Innovative State Strategies to Insure Children. Massachusetts


I. Overview


A. History and General Description of Program

Authorizing legislation for the Children’s Medical Security Plan (CMSP) was passed in 1993 to provide access to preventive and primary care services for Massachusetts' uninsured children.1 The plan originally covered uninsured children age 12 or younger. The initial impetus for the program was increased national attention on health care reform and access to health care for all individuals. The passage of the Health Access Law in July 1996 expanded CMSP program eligibility to include adolescents up to age 18. In 1997, administration of the plan was transferred to the state Department of Public Health.

B. Support/Opposition for the Program in State

Program employees work closely with school nurses, family practice providers, the Boston Health Department, and others to promote the program and to receive input on a myriad of program issues including cultural competency. Advocacy groups involved in the program include Health Care for All, Massachusetts Community Hospitals, American Academy of Pediatrics, school health nurses, and others.

The State’s initial effort at providing coverage for children placed the program in an insurance agency (1989/90); however, the insurance agency was not capable of effectively conducting outreach initiatives and adequately serving a population entirely made up of children. Community organizations, namely Health Care for All and Success by Six, and the Maternal and Child Health Department advocated to expand the CMSP and move it to the Department of Health. In addition, the United Way regional director, also Chairman of the Board for Bank of Boston, very effectively lobbied the Governor for this change. The participation of a strong advocacy community was essential to the development of CMSP.

In moving the program to the Department of Health, outreach activities benefited from the experience of the Maternal and Child Health and Medicaid Departments. It was understood that the Department of Health would target those children who are not eligible for MassHealth (Medicaid) as well as undocumented children. The outstanding relationship between the Maternal and Child Health Department and Medicaid contributed to the success of the program.

C. Number of Uninsured Children in State

The number of children under 19 years of age whose family income is at or below 200 % FPL, and who are reported to be not covered by health insurance is 69,000 in Massachusetts. The U.S. Bureau of the Census determined this number based on the arithmetic average of the number of low-income children and low-income children with no health insurance as calculated from the 1995-1997 March supplements to the Current Population Survey.2


III. Implementation

A. Options Considered for Coverage

Program accessibility was a major concern of the officials who designed the Massachusetts Children’s Medical Security Plan. Materials were developed in six languages to increase the access of different cultural groups. Community groups were recruited to assist enrolling families in the plan. There has been a focused outreach effort. The five regional health offices each have an employee designated to focus on outreach efforts for the program.

B. Target Population

The target population for CMSP is uninsured children under the age of 19 who are residents of Massachusetts and who are not eligible for Medicaid. The number of projected children eligible for CMSP is 76,000.3 Ninety percent of the families enrolled in the program are employed but lack health insurance. Individuals have been followed through the program, and CMSP has seen that there is a substantial amount of flip-flopping of the employed/non-employed from this program to Medicaid or uninsurance status.

C. Services Included in Benefit Package

The Children's Medical Security Plan offers a range of benefits designed to cover the services most frequently used by children. Routine well-child check-ups, immunizations, and smoking prevention services are covered without co-payment. All other covered benefits require a co-payment of $1, $3 or $5 based on family income guidelines.4 Limited coverage is offered for emergency care, prescription drugs, durable medical equipment, and outpatient mental health services. CMSP does not pay for over-the-counter drugs, ambulance transport, inpatient care, dental care, or early intervention; however, children enrolled in CMSP may be eligible to receive inpatient care in any of the state hospitals or community health clinics through the state free care pool.

D. Provider Network

The Community Health Plan (CHP) and John Hancock administer the health insurance program. The Community Health Plan serves three rural counties with approximately 3,000 participants. John Hancock serves the remainder of the state, with roughly 34,000 enrollees. John Hancock reimburses its providers on a fee-for-service basis, while CHP reimburses both through capitation and fee-for-service arrangements.5

Any willing provider can be reimbursed for services to a child who has been insured by the Children’s Medical Security Plan. Community health clinics have complained that Medicaid reimbursed them at a higher rate, so the CMSP has begun to increase their rates to community health centers. Approximately 95% of members are within 5 miles of a provider network. Physicians have been very willing to participate in the program.

E. Sources of Financial Support for the Program

There are three sources of funding for the program: tobacco taxes, general funds, and family premium contributions.

F. Estimation of Initial Costs

The program conducts actuarial studies every year with Coopers and Lybrand to identify per member per month actual and estimated costs for the program. To date they have not had any problems with identifying the costs of the program. Initial costs were estimated to be a bit higher than they have actually been during implementation of the program.

G. Cost-Sharing Arrangements

Families earning 200% or less of the federal poverty level receive the insurance free of charge. Those families earning below 400% of the poverty level are charged a reduced premium rate of $10.50 per child per month, with a $32.50 maximum per family per month. Families with income over 400% of the poverty level are charged the full premium, which is currently set at $52.50 per month.

Co-payments exist for all services except immunizations, well-child check-ups and smoking prevention. Co-pays are $1 per visit for families below 200% of the FPL, $3 per visit for families below 400% of the FPL, and $5 per visit for families above 400% of the FPL. There is 100% coverage after co-payment for "acute care" office visits, minor surgical procedures, outpatient surgery for inguinal hernia or ear tubes, medically necessary eye exams, laboratory services, x-rays, and specialty consultations ordered by provider. Limited coverage exists for emergency care ($1,000 per benefit year), prescription drugs ($100 per benefit year with co-pay), durable medical equipment ($200 per benefit year), and outpatient mental health services (13 visits per benefit year with co-pay). Laboratory tests and mental health services are available only through specific network providers.6

H. Marketing of Program

The Department of Public Health is working with John Hancock to redesign the CMSP promotional materials to include program eligibility changes. An informational flier is in the development process, which will be targeted for teens and their families. Preventive health messages will be incorporated in all communications with families.

