Children's Health Insurance Expansions: State Experiences in Developing Benefit Packages and Cost-Sharing Arrangements. D. Selection of Sliding Scales or Flat Rates


Related to issues of price sensitivity is the decision of whether to implement a flat fee premium for all participants or one that is based on a sliding-scale. While a flat-fee may be administratively appealing because it is simpler to administer, designing premiums on an income-based sliding scale may encourage greater participation. Of the nine states examined in this study, the Colorado Children's Health Plan is the only program that has a flat enrollment fee. The Colorado program has a $25 enrollment fee per participating child per year up to a total of $125 per family. Of the other eight states, Florida, Massachusetts, Minnesota, New York, Pennsylvania, and Tennessee all have monthly premiums based on a sliding scale that is based on family size and income. The California Kids and Washington Basic Health Plan Plus programs have no premiums.

The Florida Healthy Kids program has a sliding scale based on three levels and premiums vary by county. Levels are based on the eligibility criteria the state uses for enrollment in the school lunch program: Free Lunch, Reduced Lunch, and Not on Lunch Program. This results in premiums in Volusia County of $10 per member/month for students on the free lunch program, $25 for students on the reduced lunch program, and $48 per month for those not participating in the lunch program. Florida Healthy Kids chose sliding scales based on the lunch program rather than income because it was easier for families to understand. The program staff indicated that many families do not know what percentage of poverty they are, whereas they know if they are receiving free or reduced lunch.

Other programs have opted to base their monthly premiums on income. For example, TennCare participants who are below 100% FPL receive fully subsidized services, and those above 400% of the poverty level pay the full cost of the premium. Families that are between 100% and 400% of the poverty level pay premiums based on a sliding scale. States with premiums based on a sliding scale are illustrated in Attachment A.