CHAPTER III: CHIP IN COLORADO
History and Implementation
The state legislature has authorized health insurance programs for
low-income Colorado children for more than a decade. However, the legislature
has not appropriated much general fund money to support the programs. The
reluctance to appropriate state funds reflects two political realities
in Colorado. First, there is a statutory limit on annual revenue and spending
increases. Second, there is skepticism among legislators and segments of
the public toward government-run programs. Both realities have led to legislative
mandates to privatize child health insurance programs as much as possible.
The legislature reinforced privatization for the state’s CHIP program.
The Colorado Indigent Care Program (CICP) began in 1983 to serve poor,
non-Medicaid residents of all ages. This is not an insurance program, but
a system for reimbursing participating physicians and other fee-for-service
providers a portion of their costs for serving indigent uninsured individuals.
Legislation passed in 1990 that established the first insurance program
for low-income, non-Medicaid children, the Colorado Child Health Plan (CCHP).
CCHP provided outpatient and preventive services to children age nine and
under in families with incomes below 185 percent of poverty. Services were
focused in rural areas where there were few or no community health centers.
The law stipulated that CHP be financed with "gifts, grants, and donations."
The legislature, reflecting its skepticism about government-run, public
assistance programs, authorized CHP in the higher education budget, to
be administered by the University of Colorado Health Sciences Center. Claims
processing, referral authorization, and card production were donated by
HMO Colorado, a subsidiary of Blue Cross/Blue Shield of Colorado.
The legislature, in 1993, authorized but did not appropriate funds for
expansion of CCHP to cover children through age 13.
During the 1996 legislative session, a bi-partisan group of legislators
requested that the Joint Budget Committee appropriate funds for CCHP. The
committee balked, then relented, and appropriated $1 million in what is
described as a "one-time-only-and-don’t-come-back" appropriation for CCHP.
This occurred during a period when Colorado was $100 million overspent
in its Medicaid program and costs were escalating 20 percent annually.
That year, the legislature voted to drop out of the Medicaid program, but
Governor Romer vetoed the legislation.
In the 1997 session, legislators considered:
Eliminating the indigent care program (CICP);
Requesting a waiver of some Medicaid rules from HCFA(now known as CMS);
Using some Medicaid funds to reimburse schools for health services;
Expanding CCHP statewide and raising the age limit from 13 to 17;
Submitting a Section 1115 waiver to HCFA(now known as CMS) to obtain a higher match and create
the Children’s Basic Health Plan (CBHP) with comprehensive coverage that
include inpatient and mental health coverage.
At the same time, a bill was introduced to control rising Medicaid costs
by enrolling many Medicaid recipients in HMOs. The bill projected Medicaid
savings that would help fund the CBHP.
This chronology occurred in an environment of statutory limits on annual
revenue and spending growth. The statutes index revenue and spending growth
to population plus inflation, which has amounted to a limit of roughly
6 percent, annually, over the past several years. One statute requires
excess revenues above 6 percent to be returned to the taxpayers in a rebate,
unless they vote in a referendum to spend some of it. The limit cannot
apply to growth in federal entitlement programs like Medicaid. When Medicaid
is experiencing runaway growth, as it was during the early 1990s, legislators
must appropriate state matching funds to it. This restricts their ability
to fund discretionary programs.
Simultaneously, Congress passed Title XXI so the legislature dropped the
waiver idea in favor of submitting a State Plan for a CHIP program.
Colorado was one of the earliest states to receive federal approval
of their Title XXI State Plan and the first to receive approval for a non-Medicaid
program. The plan builds upon the existing Colorado Child Health Plan.
The new program, Child Health Plan Plus (CHP+) offers a more comprehensive
set of health care benefits to children that includes inpatient hospital
services, extends eligibility to older children up to age 19, and expands
to residents in all 63 counties.
When Title XXI passed in August 1997, with funding to become available
in October, Colorado still had another year before its CCHP expansions
were to take effect. So the legislature passed a fast track bill to correct
the following discontinuities between CCHP and Title XXI:
Phase I of CHIP/CHP+ began in April 1998 and included the following features:
Make inpatient coverage effective in July 1998.
Clarify that children through age 18 would be eligible.
