Demonstration projects to study the effect of allowing states to extend Medicaid to pregnant women and children not otherwise qualified

13 Pages·2001·0.64 MB·English

by  Shalala, Donna E

oo-l«l.«-T'lil,,•,,,
REPORTTOCONGRESS
DemonstrationProjectstoStudytheEffectofAllowingStatestoExtendMedicaidto
PregnantWomenandChildrenNotOtherwiseQualifiedToReceiveMedicalBenefits
DONNAE.SHALALA
SECRETARYOFHEALTHANDHUMANSERVICES
2001
DemonstrationProjectsToStudyTheEffectOfAllowingStates
ToExtendMedicaidToPregnantWomenAndChildren
NotOtherwiseQualifiedToReceiveMedicaidBenefits
BackgroundandEvaluationReport
Section6407oftheOmnibusBudgetReconciliationActof1989(P.L.101-239)requiredthe
SecretaryofHealthandHumanServicestoenterintoagreementswithseveralStatestocarryout
innovativeprogramstoextendhealthinsurancecoveragethroughMedicaidtolow-income
pregnantwomenandchildren,andtoencourageworkerstoobtainhealthinsurancefor
themselvesandtheirchildren. Coveragewouldbeofferedtopregnantwomenandchildren
underage20withincomesbelow185percentoftheFederalPovertyLevel(FPL)wholackother
formsofhealthinsurance. Section6407(g)ofthesamestatutefurtherrequiredtheSecretaryto
conductanevaluationthatwoulddeterminetheeffectsofthedemonstrationon"(A)accessto
care;(B)privatehealthinsurancecoverage;(C)costswithrespecttohealthcare;and(D)
developingfeasiblepremiumandcostsharingpolicies." AReporttoCongresswasrequestedby
January1,1994. Section13643ofP.L.103-66extendedthereportingdeadlineto"oneyear
aftertheterminationoftheprojects."
Pursuanttothismandate,theHealthCareFinancingAdministration(HCFA)solicited
demonstrationproposalsfromtheStates. Ofthosesubmitted,threewereselected:theFlorida
SchoolEnrollment-BasedHealthInsuranceProgram(SEBHI),MaineHealthProgramforKids
(MHPK)andtheMichiganCaringProgramforChildren(MCPC). BecausetheseStatesalready
offeredMedicaidcoveragetopregnantwomenwithincomesupto185percentofFPL,allthree
demonstrationsfocusedentirelyonexpandingcoverageforchildren.
InordertoprovideaReporttoCongress,inJune1991HCFAenteredintoacontractwithAbt
Associates,Inc.,toconductathorough,scientificevaluationofthethreedemonstrationprojects.
Thisreportisbasedonthefindingsoftheevaluationcontractor,aswellasinformationprovided
byHCFAstaff.
THEMEDICAIDEXTENSIONDEMONSTRATIONS
Thefollowingarebriefdescriptionsofthethreedemonstrations.
Florida: TheFloridaSEBHIprogramusedthepublicschoolinfrastructuretomarketpublicly
subsidizedmanagedcarehealthinsurancetolow-incomefamilies. Manyoftheelementsthat
contributedtothesuccessofSEBHIwerefosteredthroughgrantsupportfromtheMaternaland
ChildHealthBureauoftheHealthResourcesandServicesAdministration(theSpecialProjects
ofRegionalandNationalSignificancegrantprogram). Unliketheotherdemonstrations,which
werestatewideinscope,theSEBHIdemonstrationtookplaceinasinglecounty:VolusiaCounty
(DaytonaBeach). TheCounty'spublicschoolsystemprovidedtheadministrativenexusfor
publicizingandmarketingtheprogramtostudentsandtheirparents. Administrative
responsibilityfortheprogramwasassignedtoaprivate,non-profitorganization,theFlorida
HealthyKidsCorporation(FHKC). FHKC,inturn,contractedwithanumberofotherprivate
entitiestoperformvariousfunctionsneededtooperatethedemonstration. Chiefamongthese
wasasingle,staff-modelhealthmaintenanceorganization(HMO),FloridaHealthCarePlan
(FHCP),whichprovidedcoverageforservicesthroughitsnetworkofphysicians,hospitalsand
clinics. ChildrencouldenrollinSEBHIifthey(ortheirsiblings)participatedintheFreeand
ReducedPriceSchoolLunchProgram,iftheywerenoteligibleforMedicaidorotherhealth
insurancecoverage,andiftheirfamilieshadincomesbelow185percentofFPL. Familieswith
incomesbetween100percentand133percentofFPLpaidmonthlyout-of-pocketpremiums
equalto5percentofthetotalcostofcoverage;thosewithincomesbetween134percentand
185percentofFPLpaid18percentofcostoutofpocket. Failuretopaythepremiumwas
groundsfordisqualificationfromtheprogram. Thebenefitpackagewassimilartothatprovided
byMedicaid,butwithsomeservicelimitationsandco-paymentsforselectedservices. Bythe
endofthedemonstration,approximately7,000childrenparticipatedintheprogram(anestimated
one-halfoftheinitialnumberofuninsuredchildreninVolusiaCounty). Theprogramoperated
asademonstrationfromMarch1992toFebruary1995,afterwhichitcontinued,usingStateand
privatefunds. In1998,amodifiedversionofSEBHIbecamethebasisforFlorida'sSCHIP.
