Innovative State Strategies to Insure Children. California

07/08/2004

The following information regards the CaliforniaKids program only. California’s Access for Infants and Mothers (AIM) program covers children until their second birthday. California’s Children’s Treatment Program, a companion program to the state’s Child Health and Disability Prevention program (CHDP), provides care for conditions identified as "new" and only when identified at a CHDP screening.

I. Overview

 

A. History and General Description of Program

CaliforniaKids is a non-profit organization sponsored by private donations that was founded July 30, 1992. The program was initially based in Los Angeles, but has since expanded to twenty-four other counties in California. CaliforniaKids offers children a limited health insurance product that focuses on preventive care. The program coordinates with Medi-Cal, the state Medicaid program, to obtain care for children who need inpatient treatment or other serious care that CaliforniaKids does not provide. CaliforniaKids partners with community organizations to identify and enroll eligible children. Children enrolled in CaliforniaKids pay no monthly premiums, but are responsible for small co-payments for their care. CaliforniaKids has provided coverage for over 18,000 children since its inception in 1992.1

B. Support/Opposition for Program in State

There has not been a lot of state support for CaliforniaKids due to lack of available state funds. However, CaliforniaKids has received support at the local/community level to identify and enroll eligible children. Community organizations that partner with CaliforniaKids include: school nurses (most of the enrollees come from schools); Head Start and Healthy Start programs; child care councils; the Child Health, Disability, and Prevention Program (CHDP); Access for Infants and Mothers (AIM); the Boys and Girls Club; and Big Brothers, Big Sisters.

C. Number of Uninsured Children in State

According to 1995 data, there were 1.7 million uninsured children in California through age 18. Roughly 400,000 of these met the requirements for Medi-Cal but were not enrolled.2

 

II. Program Design

 

A. Options Considered for Coverage

CaliforniaKids created an organization based on philanthropic support in order to build a basic model for children’s health insurance and then expand as more funding became available. The program was initially based in Los Angeles, but as more financial support was received it was expanded to the following counties: Alameda, Contra Costa, El Dorado, Fresno, Kern, Kings, Madera, Merced, Orange, Placer, Riverside, Sacremento, San Bernardino, San Diego, San Francisco, San Luis Obispo, San Mateo, Santa Clara, Shasta, Solano, Stanislaus, Tulare, Yolo, and Ventura County.

Important issues considered when designing the program included:

Cost/funding

Impact

Enrollment

Benefits

Premiums

Co-payments

B. Target Population

Uninsured children ages 2-18 who are unmarried, ineligible for coverage under any federal or state health benefit program, not currently enrolled under a private health care contract, and enrolled and attending school (if school-age) are eligible for CaliforniaKids if their family income is below 200% of the poverty level. In August 1997, a pilot program was begun in San Diego that will expand the income eligibility level up to 300% of the poverty level in that county.3

C. Services Included in Benefit Package

Doctor's Visits:

Yes ($5 co-pay for office visits).

Health Screening:

Yes

Immunization:

Yes

Sick Care:

Yes

Prescriptions:

Yes

Dental Care:

Yes ($10 co-pay). Initiated 11/95.

Eye Glasses:

Yes ($10 co-pay for eye exams). Initiated vision care11/94.

Screening and Hearing Aids:

Yes

Emergency:

Yes

Outpatient:

Yes

Inpatient:

No

D. Provider Network

CaliforniaKids utilizes a managed care, capitated system to maintain cost-effectiveness, to minimize risk and unnecessary administrative expense due to excessive claims processing, and to provide a "medical home" for enrolled children. The network maintains choice and is sensitive to access, culture, language, gender, and age of child. Over 15,000 health care providers are contracted to provide services throughout the State and a 24-hour nurse hotline is available to all members to provide health care information and re-direct care from the emergency room to a lower cost, appropriate alternative. Plans donate their direct administrative expenses. CaliforniaKids partners with medical groups and independent physician associations (IPAs), which offer wellness education to the plan's members. Services are administered by Blue Cross of California, Delta Dental, Vision Service Plan, Wellpoint Pharmacy, and Access Health.

E. Sources of Financial Support for the Program

CaliforniaKids is sponsored entirely by private donations.

F. Estimation of Initial Costs

Actuaries initially estimated that it would cost $400 per member per year or $33 per month to operate CaliforniaKids.4 Benefits at that time included outpatient visits, ER, and prescriptions. There was a $5 co-payment for all services except for emergency room visits, which had a $25 co-payment. After the first year of implementation, it was discovered that the benefits package was only costing $22 per member per month, so benefits were expanded to include vision care. The following year, CaliforniaKids costs were still less than $33 per member per month, so dental benefits were added as well. In addition, CaliforniaKids contracted with Access Health to provide a 24-hour hotline, staffed by a nurse, to answer questions and divert patients away from emergency room use.

G. Cost-Sharing Arrangements

There is a $5 co-payment for office visits, $10 for dental care, $10 for vision care, and $10 for prescriptions. There are no premiums.

F. Marketing of Program

Schools are the primary resource for identifying eligible children (e.g., school nurses, Head Start programs, and Healthy Start programs). Utilization of the Child Care Councils in each county provides outreach to hundreds of day care centers. CaliforniaKids also uses brochures, pamphlets, and folders containing information sheets. Materials are available in Spanish for enrollees.