Extend the sunset date of CCHP from July 1998 to July 1999.
Establish cost-sharing provisions for CHIP/CHP+.
Offer an option to children already enrolled in CCHP to remain there (without
inpatient, mental health, and other services) until their certification
period expires, or to enroll in CHP+ with cost-sharing. New applicants
are enrolled in CHP+.
It continued the income eligibility cutoff of the predecessor CCHP program,
covering children up to age 19 living in families with incomes up to185
It established an asset test which limits the dollar value of non-income
resources available to applicants, such as a car, to $45001.
Since the asset test in Medicaid is $1500, staff recognize that many children
in families with incomes considerably below 100 percent FPL who are found
ineligible for Medicaid (on asset grounds) will be eligible for CHP+.
Officials set a target to enroll no more than 25,000 children by June,
Day-to-day program administration — such as outreach, application processing,
and enrollment — would be conducted by a private foundation, under contract
to the state Department of Health Care Policy and Financing, the oversight
Other agencies and organizations actively participate in outreach.
In Phase II the state plans to pilot an employer buy-in program.
The majority of CHP+ enrollees receive services through HMOs. Since the
provider networks offered by the plans in many counties were found inadequate
to serve enrollees’ needs, HMOs currently serve 29 of the 63 counties.
However, this represents about sixty percent of the enrollees and about
80 percent of children eligible for CHP+ throughout the state.
Colorado’s Title XXI allocation of Federal funds in the first year was
up to $42 million.
The state matching rate is 34 percent.
State matching funds of $7.2 million consist of a legislative appropriation
from the general fund; an intergovernmental transfer from University Hospital
(stipulated in state legislation); donations from the Blue Cross/Blue Shield
Foundation and other businesses; an allocation of a portion of the state’s
disproportionate share fees that would have gone to hospitals; and a legislative,
While counties in Colorado are required to fund part of the state match
in other public assistance programs, like welfare, they are not required
to do so for CHIP.
Key Factors for Colorado’s Implementation
The state estimates there are 180,000 uninsured children, of whom approximately
75,000 live in families with incomes less than 185 percent FPL.
HCPF estimates there were 25,000 low-income children eligible for Medicaid
who were not enrolled.
In November, HCPF estimated they had enrolled 12,000 in CHP+ toward their
target of 25,000 by June 1999. Staff estimated there were another 3,000
applications in the pipeline, awaiting eligibility determination.
Following enactment of CHP+ there were 14,000 children enrolled in the
predecessor CCHP, all of whom were eligible to roll over into CHP+. The
families of these children received letters informing them of the new program
and encouraging them to switch over. At the time of the first mailing,
40 percent of the families had responded; 79 percent of them — representing
all premium levels — agreed to move into the new program when it became
Children in families that did not respond to the mailing, or did not agree
to switch, were permitted to maintain their eligibility in the old program
for one year beyond their enrollment date. As of March 1998, all new applicants
to the program were required to enroll in CHP+ and all enrollment periods
for existing CHP cases will terminate in March 1999.
Many circumstances facilitated the authorization and implementation
of CHIP in Colorado. Statutory limits on revenue increases, which constrain
the growth of programs, served to temper enrollments during early CHIP
Precedence was helpful. A nine-year history of expanding eligibility in
state-initiated health insurance programs for low-income children created
a conducive atmosphere for consideration of CHIP.
Timing was critical. On the eve of Title XXI passage, the state legislature
authorized submission of an 1115 waiver to HCFA(now known as CMS), so it was an easy step
to modify the waiver provisions to comply with Title XXI requirements.
The waiver request already included expansion of the earlier state program
to include inpatient and mental health services, which was a big step toward
complying with Title XXI requirements.
Existing public-private partnerships facilitated implementation. State
initiated children’s health insurance programs already relied heavily on
public-private partnerships. The presence of Foundation staff who had managed
outreach and enrollment for the state program made it easy to continue
the Foundation’s management of CHIP/CHP+.
One man’s tireless efforts on behalf of uninsured Colorado children facilitated
legislative debate, as well as implementation. A pediatrician at the University
of Colorado Health Sciences Center began advocating for the various health
insurance programs in 1992, and testified on CHIP/CHP+, as well. He understood
how the pieces would fit together. Under his direction, the University
already had 3300 contracts in place with fee-for-service providers. This
enabled CHP+ to get underway immediately while enrollees were selecting
managed care plans.