Maine: MHPKwasbasedonanexistingStateprogramadministeredbytheMaineDepartment
ofHumanServices. Underthisprogram,healthcarecoveragewasextendedtochildrenin
familieswithincomeupto125percentofFPLwhowerenoteligibleforMedicaid. Participating
childrenwhosefamilyincomerosetobetween126percentand185percentofFPLwereeligible
toretaincoverageona'transitionalbasis'forupto2years. Childreninfamilieswithincomes
morethan100percentofFPLweresubjecttoamonthlyout-of-pocketpremiumbasedona
percentageoffamilyincome(1.5percentfor100percentto125percentofFPL,2-3percentfor
126percentto185percentofFPL). AdministrativeresponsibilityforMHPKwasassumedby
theMaineMedicaidprogram. ThisallowedforasingleintakesystemforbothMedicaidand
MHPK,andforeasytransitionsbetweenthetwoprograms. Participatingchildrenreceivedtheir
carefromregularMedicaidproviders,whowerereimbursedonafee-for-servicebasisusingthe
Medicaidfeeschedule. MHPKwasauthorizedtopurchaseemployer-basedhealthinsurancefor
childrenwhensuchinsurancewasavailableandcouldbeshowntobecosteffectivecomparedto
regularMHPKcoverage. Iftheemployer'sinsurancedidnotcoverthecompleteMedicaid
benefitpackage,theadditionalserviceswerefundeddirectlybyMedicaidonafee-for-service
basis. ThedemonstrationbeganinNovember1991andendedinMay1993,whenmost
participatingchildrenbecameeligibleforMedicaidthroughaStateeligibilityexpansion.
Enrollmentduringthedemonstrationperiodaveraged4,900childrenpermonth,or
approximately7-9percentoftheuninsuredchildreninMaineatthetime.
Michigan: MCPCwasdevelopedasapartnershipbetweenBlueCross/BlueShieldofMichigan
(BCBSM),theMichiganHealthCareEducationandResearchFoundation(aBCBSM
subsidiary)andtheStateMedicaidprogram. Childreninfamilieswithincomesupto185
percentofFPL(butnoteligibleforMedicaid)couldparticipateinMCPC. Coveragewas
providedusingBCBSM'sexistingprovidernetworkandfeeschedule. Coveragewasfreeto
participatingfamilies,butenrollmentwasrestrictedbasedonavailablefunding. Thebenefit
packagewaslimitedtoselectedprimaryandpreventivecareservicesprovidedonanoutpatient
basis;inpatienthospitalcarewasnotcovered. MCPCoperatedasademonstrationfrom
S1e99p1teMmbCePrC19b9e2gatnhreonurgohllAmuegnutsutsi1n99g5l.ocaPlr,ioprritvoaittesfaupnpdrsovoanllya.saBydeAmoungsutsrtat1i9o9n2,,itnotNaolveenrmoblelrment
ofchildrenhadclimbedto1,117. Federalmatchingfundingforthedemonstrationwasapproved
inSeptember1992,andthecombinationofFederalandlocal,privatefundsallowedenrollment
inMCPCtoincreaseto2,142bySeptember1993. Stateappropriatedfundswereaddedin
October1993,andbyAugust1994enrollmenthadincreasedto5,606. InDecember1994,
MichiganexpandedMedicaideligibilitytocoverchildrenuptoage15withfamilyincomesup
to150percentofFPL,causingmanyMCPCparticipantstobecomeeligibleforMedicaid,and.
