The recent enactment of the State Children's Health Insurance Program (CHIP), under Title XXI of the Social Security Act is providing $24 billion in funding to states over a five-year period to expand health insurance coverage to uninsured children. States have the option of expanding their existing Medicaid programs, developing stand alone programs or some combination of the two. As states select their approaches, design of the benefit package including cost-sharing features is one of the critical considerations they are facing. While the legislation defines standards for benefit packages and limits the extent to which states can impose premiums or cost-sharing (i.e., deductibles and copayments), the states maintain a fair amount of flexibility in designing their programs.
This report is based upon an historical review of nine states that have already undertaken major children's health expansions and their experiences in developing benefit packages and cost-sharing arrangements. Information provided by the state programs and review of available published materials provides the basic input for the descriptions and discussion that follow. Because the programs reviewed here were developed prior to the enactment of Title XXI, some of the issues and concerns described by these programs may not have the same relevance or implications for the future efforts of states. Given the paucity of research to inform state decisions in these areas, however, these prior experiences do help point out many issues and considerations in determining benefits and cost-sharing requirements for the new children's health insurance programs. As such it may provide guidance to states as they develop their programs under Title XXI.