A Policy Board, design teams, and work groups helped ensure buy-in by a
wide array of private, as well as, public stakeholders.
Faced with statutory constraints on funding for CHIP/CHP+ and the capped
enrollment target in the first year, attitudes toward outreach were initially
mixed. Although there was interest in reaching out to the maximum number
of children, there was concern about "being too successful" and creating
waiting lists. As one person explained the trepidation: "Can we serve them
if they come?" As it has recently become clear that total enrollment would
not exceed 25,000 during the first fiscal year, state officials expressed
renewed interest in more vigorous marketing and outreach.
Key Players and Administration
A Policy Board recommended overall CHP+ policy. Two state agencies
and a private foundation played a direct role in early CHP+ administration,
and there is collaboration with a third state agency and another private
The Policy Board recommended policies on: coordinating CHP+ eligibility
with Medicaid; designing the benefits package and cost sharing schedules;
managing HMO, University, and systems information contracts; reporting
and program evaluation; and quality assurance. Members included the CEOs
of Kaiser-Permanente, Blue Cross/Blue Shield, past president of Colorado’s
chapter of the American Academy of Pediatrics, the state manager of the
nation’s largest private retirement fund, a representative from a benefits
consulting firm, the pediatrician from University Hospital who has been
instrumental in passage of various children’s health insurance initiatives,
Executive Director of Valley-Wide Health Services, and the Executive Directors
of four state agencies (Health Care Policy and Financing; Department of
Public Health and Environment; Education; and Human Services).
The Department of Health Care Policy and Financing (HCPF) is the oversight
agency for CHP+. Legislative staff and some executive branch staff observed
that the Legislature envisioned little more than "the banking function"
for HCPF. In fact, they administer contracts with the foundation, managed
care organizations, the information systems vendor, and also manage the
quality assurance reporting.
Foundation for Children and Families — under contract to HCPF — conducted
marketing and outreach, handled customer service, processed applications
and determined eligibility, and finalized enrollment of eligible children
in CHP+. (The Foundation was recently replaced by a private, non-profit
contractor). With a staff of 20, Foundation staff performed those functions
and the "rating" function that determines income and assigns children’s
families to the appropriate premium group. Foundation staff also developed
and managed the information system and analyzed data to evaluate their
outreach strategies. They administered the provider network in non-HMO
Department of Public Health and Environment, maternal and child health
staff help market CHP+, as part of their public health nurses’ marketing
and outreach activities for other child health initiatives.
Colorado Division of Insurance staff, in collaboration with HCPF staff,
are analyzing the complexities of employer buy-in, and will develop plans
for a pilot test for Phase II. During the design phase, Division staff
advised the Policy Board about benefits and cost-sharing provisions of
Community Health Network staff operate community health centers, of which
some are Satellite Eligibility Determination (SED) sites for CHP+, as well
as outreach sites for Medicaid and the Indigent Care Program. More centers
will be trained as SED sites this year.
HCPF contracted for outreach and enrollment functions to the Foundation
for Children and Families.3
The Foundation designed and implemented a marketing plan that includes:
a phone bank;
distribution of materials;
outreach to schools; and
These sessions train attendees to help families understand the health
plan and complete applications, and include information on eligibility,
premiums, and providers. In addition, all Satellite Eligibility Determination
(SED) sites received materials and policy and procedure updates. Approximately
800 individuals attended these training sessions during 1998.
Community Outreach. Orientation sessions were held with groups of
public school nurses, social workers and psychologists, EPSDT workers,
Family Resource Center personnel, community health center staff, Head Start
staff, public health staff, and school-based health center staff. A few
child support enforcement workers have also attended, and the number of
Head Start attendees was on the rise. Sessions were held in 24 school districts
identified as having 30 percent or more of the children in the school-lunch
Public Relations. The Bawman Group, a public relations consultant,
has a contract to generate continuous media coverage. The contract is for
$2500 per month for three - six months. The firm’s responsibility is to
network with media to cultivate an interest in CHP+ coverage, develop newsworthy
stories about CHP+ participating families, providers, and enrollment projects,
and write press releases and telemarketing scripts.
