Children's Health Insurance Expansions: State Experiences in Developing Benefit Packages and Cost-Sharing Arrangements. Medicaid Expansion Programs: Minnesota, Tennessee and Washington

02/17/1998

Prior to the enactment of Title XXI, states expanding health insurance coverage for children used both expansions of their Medicaid programs beyond Federally mandated eligibility levels and private insurance programs. States that decided to expand Medicaid generally did so to take advantage of the existing administrative structure and to benefit from the ability to get federal support in sharing the costs of the expansion. While states could expand coverage in their programs under Section 1902(r)(2) of the Social Security Act, these expansions generally had to conform to existing Medicaid provisions and expansions were limited to those who met the programs categorical requirements. Those states wanting to expand eligibility more broadly (e.g., include all individuals below a given income threshold) and receive federal match for these expansions were required to apply for federal approval of demonstration waivers under Section 1115 of the Social Security Act. The 1115 waivers also were used by the states to expand the use of mandatory managed care in the Medicaid program in order to obtain cost savings that could be used to finance coverage expansions. 1115 waivers are granted for a five year period (they can be renewed for three years) and are subject to evaluation of cost neutrality.

Of the nine states examined for this paper, three have enacted Medicaid expansions to insure additional children: Minnesota, Tennessee and Washington. Eligibility requirements for these programs are detailed in Table 1. All three states currently are operating their programs under 1115 waivers although two of the programs did so after having implemented state only efforts.

Table 1: Eligibility for Children in Medicaid Expansion Programs
(as of August 1997)

  Minnesota Care TennCare Washington Basic Health Plus
Age <21 <18 <19
Income <275% FPL No Income Limits <200% FPL