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

02/17/1998

There are a series of complex decisions that states must make when designing a children's health insurance benefit package. The states included in this review of programs developed prior to the enactment of Title XXI faced decisions that differ in part from those now facing states who must respond to the specific requirements of Title XXI. In particular, the stand alone programs did not have to address any requirements for specific federally defined benefits.

Like states under Title XXI, however, the states in this review had the option of considering whether to expand coverage under a Medicaid expansion or by creating a separate health insurance program. As part of that decision, states identified the objectives they wished to achieve, such as: provision of a comprehensive benefit package (generally through a Medicaid expansion); provision of primary and preventive services to as many uninsured children as possible; and provision of coverage for a specific population of uninsured children (i.e., filling a gap).

The benefits offered by the states presented in this report as of August 1997 are described in Table 3 below.

Table 3: State Benefit Packages

      California-Kids Colorado Children's Basic Health Plan Florida Healthy Kids1 MA Children's Medical Security Plan Minnesota-Care New York Child Health Plus2 Pennsylvania CHIP TennCare Washington Basic Health Plus
    Well Child Visits

    x

    x

    x

    x

    x

    x

    x

    x

    x

    Immunizations

    x

    x

    x

    x

    x

    x

    x

    x

    x

    Sick Care

    x

    x

    x

    x

    x

    x

    x

    x

    x

    Outpatient Care

    x

    x

    x

    x

    x

    x

    x

    x

    x

    Inpatient Care    

    x

     

    x

    x

    x

    x

    x

    Emergency Room Use

    x

    x

    x

    x

    x

    x

    x

    x

    x

    Prescriptions

    x

    x

    x

    x

    x

    x

    x

    x

    x

    Dental Care

    x

     

    x

     

    x

     

    x

    x

    x

    Eyeglasses

    x

     

    x

     

    x

     

    x

    x

    x

    Hearing Aids

    x

     

    x

    x

    x

     

    x

    x

    x

    1 Not all Florida counties offer dental benefits.
    2 New York benefits were expanded to include inpatient care effective 10/1/97.

    Objective 1: Providing a comprehensive Medicaid benefit package
    Minnesota, Tennessee, and Washington opted to provide a comprehensive array of benefits under a Medicaid expansion. Due to the comprehensiveness of the coverage requirements, these states provide inpatient care and dental, vision and hearing services, in addition to preventive care. For example, MinnesotaCare provides a rich benefit package modeled on the state Medicaid program for children up to 275% of the poverty level. Comprehensive health care services are offered, including dental care, eyeglasses, mental health and substance abuse treatment, chiropractic care, home care, hospice care, and durable medical equipment.

    Objective 2: Providing preventive services to as many children as possible
    The Colorado Children's Health Plan, CaliforniaKids, Massachusetts Children's Medical Security Plan and New York's Child Health Plus programs decided to provide preventive health services to as many children as possible. By focusing on covering as large a population as possible, these states opted for a more limited benefit package. Their benefit packages excluded such costly services as inpatient, dental, vision, and hearing. For example, New York's Child Health Plus Program, the largest of the 13 non-Medicaid, taxpayer-funded child health insurance programs, provided a modest benefit package which covered preventive care, ambulatory surgery, emergency care, and prescription drugs. As of July 1, 1997, the program was providing coverage to over 135,000 children. This program expanded its benefits to include inpatient care as of October 1, 1997, but has raised premiums to offset the costs of adding this benefit. Similarly, the CaliforniaKids program was designed to limit inappropriate emergency room use by providing preventive care to as many children as possible. By excluding inpatient care, the program was fiscally capable of reaching a broader population of children.

    Objective 3: Providing coverage for a specific population of uninsured children
    Some children's health insurance programs were established to provide insurance for a specific population. The Caring Programs were initially the only programs that had experience developing health insurance products for a "gap" population. The first Caring Program was established in Western Pennsylvania in 1989 after the steel industry lay-offs, and its tremendous public appeal led to replication efforts in twenty-six other sites. The Caring Program generally serves children within 100-150% of the poverty level. The Caring Program model was designed to provide transitional care for children without insurance coverage and as such did not include a comprehensive benefit package. The limited benefits of the Caring Program led many states to significantly expand their benefits over time. For example, when the state of Pennsylvania established its state-sponsored Children's Health Insurance Program (CHIP), the state modeled its state program on the original Caring program but added additional benefits such as dental, vision, hearing, prescription drugs, and hospitalization to meet state legislative requirements. The following year, 1994, both the CHIP and Caring Programs added mental health benefits.

    The Colorado Children's Health Plan, also initially modeled on the Caring Program, is now being significantly expanded to include inpatient services and mental health care when it is incorporated into the new Children's Basic Health Plan in July 1998. The Colorado Children's Health Plan (CCHP) initially targeted families in rural counties in northeast Colorado, since those families had limited access to health care and few safety net providers were available to fill the gaps. The program gradually expanded throughout the state. Benefits included most primary and preventive services, but did not include inpatient hospital care, eyeglasses, hearing aids or dental care. Benefits were also capped at annual maximum of $10,000 per child.