enrollmentdroppedtojustover3,000. Thechildrenenrolledintheprogramrepresent
ainppSreopxtiemmabteerly1919p5e,rcMeCntPoCftchoentuinniunesduruesdincghiSltdarteenainndMliocchailgfaunn.ds.AftIenr1t9h9e8,deMmoCnPstCrawtaisonended
supersededbyMIChild,Michigan'sSCHIP.
RESEARCHMETHODOLOGY
Theanalysisdonebythecontractorconsistedofthreemajorcomponents:casestudies,analysis
ofadministrativedata,andsurveys.
Casestudieswereconductedatallthreedemonstrationsites. Theseanalysesprovided
backgroundinformationaboutthedemonstrations,includingthepoliticalandpolicy
environmentsfromwhichtheyemergedandthegoalsofthedemonstrationsintheeyesofthose
whoplannedthem. Theyalsodocumentedandassessedtheprocessesandproceduresusedby
theStatestoimplementandoperatethedemonstrations,andpresentedtheviewsofkey
constituencies. Thecasestudymethodologyreliedonacombinationofsitevisitsandongoing
off-sitemonitoring. OnesitevisitwasconductedtoMaine(January23-24,1992),twotoFlorida
(April21-24,1992;August15-17,1994)andthreetoMichigan(June22-23,1992;April26-27,
1993;July27-29,1994).
Severaltypesofadministrativedatawereobtainedfortheevaluation. Eligibilityandenrollment
datawereobtainedfromeachofthedemonstrationsites. Thesedata,withtheiraccompanying
economicanddemographicinformation,providedthebasisofanalysesofenrollmentand
disenrollment,andallowedseparateanalysesofdemonstrationparticipantsbysexandincome.
Dataonthetypesandquantitiesofmedicalservicesandthecostofservicesusedby
demonstrationparticipantswerealsoobtained. Administrativedatawereacquiredfromthe
States'MedicaidManagementInformationSystemsandfromtheparticipatingprivatehealth
insurers(FHCPinFloridaandBCBSMinMichigan).
Threekindsofsurveydatawereusedbythecontractor. A'baseline'surveyattemptedtogather
informationfromdemonstrationenrolleesontheirhealthstatusatenrollment,anduseofservices
immediatelypriortoenrollment. ThesurveyswereadministeredbyallthreeStates,which
distributedpapersurveystoallnewlyenrolledchildrenduringaspecifiedtimeframe.
Asecond,moreextensivesurveywasadministeredtosamplesofdemonstrationparticipantsand
non-participantsbyphone. Thissurveywasadministeredtwicetothesamesetofsampled
individuals. ThefirstroundofsurveyswasconductedbetweenJuly1993andMarch1994,and
thesecondroundtookplacebetweenNovemberandDecember1994. Threedistinctsurvey
sampleswereselected:(1)asampleofdemonstrationparticipants,(2)an'internal'comparison
groupconsistingofchildrenwholivedintheareacoveredbythedemonstrationbutdidnot
participate,and(3)an'external'comparisongroupconsistingofcomparablechildrenliving
outsidethedemonstrationarea. ForFloridatheexternalcomparisongroupwasdrawnfrom
PascoCounty,Florida. ForMainetheinternalcomparisongroupwasselectedfromthe
communitiesofAuburnandLewiston,Maine,andtheexternalcomparisongroupfrom
BurlingtonandWindsor,Vermont. Finally,forMichigantheinternalcomparisongroupwas
drawnfromFlint,GrandRapids,Hancock,IronMountainandSaginaw,Michigan,andthe
externalcomparisongroupwasfromClevelandandToledo,Ohio. Atotalof4,420families
wereinterviewedinthefirstwaveofthesurvey,and3,504werereinterviewedduringthesecond
wave.
