcomes Than the Privately Insured

Source: Office of Technology Assessment, 1992; Weissman, Gastonis, and Epstein, 1991

IMPACT ON HEALTH STATUS AND HEALTH OUTCOMES The Uninsured Are More Likely to

Experience avoidable hospitalizations

Be diagnosed at later stages of disease

Be hospitalized on an emergency or urgent basis

Be more seriously ill upon hospitalization

Die upon hospitalization

Source: Office of Technology Assessment, 1992

HOW MANY CHILDREN ARE UNINSURED?

Health Insurance Status ofChildren Under Age 18

63.8%

15.4%

20.8%

Uninsured

Public

Private

HEALTH INSURANCE AND AGE

Percent Uninsured by Age

13.215.5

17.9

0

5

10

15

20

25

Less than 6 6-12 13-17

Source: Weinick, Weigers, and Cohen 1998 (1996 MEPS)

HEALTH INSURANCE AND RACE

Percent Uninsured

27.7

17.6

12.3

0

5

10

15

20

25

30

Hispanic Black White

HEALTH INSURANCE AND FAMILY STRUCTURE

Single-Parent Families

38.7%

19.8%

41.5%

Uninsured

Public

Private

Two-Parent Families

73.7%

13.6%

12.7%

HEALTH INSURANCE AND PARENTS’ EDUCATION

Percent Uninsured by Parents' Education

28.5

17.9

10.1

0

5

10

15

20

25

30

35

<12 years 12 years >12 years

Source: Weinick, Weigers, and Cohen 1998 (1996 MEPS)

HEALTH INSURANCE AND PARENTS’ EMPLOYMENT

Percent Uninsured by Parents' Employment

15.819.1

11.4

0

5

10

15

20

25

0 1 2Number of parents employed

Source: Weinick, Weigers, and Cohen 1998 (1996 MEPS)

HEALTH INSURANCE AND WHERE CHILDREN LIVE

Percent Uninsured by Metropolitan Statistical Area Status

14.0

20.7

0

5

10

15

20

25

30

MSA Non-MSA

Source: Weinick, Weigers, and Cohen 1998 (1996 MEPS)

BACKGROUND

Traditionally, Public Insurance (Medicaid) Was for the Poor and Was Free

As Government Programs Expand to Serve Uninsured People in Working Class Families, Then Issues of Cost-Sharing Become More Relevant

Premiums Have Been Used in Family-Based Expansion Programs, Like Tenncare or Washington's Basic Health Plan, and Are Now Being Permitted in CHIP Programs

Sliding Scale Premium: Reduces participation and government share of cost

Copayment: Amount Paid by the Person to Get Specific Medical Services (e.g., Office Visit or Prescription Drugs) Copayments affect whether an insured person

gets a specific service, affect health care utilization

Reduces cost per covered person

BASICS OF COST-SHARING

Reduces Government Cost, Both by Sharing Burden and Lowering Participation

Targets Assistance and Subsidies to the Poorest

May Reduce Problems of Welfare and Medicaid Dependency

May Reduce Crowd-Out May Reduce Stigma

ADVANTAGES OF PREMIUMS

Lowers Participation Might Lead to Adverse Selection Requires More Administrative

Effort Might Break Up Coverage, If

People Enter and Exit When They Can Afford

DISADVANTAGES OF PREMIUMS

May Reduce Unnecessary Medical Care Use

Can Be Tailored to Accomplish Specific Purposes, e.g., High Copayment for ER, but None for Preventive Services

Can Supplement Provider Payments

ADVANTAGES OF COPAYMENTS

Barrier to Care Can Reduce Use of Cost-Effective

Services Harder for Provider, Could Reduce

His/Her Payment

DISADVANTAGES OF COPAYMENTS

RAND Health Insurance Experiment: Generally, Copayments Reduced Medical Utilization and Expenditures, but Did Not Affect Health Status except among poor

Prescription Drugs: Copayments Reduce Drug Use, Could Increase Hospitalization Costs

Tenncare: Many Went Without Medication Because of Drug Copayments

RESEARCH ON COPAYMENTS

DESIGN OF PREMIUM STRUCTURES

How Low and How High? Progressivity Stairsteps Fixed Dollars or Fixed

Percentages? Equity for Individuals and

Families

Tenncare: Sliding Scale Premiums Between 100 and 400% of FPL, Full Premiums Above 400%; Copayments

Hawaii QUEST: Sliding Scale Premiums Between

100 and 300% of FPL

Washington Basic Health Plan: Sliding Scale Premiums Between 0 and 200% of Poverty, Free for Children Thru Medicaid Expansion (State Funded)

Minnesotacare: Sliding Scale Premiums for Families With Children Between 0 and 275% of Poverty, for Childless Adults Between 0 and 135% of Poverty

FOUR STATES WITH FAMILY EXPANSIONS - 1995

ESTIMATED PARTICIPATION FUNCTION, BASED ON THREE STATES, 1995

As Premiums Rise, Participation Levels Fall

Even When Free, Some Do Not Participate

There Is No "Right" Level for Premiums

Trade-Off Between Budget and Participation Goals, As Well As Perception of What Seems "Fair"

MAIN FINDINGS OF ANALYSIS

Includes Children Only, People May Be More Willing to Insure Children

Other Factors Matter Too: Publicity, Ease of Application, Type of Benefit Package

Interactions With Medicaid Federal Rules on Premiums and

Copayments Constrain Choices

CHIP MIGHT BE DIFFERENT

If Medicaid Expansion, Then Follow Medicaid Rules, Essentially Banning Cost-Sharing

If CHIP-Only, Then Premiums in Families Below 150% of Poverty Must Not Exceed "Nominal" Levels, Related to Medically Needy Rules …Modest copayments permitted

If CHIP-Only, Then Total Cost-Sharing in Families Above 150% of FPL Must Not Exceed 5%… No copayments on preventive services

WHAT ARE COST-SHARING RULES IN CHIP?

