Children's Health Insurance Expansions: State Experiences in Developing Benefit Packages and Cost-Sharing Arrangements. G. The Role of Administrative Costs in Developing Approaches to Cost-sharing

02/17/1998

The administrative burdens on the program or its providers to collect premiums or copayments is another issue considered by the states. Many programs have shifted the burden of collecting copayments to providers in order to reduce the administrative costs to the program. However, it has been suggested by some states that, in many cases, providers have either been unable or unwilling to collect copayments from beneficiaries who were incapable or unwilling to pay for services rendered. This becomes a concern for providers who collect copayments from patients as a portion of their reimbursement under the program. For these providers, the inability to collect copayments may result in an overall decrease in their total reimbursement by the program.

In addition to copayments, to the extent that premium arrangements are complex, administrative burdens may be increased. While all programs need to verify income to establish program eligibility, if premiums are set on a sliding scale, there are concerns with the need for more frequent verification procedures. States also identified concerns with administrative burdens required to communicate the complexities of the payment arrangements to both participants and providers. Costs associated with these issues were not identified.

With the enactment of Title XXI, states will also be determining how best to handle the 5% limit on cost-sharing as a percent of income for families above 150% of the poverty level. For example as Colorado moves into its Title XXI program, The Colorado Children's Health Insurance Plan, they have decided that asking plans to monitor levels of family income for those above 150% of the poverty level would be too burdensome. Consequently, Colorado will allow families to monitor their own income. When a family's income changes so that the cost-sharing would exceed 5% of their income, families must submit documentation of their income to the state. At that point the state will reevaluate the family's cost-sharing. Colorado has also set the cost-sharing limits low enough so that there will be very few instances where the 5% is exceeded. Decisions regarding the details of the verification process were still being made at the time of this review.

      Individual child per month Family with two or more children, per month Copayments
    Under 100% FPL No premium No premium $0-2 depending on service
    101-150% FPL $9 $15 $0-2 depending on service
    151-169% $15 $25 $0-5 depending on service
    170-185% $20 $30 $0-5 depending on service