Finally,toprovideanationalbenchmarkfordemonstrationparticipants,subsampleswere
analyzedfromthe1987NationalMedicalExpenditureSurveyand1991NationalHealth
InterviewSurvey(NHIS),withselecteddatafromtheNHIS1989and1990supplements.
DEMOGRAPHICPROFILEOFDEMONSTRATIONPARTICIPANTS
Eachofthethreedemonstrationsattractedaslightlydifferentmixofchildrenintermsofageand
familyincomes. Mostdifferencescanbetracedtodifferencesinthedesignsofthethree
demonstrations,differencesinMedicaidprogramswithwhichtheyco-existed,andotherState-
specificfactors.
Age:Theagedistributionofenrolleeswassimilaracrossallthreeprograms. Ineachcase,
elementaryschoolagechildren(age5-12)madeupthelargestgroupofenrollees. Floridahad
thehighestpercentageofenrolleesinthisagerange(67percent),followedbyMichigan
(59percent)andMaine(56percent). Bycontrast,Floridahadthelowestpercentageof
enrollmentamong13-17yearolds(27percent),followedbyMichigan(29percent)andMaine
(35percent). NinepercentofenrolleesinMichiganwereageonethroughfour,asopposedto
4percentinFloridaandMaine. Florida'suniquedistributionofenrolleesbyageisdueinpartto
itsrelianceontheSchoolLunchProgramasabasisforeligibility. Childrenunderschoolage
withoutschoolagesiblingswerebydefinitionexcluded. Also,thefactthatschoollunch
participationislowerforteenagersthanforyoungerchildrenmadeitlesslikelythattheywould
participateinSEBHI.
Income:Thedistributionofincomelevelsdifferedsignificantlyamongthethreeprojects. The
Michigandemonstrationservedhigherincomechildren,onaverage,andMainethelowest,with
Floridainbetween. InMichigan,thelargestgroupofenrollees(43percent)hadfamilyincomes
between131percentand185percentofFPL,comparedto9percentinFloridaand2percentin
Maine. InFlorida,thelargestgroup(53percent)hadfamilyincomesbetween101percentand
130percentofFPL,comparedto4percentinMaineand26percentinMichigan. Finally,in
Maine,thevastmajorityofenrollees(94percent)hadfamilyincomesbelowFPL;the
correspondingfiguresforMichiganandFloridawere29percentand35percent,respectively.
Sex:Slightlymorethanhalfofparticipantsatallthreesitesweremale.
PRINCIPALFINDINGS
ThefollowingweretheprincipalfindingsfromthethreeMedicaidExtensionDemonstrationsas
theyrelatetothequestionsaskedbyCongress.
AccesstoCare
Theanalysisofaccesstocarewasbasedprincipallyonthetelephonesurveyresponses. Six
measuresofaccesswereconsidered:(1)whethertheparentsreportedthatthechildhadaregular
sourceofcare;whethersheorhehad(2)aphysicianvisit,(3)apreventivecheck-up,or(4)an
emergencyroom(ER)visitwithinthelast3months;(5)whetherthechildhadexperiencedany
unmetneedduringthelast12months;and(6)whetherthechildhadmissedschoolorlimitedhis
orheractivitiesandhadnotseenadoctorornurseduetoaspecificaccessbarrier. Achildwho
hasaphysicianorclinicfromwhomheorshecanreceivecareonaregularbasisismorelikely
tohavegoodaccesstocare. Havingaregularphysicianalsopromotescontinuityofcare.
Physicianvisitsandpreventivecheck-upsareindicatorsofactualaccesstothehealthcare
system,andtheirabsencesuggeststhepresenceofaccessbarriers. AhighfrequencyofERuse,
ontheotherhand,suggeststhatchildrenmayfacedifficultiesobtainingcarefromphysicians'
officesorclinics,andareresortingtoemergencyroomstomeettheirneeds. Thelasttwo
measuresattempttocapturemoredirectlywhetherchildrenareexperiencingbarrierstoaccess.