Media Activities. Airtime for TV ads was purchased for two blocks
of time during the fall and early winter. The Colorado Broadcasters Association
ran PSAs in the fall. Several staff reported that ads during the Jerry
Springer show — a daytime TV talk show — generated the largest number of
Phone Bank. A 1-800 Family Health Line phone bank at Department
of Public Health and Environment receives and tracks calls generated from
advertising. The phone line is linked to the National Governors’ Association
1-800 CHIP information phone line. Staff of the phone bank record the source
of referral (i.e., where the caller heard about CHP+), and send out application
and enrollment information. If the caller is inquiring about CHP+, they
are referred to the CHP+ special 1-800 line. If the caller lives close
enough to a SED site, they are referred there. If the caller is inquiring
about Medicaid, they are referred to their local Department of Social Services
Distribution of Materials. CHP+ outreach materials are distributed
at community training sessions, in response to bulk requests from community
agencies, and to individuals who call. Visitors to a Website can request
materials. The Website address is http://www.cchp.org.
Materials consist of applications, brochures and posters.
Outreach to Schools. Many thousands of applications and brochures
are sent to contacts in Colorado’s school districts. As a result, staff
report that nearly one-third of callers to the marketing phone bank report
they heard about CHP+ from their school.
Collaboration with Other Agencies
and Organizations on Outreach
Materials development. Staff have developed the brochures, posters,
enrollment packets, and benefits booklets in Spanish as well as English,
as well as a five-minute informational video. A second version of the video
was produced without reference to HMOs for use in areas of the state where
no HMO contracts are in place.
Several other agencies and organizations conduct outreach for CHP+:
The Foundation, Department of Public Health and Environment, and Health
Network have worked closely together with HCPF. The main feature of Colorado’s
outreach is marketing through community-based direct service workers.
Department of Public Health and Environment;
Colorado Community Health Network;
Facilities and individual providers participating in the Colorado Indigent
The Department of Public Health and Environment houses the Early
Periodic Screening, Diagnosis, and Treatment (EPSDT) program in their Title
V agency administering maternal and child health programs. DPHE contracts
with the 63 county public health agencies, who hire case managers backed
up by public health nurses.
DPHE develops policies and strategies on outreach for all child health
programs, including CHP+. These policies and strategies, with a special
focus on access to care and special needs children, are communicated
to the case managers and public health nurses in the 63 counties. The nurses
actually conduct outreach with families and other community groups.
Colorado Community Health Network works under contract to HCPF to
conduct selected outreach activities. The Health Network works with the
State Primary Care Association, whose members operate 85 primary care clinics
for the uninsured (including 20 school-based sites). The Primary Care Association
receives 80 percent of its funding from the federal Health Resources and
Services Administration (HRSA) in HHS. The Community Health Network has
a grant from HRSA for CHP+ and Medicaid outreach.
The Colorado Covering Kids Coalition, comprised of a diverse group of state
and local partners and led by DPHE, is conducting additional outreach interventions
with a grant from the Robert Wood Johnson Foundation for a "Covering Kids
The Network’s key outreach feature is its Satellite Eligibility Determination
(SED)sites. SEDs are located at school-based health clinics and community
health centers, county social service departments, family resource centers
and hospitals where eligibility can be determined immediately. In the fall
of 1998 36 sites were accepting CCHP and CHP+ applications, and another
nine are expected by the summer of 1999. Five sites process applications
via an Internet hookup to a central SQL server database. With the HRSA
grant, the Health Network plans to purchase additional software and hardware
to expand the Internet connection to half the sites by the end of 1999.
This additional capacity is expected to greatly increase enrollments.
Finally, Colorado Indigent Care Program providers, many of whom
are community health centers, received information about CHP+ and are encouraging
their families to apply.
