Examining Substitution: State Strategies to Limit "Crowd Out" in the Era of Children's Health Insurance Expansions. A. States have developed a variety of strategies to limit individual-based substitution.

12/09/1997

State mechanisms to limit individual-based substitution primarily target those dynamics that prompt family decisions to opt out of private coverage such as: the cost comparisons of copayments and premiums; the affordability of private coverage; and the comprehensiveness of benefits. The majority of states’ efforts to curb substitution has focused on the dynamics that drive families to opt out since individual-based substitution is a greater concern than employer-based substitution. The primary mechanisms utilized by states include the following: (1) evaluating affordability of private coverage; (2) requiring periods of uninsurance; (3) providing subsidies; and (4) limiting the scope of benefit packages. These mechanisms are effective ways to curb substitution by making state-sponsored children’s health insurance comparable to employer-sponsored coverage.

Exhibit 1: Mechanisms to Limit Individuals from Substituting Private Coverage
STATE PROGRAM

MECHANISMS TO LIMIT INDIVIDUALS FROM SUBSTITUTING PRIVATE COVERAGE

 

Evaluating Affordability of Private Coverage

Periods of Uninsurance

Providing Subsidies

Limiting Scope of Benefit Package

 

Increasing Premiums

Redefining Copayments

     
CaliforniaKids        

X

Children’s Medical Security Plan (MA)

X

   

Under considerationg

X

Colorado Child Health Plan    

To be implementede

Under considerationf

 
Florida Healthy Kids Corporation  

X

Xa

Under consideration

 

MinnesotaCare

   

X

 

Xj

NY Child Health Plus

Xb

Xc

   

Xd

Oregon Health Plan    

To be implementedh

To be implementedi

 
RiteCare  

X

     
Washington Basic Health Plan Plus