ChildrenenrolledintheFloridaSEBHIdemonstrationweremorelikelythanprivatelyinsured,
Medicaidanduninsuredchildrentohavearegularsourceofcare. Thismaybedueinparttothe
factthatallthechildrenintheFloridademonstrationwereenrolledinanHMO,andthuswere
assignedtoaprimarycareprovider. Demonstrationchildrenwerealsomorelikelythan
Medicaidchildrentohavehadaphysicianvisit. Ontheotherhand,demonstrationchildrenhad
lowerratesofpreventivecheck-upsthanprivatelyinsuredchildren;inthisrespecttheywere
comparabletoMedicaidanduninsuredchildren. Interestingly,bothprivatelyinsuredand
uninsuredchildrenweremorelikelytousetheemergencyroomthandemonstrationchildren.
Finally,demonstrationchildrenreportedsimilarratesofunmetneedasotherinsuredchildren,
andwerelesslikelythanuninsuredchildrentoreportunmetneed. Overall,itappearsthatthe
Floridademonstrationsucceededinimprovingbothpotentialandrealizedaccesstocare,andin
reducingbothlevelsofunmetneedandbarrierstocarewhenchildrenaresick.
InMaine,fewdifferencesinaccesstocarewerereportedbetweenchildrenwhowereenrolledin
MHPK.andchildrenwithothertypesofcoverage,ornocoverage. Thereweretwosignificant
exceptions. Bothdemonstrationchildrenanduninsuredchildrenweremorelikelythanother
insuredchildrentohavefacedunmetneed. Bycontrast,demonstrationchildrenwereaslikelyas
otherinsuredchildren(andlesslikelythanuninsuredchildren)tohavefacedidentifiableaccess
barriers. Ingeneral,however,accesstocareprovedtobesimilaramongallgroupsofchildren
studied. Thisresultshouldbeinterpretedwithcaution,however,becausetheMHPK
demonstrationwasendedbeforethesecondroundofthesurveycouldbefielded. This
underminedtheabilityofthesurveysampletodetectdifferencesamongthevariousgroupsof
children.
ChildrenenrolledinMichigan'sMCPCwerelesslikelythanchildrenwithothertypesof
insurancecoveragetoreportaregularsourceofhealthcare. Theywerealsomorelikelythan
otherinsuredchildrentoreportunmetneedorbarrierstocare. (Demonstrationchildrenwere
similartouninsuredchildreninbothrespects.) Intermsofserviceuse,fewsignificant
differenceswerefoundamongchildrenwithvarioustypesofinsuranceandnoinsurance,except
thatuninsuredchildrenwereslightlylesslikelytohavehadanERvisitthanthosewith
insurance. Thus,theMCPCdemonstrationseemedtohavehadlittleimpactonaccesstocarefor
participatingchildren,whichissurprisinggiventhatthedemonstrationgavechildrenaccessto
BCBSM'sprovidernetworkatthesamelevelsofreimbursement.
Insummary,theFloridaSEBHIprogramseemedtohavethegreatestpositiveimpactonaccess
tocareforformerlyuninsuredchildren. TheimpactoftheMaineandMichiganprogramswas
muchlessdramatic. Someofthisdifferencecouldbeattributedtothepoliciesofthemanaged
caresystemretainedbyFHKCtoprovidecaretoSEBHIenrollees. BothFHCPandtheVolusia
Countyschoolsconductedactiveeducationcampaignstopersuadememberfamiliestobring
theirchildreninforprimaryandpreventiveservices,andtoavoidusingtheERasasourceof
primarycare. FHCPencouragedallnewenrolleestocomeinforaninitialvisitshortlyafter
theirenrollment,whichhelpedtoestablishrelationshipsbetweenenrolleefamiliesandtheir
primarycareproviders. FHCPalsohaddoctorson-call24hoursadaytoanswerquestionsand
giveadvice.