Under a "Covering Kids Initiative" awarded by the Robert Wood Johnson Foundation,
the state and its private sector partners plan to develop and implement
model outreach and enrollment initiatives statewide and in three designated
Creating a Seamless Health Care
System for Eligible Children
Some CICP facilities, working with Foundation staff, helped with mass mailings
to CICP participants about the availability and advantages of CHP+. The
CHP+ legislation calls for moving all CICP children into CHP+. But some
staff observed that at least three factors could deter that. One is the
relatively high premiums imposed on families whose incomes place them above
the poverty level. The second is the 25,000-child cap on targeted enrollments
in CHP+. The third is a three month lock-out period (to be implemented)
imposed on families who fail to pay their CHP+ premiums. Those families
will continue to use CICP providers while they are locked out of CHP+.
Colorado does not offer presumptive eligibility to children applying
for CHP+, but there was provisional eligibility. Once an application was
received, the child was made provisionally eligible during the approximately
60 days it took to process the application and make a final determination.
Staff in local sites, such as SED sites, took applications, entered data
in the SQL server database via Internet, and conferred provisional eligibility.
The file was transferred to Denver for final determination; verification
that the applicant is not on or eligible for Medicaid; verification of
immigration status; Quality Control checks; and verification of assets
During the provisional eligibility period, the child was in a "fee-for-service",
state contracted provider system until final eligibility was determined
and the child was moved into managed care.4
Staff were concerned about the impact on benefit costs of covering children
with fee-for-service for up to 60 days, and feared that provisional eligibility
may be eliminated. In fact, the Policy Board recently directed the cessation
of this practice.5
CHP+ children, once certified and enrolled, enjoy a 12 month continuous
eligibility period before re-certification must occur.
Simplified Application and Eligibility Decisions
HCPF consolidated and simplified the application form for Medicaid and
CHP+. The form is four pages with a fifth page of rights and responsibilities.
Department of Public Health and Environment staff added seven questions
designed to identify and facilitate referral of children with special health
care needs both to SSI and the state’s Health Care Program for Children
with Special Needs. The application also asks "How did you hear about CHP+
Funding for Outreach
HCPF believes the simplified, integrated, four-page application form has
significantly improved the application process. They intend to collaborate
with other agencies to make even more improvements this year.
HCFP is spending approximately one-third of its administrative funds on
outreach for Medicaid and CHP+. Because outreach for both programs is combined,
they cannot estimate a separate amount for CHP+ outreach.
The maternal and child health staff in DPHE is piggybacking CHP+ outreach
on outreach it already conducts for other child health insurance programs,
so cannot disaggregate the costs.
The Covering Kids Initiative grant provides $1 million over three years
for outreach on Medicaid and CHP+. Half must be allocated to the state’s
Marketing to Hard-to-Reach Populations
Colorado Community Health Network has a grant of $75,000 from HRSA for
CHP+ and Medicaid outreach. In addition, Medicaid reimburses the Network
$12.65 for each application processed by outstationed Medicaid sites, and
CHP+ reimburses $10.00 for each application processed electronically at
With the large proportion of Hispanics in Colorado’s population, virtually
all outreach materials are produced in Spanish and English.
Newspaper ads were purchased in three-week blocks in rural newspapers.
DPHE placed ads on 40 Hispanic radio stations across the state.
Some public health nurses go door to door in trailer parks, and many nurses
reach deeply into rural areas.
Staff in both public and private agencies noted the dilemma they faced
near the end of 1998 over engaging in too aggressive an outreach campaign
that may create more demand for CHP+ than the budget permits them to meet.
This would create waiting lists. On the other hand, others felt that the
cost sharing requirements of CHP+ would deter enough families from enrolling
their children that the target enrollment numbers might not be met in the
first year. In the spring of 1999, staff recognized they were falling short
of their enrollment targets.
Still others were more concerned that CHP+ outreach would surface more
Medicaid-eligibles and drive up Medicaid costs. The legislature is particularly
sensitive to this scenario, given the painful experience of the early 1990s.
To date, at least 2500 children have been referred to Medicaid since July
1998, but HCPF is unable to estimate the number of children who enrolled.
It is likely that enrollments in Medicaid would be larger were it not for
the low asset test in Colorado’s Medicaid program. Since a family with
a car worth $1500 may be ineligible for Medicaid, staff believe that many
of these families will have incomes below the FPL and be eligible for CHP+,
with its asset limit of $4500.
