Examining Substitution: State Strategies to Limit "Crowd Out" in the Era of Children's Health Insurance Expansions. Florida Healthy Kids Corporation



The Florida Healthy Kids Corporation was established in November 1990 to create a comprehensive insurance product for school children using Florida school districts as a grouping mechanism. A HCFA(now known as CMS)-funded demonstration project of Healthy Kids was initiated in Volusia County in 1992 and was completed in 1995. In late 1993, Healthy Kids began expanding into additional counties utilizing both state and local government funds. Healthy Kids currently serves 24 of Florida’s 67 counties, which contain over half the state’s uninsured children. The program is designed to provide affordable access to health insurance for all Florida children. Children who are not on the school lunch program pay the entire cost of their insurance, while children who are on the school lunch program have access to subsidized insurance. Participation by Florida counties in the Healthy Kids program is strictly voluntary.


Once a school district elects to participate in the program, qualified children become eligible for Healthy Kids. Children must be between the ages of 5 and 19, uninsured (i.e. not enrolled in Medicaid or private insurance), and enrolled in school up to the 12th grade. Counties may expand eligibility to allow children of other age groups the ability to participate (e.g. children who are less than school age whose families are enrolled in Healthy Kids).


Program benefits are extensive, including inpatient care, surgery, emergency services and transportation, eyeglasses, hearing aids, physical therapy, mental health services, pre-natal care and delivery, and organ transplants. Co-payments are required for certain benefits. Counties may add additional services such as dental care to the package. Healthy Kids has a $1,000,000 lifetime cap on services received.


Twelve managed care networks serve Healthy Kids enrollees. Insurers are selected on the basis of five variables: price, benefits, provider network, reporting capabilities, and general criteria such as accreditation and solvency. Healthy Kids aggregates state, local and family funds to pay premiums to commercial health plans that assume the insurance risk.


All individuals enrolled in the Healthy Kids program are required to pay some portion of the cost of their insurance. Sliding-scale premiums are based on reported family income required for participation in the school lunch program. The three cost-sharing levels are "Free Lunch", "Reduced Lunch", and "Not on Lunch Program". Premium levels vary by county. Funding for the demonstration project in Volusia county came from a HCFA(now known as CMS) waiver. All subsequent funding has been granted through a combination of state, local and family contributions.