PrivateHealthInsuranceCoverage
Onlyoneofthedemonstrationsfeaturedsignificantinteractionwiththeprivate,employer-based
healthinsurancesystem. MHPKfeaturedaprovisionunderwhichtheprogramcould'buyinto'
employer-sponsoredcoverageundercertaincircumstances. Ifacomparisonoftheemployee
shareofcosttoexpectedMedicaidcostsrevealedthatpurchaseofanemployer'shealth
insurancewascosteffectiverelativetostraightMedicaidcoverage,MHPKcouldenrollthe
eligiblefamilyintheemployer'shealthinsuranceplanandpaytheemployee'sshareofthe
premium. Totheextentthattheemployer'spolicydidnotcoverallservicesprovidedunder
Medicaid,theuncoveredserviceswouldbereimburseddirectlybyMHPKonafee-for-service
basis. Inpractice,however,fewenrolleesqualifiedforanemployer-basedhealthinsurance
subsidyunderthisprovision. AsofDecember1992,MHPKpaidthepremiumforonly
204enrollees,orabout3percentofthetotalenrolleepopulationatthattime. Onereasonforthis
wasthatMedicaidcoveragewasalreadyinexpensiverelativetoothertypesofinsurance,soit
wasdifficultforaprivate,employer-basedhealthinsuranceplantocompeteonthatbasis.
CostsWithRespecttoHealthCare
ThefollowingtableisasummaryoftotalFederalexpendituresforthethreedemonstrations. A
totalof$30millionwasappropriatedforallthreedemonstrationscombined.
Services Administration Evaluation Total
Florida $6,088,591 $1,107,101 $329,529 S7.525.221
Maine $4,481,586 $1,027,144 $294,153 $5,802,883
Michigan $2,265,636 $145,400 $115,000 $2,526,036
TOTAL $12,835,813 $2,279,645 $738,682 $15,854,140
,
Intermsofper-enrolleecosts,theexperienceoftheFloridademonstrationwasbothinteresting
andinstructive. Atthebeginningoftheprogram,FHKCcommissionedanactuarialestimateof
expectedperenrollee-permonthcostsforcoveringtheSEBHItargetpopulation. Using
Medicaidfee-for-servicedataasabasis,anindependentactuarialfirmestimatedaperenrollee-
permonthcostof$62.39. InitsresponsetotheSEBHIRequestforProposal,FHCPsubmitteda
bidpriceof$58.98perenrollee-permonth,indicatingthatitsexpectationsofper-enrolleecosts
werelargelyinlinewiththoseofFHKC'sactuarialconsultants. However,asthedemonstration
proceeded,itbecameclearthattheinitialcostprojectionswereundulypessimistic. Theactual
costofcoverageturnedouttobemuchmoremanageablethaninitiallyexpected. Afteraninitial
spurtofutilizationduetopent-updemand,theutilizationpatternsofdemonstrationenrollees
cametoresemblemorecloselyFHCP'scommercialenrolleesthantheMedicaidpopulationon
whichtheinitialestimateswerebased. Onthatbasis,FHKCwasabletonegotiateprogressively
lowerrateswithFHCP:$56.70fortheNovember1992-January1993period,$46.70forthe
February1993-February1994period,andfinally$46.50startinginMarch1994. Thisrepresents
agreater-than-20-percentdeclineinper-enrolleecosts,asopposedtothe25-percentincrease
initiallyprojectedbydemonstrationplanners. Overall,thecombinedFederal,Stateandenrollee
costofcoverageoverthecourseofthedemonstration(includingadministrativecosts,but
excludingdevelopmentcosts)was$56.07perenrollee-permonth.
UnderMichigan'sdemonstration,allresponsibilityforreimbursingproviderswasassumedby
BCBSM. BCBSM,inturn,receivedamonthlypremiumpaymentperenrolleefromthe
MichiganDepartmentofSocialServices,theState'sMedicaidagency. Initially,themonthly
costofMCPCcoveragewas$29.50permember-permonth,basedonBCBSM'sexperiencewith
oneofitscommercialgroups. (Thelowcostofcoveragereflectsthelackofhospitalcoveragein
theMCPCbenefitpackage.) Theseprojectionsprovedoptimistic,however;theMCPC
populationexhibitedhigherutilizationthanexpected,particularlyofphysicianservices.