Potential Future Outreach
Colorado’s plans for future outreach include:
Conduct more person-to-person outreach with trusted individuals visiting
individual families; initiate a training program for this outreach and
Develop a single consolidated application and simplified enrollment process
for Medicaid, CHP+, CICP, and the Health Care Program for Children with
Special Needs. The application would be produced in several languages,
and the enrollment system would allow mail-in applications;
Advice for Other States
Expand and enhance a central 1-800 Family Health Line to operate 12 hours
daily, seven days a week, adding Russian and Southeast Asian languages
to the current Spanish and English translation capabilities.
Public health nurses are a key asset for outreach. Colorado’s public health
nurses have served tirelessly as the front line of outreach to eligible
families at the county and local levels, encouraging enrollment at immunization
and well-child clinics, promoting the program throughout their county,
and persuading doctors to participate in the program.
One-on-one assistance to apply for CHP+ is the most effective way to enroll
children in the program.
Community-designed outreach and enrollment is critical. People at the local
level know best how and where to enroll eligible children in their own
community. Colorado invited communities with over 30 percent of school
children enrolled in the school meal program to develop community-based
enrollment projects. Each project assembled a collaboration of local organizations
and agencies, including the local Medicaid agencies, community health centers,
schools, and family resources centers, to design their own enrollment plan.
Colorado’s CHP+ staff have a policy to treat all callers, families, intermediaries
and providers with respect and dignity. This has gone a long way to promote
the success of the program. Families all over the state know that they
can count on CHP+ staff to listen to their concerns and respond courteously
and with caring.
The state legislature, Policy Board, and departmental officials were
seriously concerned about crowd-out. Their concerns influenced the choice
of FPL eligibility level for CHP+, the benefits package, adoption of waiting
periods, premiums and co-payments, and investigation of an employer buy-in
FPL Eligibility Level
The legislature was apprised of the research from Minnesota and elsewhere
that seemed to document that crowd-out does not occur at least until a
health insurance program’s eligibility levels reach 200 percent of the
federal poverty level. To be cautious, they chose to leave the FPL level
for CHP+ at the same 185 percent as it was in the earlier state program.
The working group which designed benefits and eligibility, with representatives
from HMOs, providers, and other businesses, grappled with whether and what
to add to the benefits package to make it richer than the old CCHP. They
recognized trade-offs between making the benefits rich enough to equate
with the Medicaid benefits package, or conserving on benefits in order
to cover more children.
The legislature wanted the plan to be based on basic and standard plan
benefits in the commercial arena. They adopted a package that includes
mental health, substance abuse, a $50 annual benefit for eyeglasses, but
As an explicit employee crowd-out measure, the legislation states
that children are ineligible who are covered under an employer plan with
at least a 50 percent employer contribution to premiums during the three
months before application. There was some discussion about whether to impose
this wait also on families who had access to employer coverage but
opted not to enroll. A consensus developed that it was too complex to assess
availability to, and affordability of, employer insurance coverage.
The state charges monthly premiums as follows:
Advocates and even some state officials fear these premiums are too high
and deter enrollment in CHP+. They point to the forty-percent response
rate to letters sent to families with children enrolled in CCHP, inviting
them to convert to CHP+. They also point to the high number of families
remaining in the free Colorado Indigent Care Program. Finally, some worry
about the "cliff effect" — where one extra dollar of income or assets makes
a family ineligible for Medicaid, but unable to afford the premiums in
Families below 100 percent FPL, no premiums;
Families at 100-149 percent FPL, $9 per child, $15 per family maximum;
Families at 150-169 percent FPL, $15 per child, $25 family maximum;
Families at 170-185 percent FPL, $20 per child, $30 family maximum;
Families above 185 percent FPL will pay full premiums. This provision is
not yet operational, so no decision has been made on what the full premium
Colorado has developed a policy, to be implemented, wherein families
failing to pay premiums will be given three written notices and a 90-day
grace period. If they still fail to pay, the children will be excluded
from coverage for 90 days.
Families with incomes above 100 percent of poverty in CHP+ face different
co-payment schedules depending on whether they earn 100-150 percent FPL
or 151-185 percent. Generally, physician visits, clinic services, vision
care, occupational, physical and speech therapy, mental health and substance
abuse treatment services are either $2 or $5, respectively. Prescriptions
cost $1 or $3, respectively, for generic drugs, but $5 for brand names.