I. Eligibility Criteria

Residents of California ages 2-18 who are unmarried, ineligible for coverage under any federal or state health benefit program, not currently enrolled under a private health care contract, and enrolled and attending school (if school-age) are eligible for CaliforniaKids. Families must be below 200% of the federal poverty level (FPL).

J. Verification Process

CaliforniaKids asks for a copy of the IRS 1040 form, and current paycheck stubs, and copies of verification of any Social Security, disability, or child support payments to verify income level.

K. Enrollment Process and Waiting Period

CaliforniaKids utilizes a one-page, mail-in application form. Along with a completed application, the parent must include two current pay stubs and a recent copy of their IRS 1040 tax statement to verify income. All eligible children in a family are enrolled at the same time. CaliforniaKids works closely with school nurses to ensure that families are provided assistance in filling out the application. Providers, WIC clinics, and welfare offices can all assist in helping families fill out the application, but the application must still be mailed to CaliforniaKids. It takes 2-6 weeks to enroll a child. CaliforniaKids closes enrollment on the 20th of each month.

The program does not currently have a waiting list. As CaliforniaKids expands the program to 300% in San Diego, there will be more marketing and a greater potential for a waiting list to develop.

 

III. Implementation

 

A. Amount of Time it Took to Implement the Program and Begin Enrollment

During the first month of implementation, 46 children were enrolled. Since inception, 18,000 children have been served. Currently 8,500 are being served.5

MONTH

YEAR

ENROLLMENT6

July

92

46

Jan

93

153

July

93

298

Jan

94

735

July

94

2000

Jan

95

3200

July

96

4200

Jan

96

5826

July

96

7521

Jan

97

8250

 

IV. Administration

 

A. How Program Fits within the State Structure

CaliforniaKids does not have a formal relationship with the State of California. It is a private organization sponsored by donations.

B. Administrative Costs of the Program

Cost Per Child: $33/month or $400/year.7

C. How Premiums, Copays, and Deductibles are Collected

 

D. Cost-Shifting to Medicaid

CaliforniaKids does not provide inpatient care. Children requiring inpatient services are referred to Medicaid.

E. Interaction with Other Children’s Programs at the State Level

CaliforniaKids coordinates with AIM, WIC, Head Start, Medi-Cal, and the Child Health, Disability, and Prevention Program (CHDP).

F. Coordination with Medicaid

Coordination with Medicaid is done on a case-by-case basis. When a child needs inpatient care CaliforniaKids contacts Medi-Cal.

G. Coordination with Other Children’s Programs

Other state programs have enrollment information for CaliforniaKids and can assist families in filling out the application.

H. State Laws the Program is Required to Comply With

 

V. Policy Issues

 

A. Adverse Selection

Some adverse selection occurs because school nurses target sick children that do not have health coverage. In order to compensate for adverse selection, CaliforniaKids requires all eligible children in the family to enroll at the same time.

B. Substitution of Employer Coverage

CaliforniaKids limits substitution by not offering inpatient care. Employer-sponsored insurance usually provides inpatient care, so there is no incentive for a family to drop employer coverage to participate in CaliforniaKids. CaliforniaKids doesn’t have any data on substitution. However, anecdotal information (from talking with families) suggests that if families did drop employer coverage, it was because it wasn’t affordable or didn’t offer needed services. As they expand the program in San Diego to include families up to 300% FPL, they will probably have more information on substitution. CaliforniaKids is a relatively small program, so substitution hasn’t been a real concern.

 

VI. Program Impact

 

A. Impact on Number of Uninsured Children in State

Since its inception, CaliforniaKids has provided health coverage to over 18,000 children.8

B. Other Direct Impacts

 

VII. Future of Program

 

A. Lessons Learned

CaliforniaKids would make the following recommendations to a state that is planning on starting a children’s health insurance program: 1) prevention is most important, because that will help the majority of children and will provide the "biggest bang for the buck;" 2) the program should be user friendly and simple; 3) it’s important to treat your population with dignity (i.e., require co-payments, provide a traditional insurance card); 4) philanthropic support is not the answer because it will only reach a limited number of children.

B. Vision of the Future of the Program

In August 1997, CaliforniaKids launched a pilot program in San Diego. The program was expanded to include families up to 300% FPL based on a sliding scale fee. CaliforniaKids has noticed that often families' incomes improve after one year and exceed the eligibility level of 200% FPL. By expanding the program to 300% FPL, they hope to build a bigger bridge between Medi-Cal and employer sponsored insurance.

The Packard Foundation has funded an 18-month multi-method evaluation being conducted by the University of San Francisco's Institute for Health Policy Studies to evaluate member satisfaction, comparisons to the commercial and Medi-Cal populations, health outcomes, the lapse/turnover rate, and utilization. The evaluation results will influence the vision of the program.

1. Interview, February 1998.

2. California's Working Families & Their Uninsured Children: Policy Building Blocks for Change. Children Now. March 1997

3. Interview, Summer 1997.

4. Interview, Summer 1997.

5. Interview, February 1998.

6. Interview, May 30, 1997.

7. CaliforniaKids pamphlet.

8. Interview, February 1998.