BetweenApril1993andMarch1993,actualutilizationbyMCPCclientsaveraged$31.73per
member-permonth;hence,BCBSMconsistentlylostmoneyonMCPC. Inresponse,the
M1i99c4h,igaanndBBuCreBaSuMofraIinsseudraitnscmeomnatnhdlaytepdreamniiunmcrteoa$s3e5i.npArneminituemrnaflorsMtuCdyPbCyeBffCecBtSivMeJfuoluynd1
evidenceofbothpent-updemandandadverseselection,whichmayaccountforcostsbeing
higherthananticipated. BCBSMfoundthatthemostintensiveusebychildrenofoutpatient
surgicalserviceswasduringtheperiodimmediatelyfollowingtheirenrollment,suggestingpent-
updemandfortheseservices. Childrenwithlongercontinuousperiodsofenrollmentalsotended
tobesickeronaveragethanthosewhoexperiencedintermittentenrollment.
MHPKwasapurelyMedicaidfee-for-servicebenefit. Estimatesoftheperenrollee-permonth
costofcoveragebasedonadministrativerecordsrangefrom$67to$82. Theseamountsare
somewhathigherthanfortheotherdemonstrations,andcouldreflecttheimpactofadverse
selectionandpent-updemandforservicesonthepartofnewMHPKenrollees. Apossible
relationshipbetweenadverseselectionintoMHPKandtheprogram'sreapplicationandcost-
sharingrequirementsisexploredmorefullyinthenextsection. (Forpurposeofcomparison,the
totalper-monthcostofanon-disabledchildeligibleforMedicaidwasapproximately$100in
Federalfiscalyears1993and1994.)
DevelopingFeasiblePremiumandCostSharingPolicies
TheenablinglegislationfortheMedicaidExtensionDemonstrationsrequiredthatparticipating
familiesshareinthemonthlycostofcoveragefortheirchildren. Familieswithincomesabove
100percentofFPLweretobechargedpremiumsbasedonaslidingincomescale,nottoexceed
3percentofgrossmonthlyearnings. Familieswithincomesbelowthepovertylevelweretobe
exemptfrompremiums.
Inpractice,twoofthethreedemonstrationsrequiredpremiumcostsharingonthepartof
enrolledfamilies. UndertheFloridaSEBHIprogram,familieswithincomesbetween101
percentand133percentofFPLpaidmonthlyout-of-pocketpremiumsequalto5percentofthe
totalcostofcoverage,whilethosewithincomesbetween134percentand185percentofFPL
paid18percent. Therealsowerecopaymentsof$3foreachprescriptionandrefraction,$10per
outpatientmentalhealthvisit,$10foreyeglasslenses,$25peremergencyroomvisitand$3per
rehabilitationandhomehealthvisit. Overthecourseofthedemonstration,however,someof
thesecopaymentswerereducedoreliminated. FamiliesenrolledintheMHPKdemonstration
paidmonthlypremiumsperchildrangingfrom1.5percentoffamilyincomeforfamilieswith
incomesbetween100percentand125percentofFPL,to2-3percentforfamilieswithincomes
inthe126percentto185percentofFPLrange. Therewasnopoint-of-servicecostsharing
underMHPK. Finally,whilepremiumcostsharingwasinitiallypartoftheplanforMCPC,
priortoimplementationMichiganelectednottochargepremiumstoMCPCparticipants.
Officialstherewereconcernedaboutthepossibleadministrativeburdenandalsowantedto
maximizeparticipationintheprogram. Amountsthatwouldhavebeenpaidbyfamiliesunder
thedemonstration'sproposedpremiumschedulewereinsteaddefrayedusingMCPCfunds;
Federalmatchingamountswerereducedaccordingtotheamountofthesubsidy.
Chargingpremiumstoparticipantsinpublicly-sponsoredhealthinsuranceprogramslikethe
MedicaidExtensionDemonstrationsoffersparticipatingfamiliesanopportunitytoshareinthe
responsibilitiesoffinancingaprogramfromwhichtheybenefit. Suchanapproachaccordswith
thewidelyheldbeliefthatpeopleshouldpayforthebenefitstheyreceive,iftheyareable.
