Children's Health Insurance Expansions: State Experiences in Developing Benefit Packages and Cost-Sharing Arrangements. Conclusion


This paper has reviewed the experiences of nine states that used either Medicaid expansions or developed stand alone programs to expand health insurance for children prior to the enactment of Title XXI. Their decisions regarding benefits and cost-sharing arrangements reflected the overall program objectives they were trying to achieve and the cost implications of their choices. The objectives the states considered included: assuring a comprehensive benefit package through a Medicaid expansion; provision of primary and preventive services to as many uninsured children as possible; and/or addressing coverage for a specific population of uninsured children such as transitional care to children without health benefits. As states consider their options under Title XXI, these same factors are likely to affect their decision-making.

States' decisions regarding cost-sharing arrangements reflected their overall philosophy regarding premiums and copayments and trial and error approaches. States considered cost-sharing mechanisms such as premiums, fees for enrolling in the program, and copayments for specific services as a means of offsetting cost, a way to instill a sense of responsibility in participants for their health care, and/or a way to minimize the welfare stigma associated with public programs. For the majority of states, the cost recovery features were not a major driving force. Cost-sharing was viewed by some states as a way to limit potential substitution effects of the public programs and provide a bridge between public and private programs.

A major issue underlying the states considerations of cost-sharing approaches was price sensitivity. States emphasized concerns that programs be affordable and not deter enrollment of targeted populations and their appropriate utilization of services. However, decisions related to cost-sharing were generally based on anticipated effects and limited experience. There is presently little evidence or data on the appropriate levels of cost-sharing and the use of sliding scales and family caps to maintain affordability. As all states move toward implementation of Title XXI, evaluation and research related to price sensitivity may provide important information for further decisions.