There is wide variation among programs for how coverage is achieved. Programs can be structured so that premium subsidies can be used for ESI only, for purchase of state-contracted benefit plans, or either depending on the participants’ access to ESI. Some programs only enroll participants who have access to ESI (or whose employer agrees to offer ESI) in an effort to promote employment-based health insurance coverage. These programs will often require that the employer pay a portion of the premium, in addition to the subsidy and employee contribution, and are therefore referred to as “three share” programs (with the state share being the subsidized portion of the premium). Muskegon, Michigan has a three share program where the employee and employer each pay 30% of the premium, with the remainder subsidized with public dollars. According to a report by the Employee Benefit Research Institute, this program “is generally regarded as a successful community-based approach to expanding health care coverage to uninsured workers.” The organization that runs the program has repeatedly been consulted for technical assistance by other communities throughout the country, suggesting it is perceived as a replicable model.
Other programs will enroll participants in a benefit plan (or one of several benefit plans available) that the state offers through a contract with a private insurer(s). Usually these participating plans are required to provide a benefit package that adheres to certain minimum benefit requirements set by the state, based upon state-defined premium amounts. For example, the Pennsylvania adultBasic program is a state run premium subsidy program for low-income adults that enrolls participants in one of four plans offered through contracts with the state’s Blue Cross and Blue Shield plans. The plans must adhere to certain minimum benefit requirements, and premiums are set by the state annually.
Another example is the Massachusetts Commonwealth Care plans. These plans must include:
- Outpatient medical care,
- Inpatient medical care (hospitalization),
- Mental health and substance abuse services,
- Prescription drugs,
- Rehabilitative services,
- Vision care,
- Emergency care, and
- Wellness care.
Regardless of the plan in which a participant chooses to enroll, they will all have these same covered benefits as required by Massachusetts law. There may, however, be some variation in the amount or scope of the benefits. All plans are required to be actuarially equivalent and to cover the minimum benefits, but they may offer slight differences in coverage.
Programs may also allow enrollment in either an ESI plan or a state-contracted plan. States can require eligible participants to enroll in ESI if they have access to it, while enrolling those without access into a state-contracted benefit plan. Because benefits can vary greatly from plan to plan, and states may not have control over the benefits offered or cost-sharing required for ESI, they may allow program participants the option of choosing between enrolling in ESI (if available) and the state-contracted plan.