Premiumcostsharingcanalsohavenegativeconsequences,however. Familiesinneedmaybe
deterredfromparticipatingintheprogram. Evenasmallpremiumcanbeproblematicfor
familieswithnear-povertyincomes,likethoseforwhomtheMedicaidExtensionDemonstration
programswereintended. Anotherpotentialproblemistheincentivethatpremiumsprovidefor
familiestoenrollepisodically. Familiescanenrolltheirchildrenintimesofneed,andthenallow
theircoveragetolapsewhentheneedhaspassed;theyarearguablymorelikelytodosowhena
monthlycashpaymentisinvolved. Theresultingturnoverinenrollmenthasconsequencesfor
programoperations. Enrolledchildrentendtobesickeronaveragethanthetargetpopulationin
general,whichincreasestheaveragecostofcoverage. Cyclingonandoffcoveragealso
underminescontinuityofcareandappropriateuseofprimaryandpreventivecare.
Theevaluationcontractorlookedextensivelyatspellsofeligibilityandturnoveramong
demonstrationenrollees. Itsfindingssuggestthatpremiumcostsharingisonlyonefactor
affectingtheamountof'churning'inanenrolledpopulation. Ofthethreeprograms,Florida's
experiencedthelowestattritionrate. Approximately1percentto3percentofchildren
disenrolledinanygivenmonth,withspikesto6-8percentduringtheopenenrollmentperiodsat
thebeginningofeachschoolsemester. Mostdisenrollments(87percent)wereduetothechild"
losingeligibility,obtainingotherinsuranceormovingoutofVolusiaCounty. Thus,thevast
majorityofprogramexitswereduetoreasonsunrelatedtopremiums. However,therewassome
evidencethatpremiumsdidcontributetoprogramrum-over. Sevenpercentofdisenrollments
werepremium-related,aboutevenlydividedbetweeninvoluntarydisenrollmentsfornon-
paymentofpremiumsandvoluntarydisenrollmentsduetodissatisfactionwiththeamountof
premium.
CertainadministrativefeaturesofSEBHIservedtoreducetheamountofprogramturnover. One
ofthesewastheabsenceofanyformalre-enrollmentprocess. FHKCassessedeligibilityfor
eachparticipantonamonthlybasisbycomputermatchofSEBHIeligibilityrecordswiththose
oftheschoollunchandMedicaidprograms. Thisprocessrequirednoactiveinputonthepartof
participatingfamilies,andservedtofacilitatecontinuousenrollmentandminimizedrop-outs.
Anotherimportantfactorwasthat,unliketheotherthreedemonstrations,Floridaallowed
childrenwhowerefoundtobequalifiedforMedicaidtoremaininSEBHI.
Bycontrast,bothMaineandMichiganexperiencedhigherratesofattritionfromtheirprograms,
andmorediscontinuousenrollment,butindifferentways. Byfar,theMaineHealthProgramfor
Kidsexperiencedthehighestratesofattritionandturnover. Inanygivenmonth,10-14percent
ofparticipatingchildrenwithdrewfromtheprogram. Sixtypercentofenrollmentspellswere
lessthan1yearinduration,and83percentlastedlessthan2years. (Thecorrespondingfigures
forFloridawere28percentand37percentrespectively.) Failuretoreapplywasthemost
commonreasonforanenrollmentspelltoend(42percent),followedbybecomingMedicaid
ecloingsiibslteen(t19wiptehrcoebnste)rvaantdiolnossibnygeplriogigbrilaimtystdaufeftthoatinscoommeeeonrroalslseetesf(a1mi4lpieerscsenete)m.tTohsieseekvMidHenPcKeis
coveragetomeetimmediatehealthcareneeds,anddropcoverageoncetheneedhaspassed.
(Thiswouldalsohelptoexplainthehighper-capitacostsexperiencedbyMCPC.) Such
behaviorwasencouragedbyMHPK'spolicyofpayingmedicalbillsincurredupto30daysprior
toachild'senrollment. Itisuncleartowhatextentthepremiumrequirementcontributedto
increasedturnoverintheenrolledpopulation. OnestrengthofMaine'smodelwasrevealedby
theexperienceofchildrenwhowithdrewfromtheprogramonlytoreenterlater:59percentof
gapsinenrollmentwerefilledwithspellsofMedicaideligibility. Havingasingleadministrative
mechanismforMedicaidandMHPKeasedtransitionbetweenthetwoprogramsandhelpedto
ensurecontinuityofcoverageforthosechildren. Itisnotknownwhethertheother41percentof
enrollmentgapsrepresentspellsofcoveragebyotherinsuranceoruninsurance.