PRIVATE INSURANCE: OFFER RATES

Percent of All Workers Offered Employment-Related Coverage

72.475.4

50

55

60

65

70

75

80

1987 1996

Source: Cooper and Schone 1997 (1987 NMES and 1996 MEPS)

PRIVATE INSURANCE: TAKE-UP RATES

Percent of Workers Offered Insurance who are Policyholders

88.3

80.1

75

80

85

90

95

1987 1996

Source: Cooper and Schone 1997 (1987 NMES and 1996 MEPS)

PUBLIC INSURANCE: ELIGIBILITY 29.5% of All Children Are

Estimated to Be Medicaid Eligible 33.7% of children ages 0-12 are

estimated to be eligible 20.2% of children ages 13-18 are

estimated to be eligible

Source: Selden, Banthin, and Cohen 1998 (1996 MEPS)

INSURANCE COVERAGE OF CHILDREN ELIGIBLE FOR MEDICAID

Private25.9%

Medicaid51.9%

Uninsured22.2%

Source: Selden, Banthin, and Cohen 1998 (1996 MEPS)

MEDICAID TAKE-UP RATES AMONG ELIGIBLE CHILDREN

Percent of Children Without Private Coverage who Enrolled in Medicaid

70.0 73.2

59.1

0

20

40

60

80

100

All children Ages 0-12 Ages 13-18

Source: Selden, Banthin, and Cohen 1998 (1996 MEPS)

INSTITUTE OF MEDICINE

DEFINITION OF QUALITY (1990) The degree to which health services for individuals and populations * increase the likelihood of desired health outcomes and * are consistent with current professional knowledge

SUMMARY Quality Assessment Can

Help screen out bad providers

Help with improving all providers

Show effects of changes or variations BUT – DIFFICULT TO MEASURE AND

ENFORCE

The Substitution of Public Coverage for Private Coverage (the “woodwork effect”) May Lead To:

Fewer improvements in access to care and health status than expected

Greater increases in public expenditures than expected

Lower cost effectiveness of the program than expected

POLICY IMPORTANCE OF CROWD-OUT

Low-Income Children Gain Access to Affordable, Comprehensive, Health Insurance That Always Covers Preventive Care

Low-Income Families Who Have Been Paying for Insurance Coverage Get Financial Relief

Employers Who Have Historically Provided Health Insurance Coverage to Their Low Wage Employees May Have Lower Health Insurance Costs

WHO BENEFITS FROM CROWD-OUT?

Almost Nothing

WHAT CAN STATES THAT EXPAND THEIR MEDICAID PROGRAMS UNDER CHIP DO TO PREVENT CROWD-OUT?

Institute Waiting Periods Subsidize Employer-Sponsored Coverage Make Coverage and Premiums

Comparable to Employer-Sponsored Coverage

Monitor Crowd-Out and Implement Prevention Strategies If Crowd-Out Is a Problem

WHAT CAN STATES THAT CREATE SEPARATE CHIP PROGRAMS DO TO PREVENT CROWD-OUT?

CROWD-OUT PREVENTION STRATEGIES

Strategy States

3 Month Waiting Period CA, CO, ME, MT, UT

6 Month Waiting Period CT, KS, MD, MI, MO, NV,NC, OR, WI

12 Month Waiting Period NJ

Denial of Coverage if Accessto Insurance

IN, MI, MN, RI, WI

Subsidize EmployerCoverage

MA, MD, NY, NC

Premium Contributions(Above 150% FPL)

MI, RI, NC, FL, GA, NJ, NV,CA, KT, MA, NY, ME, CO,TN, WI

Note: Most states requiring waiting periods make exceptions under certain conditions.

Source: Children’s Defense Fund

May Prevent Crowd-Out May Create Inequities in the Program May Be Difficult to Administer May Reduce Participation Among the

Uninsured

ADVANTAGES AND DISADVANTAGES OF CROWD-OUT PREVENTION

Any Equitable and Administratively Workable Program Will Crowd-Out Private Coverage

Children Will Come Out Ahead With Greater Insurance Security and Coverage That Always Includes Preventive Care

There Will Be Benefits of Financial Relief to Families Who Had Previously Purchased Health Insurance

The Focus on Crowd-Out, While Important From a Budget Perspective, Draws Attention Away From Other Challenges States Face Under Both Their Medicaid and CHIP Programs

Offering Health Insurance Alone Is Not Sufficient

Programs Must Get Uninsured Children to Participate and Provide Access to High-Quality, Effective Medical Care in Order to Realize Improvements in Child Health