Children's Health Insurance Expansions: State Experiences in Developing Benefit Packages and Cost-Sharing Arrangements. F. The Impact of Premiums and Copayments on Substitution


The majority of states' efforts to limit substitution have been focused on the dynamics that drive families to "opt out" of purchasing insurance coverage for their children. State strategies to limit individual-based substitution have included the use of premiums and copayments that mirror requirements in the private market. For example, New York State believed that a $9-$13 monthly premium per child up to a family of three would discourage most families from dropping private insurance to enroll in the New York Child Health Plus Program. Data, however, did not support this belief. As a result, the state program continues to experiment with cost-sharing.

States have also established copayments for physician visits, prescription, and emergency room use to mirror the requirements of private coverage. The Florida Healthy Kids program also believes that setting copayments at a comparable rate to private health coverage discourages families from substituting private coverage for the Healthy Kids program.