Officials are less worried about any deterrent effect on enrollment from
the co-payments than they are the premiums.
Colorado officials in the Division of Insurance’s Office of Policy
and Research are working with HCPF to develop an employer buy-in program.
In November 1998, staff were developing a "white paper" raising the issues
to consider and questions that need to be answered to help select program
features. The paper was to be presented to the Policy Board in December,
1998. Among the issues and questions they were considering:
In accord with HCFA(now known as CMS) requirements, how can the state "bulk up" the benefits
in employer-provided plans to be benchmark equivalent? Should the state
purchase wrap-around coverage for benefits not included in an employer
Can the state pay employers a certain amount per family per month to "buy
up" benefits for children to a benchmark-equivalent level, when there are
approximately 2400 different plans operating in Colorado?
How should the state accommodate employer plan coverage that includes co-payments
that are higher than those in CHP+?
How can the state avoid having children in families working at very low
incomes receiving more generous benefits at a lower cost with CHP+ than
children in low-to-middle income families who have less generous employer
How can the state accommodate the HCFA(now known as CMS) requirement that children must lack
insurance for six months before they can be eligible for an employer buy-in?
This seems particularly inequitable for families who do not enroll immediately
upon the onset of their employment, whom the employers will lock out of
coverage until the next open enrollment period.
Colorado plans to conduct a pilot test of employer buy-in, to test the
most appropriate responses to these and other questions. They are looking
into piloting the program with a purchasing cooperative of employers that
offer a standardized benefit package.
How can an employer buy-in program be marketed through employees, not employers,
to avoid employer crowd-out?
Data Collection and Evaluation
State policymakers and agency staff relied on a variety of data to design
their program, and plan to collect data from other sources to evaluate
outreach, crowd-out, cross-program referrals, and cost-sharing.
Data for Program Design
An independent actuarial consulting firm (Leif Associates, Inc.) conducted
actuarial and claims analysis to help the state design a benefits package.
The analysis considered both children who would have to stay in fee-for-service
coverage (approximately one-fifth of the state’s children) and those who
would be covered by managed care.
Data for Program Evaluation
The University of Colorado Health Sciences Center’s Department of Health
Outcomes conducted a study comparing the earlier CCHP program to Medicaid
and private health insurance on measures of quality of care and utilization.
They looked at preventive care services (e.g., immunizations), care for
acute illness, and care for children with asthma, the most common chronic
illness of childhood. The results were used to advocate for certain features
of the benefits package. The results can be found in, Colorado Child
Health Plan Annual Report, The University of Colorado Health Sciences Center,
March 1, 1998.
To measure how well the state improves the health status of children —
especially with the availability of preventive and early primary treatment
— Plans must submit independently audited HEDIS data. Where possible, HCPF
will obtain these data for the state-contracted provider network (fee-for-service)
as well. HCPF will use the data to measure success in reaching performance
goals regarding immunizations and well-child visits.
The state also plans to analyze questions on the joint Medicaid/CHP+ application
related to children with special needs, to track what proportion of applicants
are children successfully referred to the Health Care Program for Children
with Special Needs and SSI.
To measure how much the proportion of uninsured children is reduced, the
state will analyze CPS data. Baseline numbers of uninsured children will
be calculated from a three-year average of the 1995, ‘96, and ‘97 March
supplement to the CPS. New estimates of uninsured children will be calculated
as more current data become available and will be used to compare trends
from year to year. The CPS data has been used by analysts at the American
Academy of Pediatrics (Colorado) and the Foundation to project county estimates
of uninsured children. State analysts are concerned about accurately estimating
the baseline since the proportion of employers providing coverage was already
on the decline (i.e., employment in sectors that traditionally do not provide
employer coverage was on the rise) prior to CHP+.
The Robert Wood Johnson Covering Kids grant includes funds for technical
assistance to better estimate the numbers of uninsured children.
To assess how to reduce the financial barriers to affordable health care,
clients who disenroll once their 12 months of eligibility have expired
will be asked to explain why they are leaving. Responses will be tabulated.
In addition, responses to a question on the application form, "How much
would you be willing to pay for health insurance for your children?" will
be analyzed and the results used to reassess the premium levels.
To measure the effectiveness of certain outreach strategies over others,
staff will analyze responses to the phone bank operators’ inquiry: "Where
did you hear about CHP+?" This analysis may alter next spring’s marketing
To measure employer crowd-out, analysts will obtain from CPS a three-year
average estimate of the proportion of children under 185 percent FPL covered
under an employer-based plan. They hope to devise a methodology that accounts
for decreases due to increasing health care costs or a downturn in the
economy. They expect to supplement this with Labor Department data on insurance
coverage. This task will be challenging. For example, if a large company
in Colorado has only ten percent of its employees earning under 185 FPL,
and it drops dependent coverage from the firm’s Plan, it is unlikely to
be attributable to CHP+. But when does attribution become credible? Is
it at 20 percent or 40 percent of the company workforce earning under 185
To measure employee crowd-out, analysts hope to study responses
to questions on the application about current and recent employer health
coverage. They want to develop a methodology to follow applicants denied
CHP+ eligibility due to current or recent employer coverage (last three
months), to determine whether they drop coverage, or whether they take
up other coverage. They may interview a sample of families whose children
Challenges to Implementation
State officials cited several challenges to implementation. Staff turnover
in HCPF and the few FTEs the legislature authorized to administer CHP+
slowed implementation. Delays were attributed to the time spent writing
an RFP and evaluating proposals for a contract to the new private, non-profit
organization conducting day-to-day administration. More delays were attributed
to the time Foundation staff spent responding to the RFP, and transitioning
to the private, non-profit organization.
Numerous efforts are underway to measure quality in managed care. These
efforts were originally intended to analyze quality of care for Medicaid
recipients, but will apply to CHP+ recipients in the same managed care
plans, as well. Examples include studies of continuity of client access
to appropriate care; client satisfaction surveys; and collection of HEDIS
data on utilization, access, and quality.
Some officials stated that, in retrospect, it might have been easier
to get a brand new program off the ground than to transition from CCHP
to CHP+. The most pressing administrative barrier they face is the ten
percent cap on federal match for administrative expenses.
Ten Percent Cap on Administrative
By November 1998, Colorado estimated their administrative expenses
had already reached 17 percent of total expenses for CHP+, with recent
projections that it might average 16 percent. In a report to the legislature
in 1998, HCPF stated that they projected health care costs of $14.3 million
(net premiums) and $3.3 million in administrative expenses, with federal
reimbursement of the latter expected to be $1.4 million. The difference
of $1.8 million must be paid with state-only funds.
Officials pointed to various causes for their high administrative costs,
including: the transition costs from a previous to new state program; expanding
to inpatient coverage; and developing a new automated, rules-based eligibility
determination system (Colorado Benefits Management System) that will include
CHP+ and other public assistance programs. One official said that the ten
percent cap must cover fifty percent of what Colorado is trying to do.
Funding limitations and a consequent enrollment cap initially tempered
what might otherwise have been vigorous outreach and enrollment efforts.
However, more recent projections of enrollment suggest that CHP+ might
fall short of its target, so outreach has become more aggressive.
Moreover, staff turnover in HCPF and legislative authorization for only
3.5 positions to implement CHP+ are reported to have been a barrier to
Finally, staff believe the integration of the Application Form has improved
the process for Medicaid but hindered the process for CHP+. This is because
Medicaid rules require collection of information to determine "blood lines"
and establish "the Medicaid budget unit", a requirement that is unnecessary
Web Sites for More Information
1 - For example, if the net asset value
of the family vehicle exceeds $4500, the excess is treated as additional
2 - Since the time of the site visit
for this case study, the foundation has been replaced by a private, non-profit
3 - The Foundation has been replaced,
since the site visit, by Child Health Advocates—a private, non-profit organization.
To ensure continuity of operations, the new contractor hired most of the
Child Health Plan staff from the Foundation for Children and Families.
4 - State contracts with a primary care
provider network provide for no risk-shifting to the providers.
5 - The processing time has recently
been reduced from 60 days to 15 days.