The Department of Public Health is identifying additional community efforts that can be supported to assure effective communications with families regarding the Children’s Medical Security Plan. For example, the Department is working closely with the superintendent and community leaders in Worcester to design an effective outreach campaign for the city that can serve as a model for other communities across the Commonwealth. Informational letters have been sent home with 200,000 school children in 120 school districts.7

Sending informational letters home with school children has worked very well for CMSP, especially in enrolling adolescents. WIC, MCH, family planning, and community health clinics have all been provided with promotional materials to distribute. CMSP has had some difficulty finding families that are not typically in touch with local or state health departments. Nurses, MCH programs, and area hospitals often reach infants and toddlers. When parents fill out emergency room forms for children, they are asked if they have insurance. If not, they are referred to CMSP.

I. Eligibility Criteria

Uninsured children under the age of 19 who are residents of Massachusetts and who are not eligible for Medicaid are eligible for the Children’s Medical Security Plan. Eligibility is based on gross income only. No assets test is conducted for any applicant. Applications are screened for Medicaid eligibility, and if the applicant is eligible for Medicaid, they are sent a Medicaid application. If the individual is not eligible for Medicaid but is eligible for CMSP, they are enrolled into the program.

J. Verification Process

The program allows for presumptive eligibility in which the content of the application must be verified within 45 days. John Hancock and the Community Health Plan prescreen applicants for Medicaid eligibility. Those individuals meeting Medicaid eligibility are not enrolled in CMSP. The plans verify family income to determine eligibility and to identify the appropriate premium if cost sharing is applicable.

There is an annual recertification process in which income, the number of children in the family, insurance status, etc. are screened to assess the family’s need for the program.

K. Enrollment Process and Waiting Period

There is a simple one-page enrollment form to be completed. The process can be completed via mail or over the phone. Phone assistants are trained to assist individuals speaking different languages to help increase program enrollment. There is on-site registration at WIC clinics and activity centers.

Any Health or Human Services Agency can assist in the enrollment of an applicant. Individuals in each of the departments have been adequately trained to assist with mail–in or phone assisted enrollment for the CMSP or MassHealth (Medicaid) program. Therefore, if an individual is not eligible for CMSP, they will be sent a Medicaid packet with the application form and all other pertinent information. Providers at community health clinics and outpatient clinics, school nurses, and advocates have also been trained to enroll children into the program.

In the case of presumptive eligibility, there is a 45-day temporary enrollment in which a provider can fax the application to CMSP allowing the child to be covered for services upon the provider’s request; however, this must be verified within 45 days. Regular enrollment requires a processing time of approximately one-week. Phone enrollment allows the individual to be enrolled presumptively the same day.

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

The authorizing legislation for the Children’s Medical Security Plan was passed in 1993, and was subsequently amended in 1994, 1995 and 1996. The process of identifying and enrolling uninsured people in Massachusetts is ongoing. Having no "typical" population served by the state government makes some of the uninsured difficult to find. Working with contractors has been challenging as well as helpful in some areas such as cultural competence. A major issue has been the comprehensiveness of the package. CMSP would have liked to provide dental benefits, which are not currently provided in the package. Discussion of how benefits should be structured and what should be included has been continual.


IV. Administration


A. How Program Fits within the State Structure

The Children’s Medical Security Plan originally resided in the Department of Medical Security, which later disbanded. Today it lies in the Department of Public Health. Much of the administrative work for CMSP has been contracted out to Unicare.8 Four staff members work in the state office.

B. Administrative Costs of the Program

The administrative costs of CMSP are $10 per member per month.

C. How Premiums, Co-pays, and Deductibles are Collected

Unicare collects premiums on a quarterly basis when bills are sent out to enrollees. Co-pays are collected by providers.

D. Cost-Shifting to Medicaid

The program works very closely with the Medicaid program.

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

The program works closely with Medicaid, WIC, and school health programs. CMSP conducts joint marketing and outreach activities with Healthy Start and family planning providers so that they can become more involved in the network of toddler and adolescent providers and programs. These joint efforts have provided a basis for growth and knowledge about the program as well as concerns for the future of the program.

When the program was moved to the Department of Health, enrollment increased from 20,000 children to 36,000 children due to outreach efforts and coordination with other children’s programs.9

F. Coordination with Medicaid

The director of CMSP meets weekly with the Medicaid program director. They also conduct joint promotions and marketing.

There is two-way communication between CMSP and Medicaid in regard to applications and denial of eligibility. If a child applies to CMSP, but is eligible for MassHealth (Medicaid), the child is enrolled in CMSP under presumptive eligibility and given an application to apply for Medicaid. The Medicaid office is made aware of the child so that they can include the child in outreach efforts.

When a child is denied eligibility for Mass Health, they are referred to CMSP. Again, CMSP grants presumptive eligibility for children needing immediate medical care because the enrollment process is much simpler than Medicaid, which requires pages of paperwork. This reduces the period of uninsurance while the child waits to be enrolled in MassHealth.

G. Coordination with Other Children’s Programs

Outreach efforts have been refocused to work with WIC, the school health unit in the Department of Public health, Healthy Start, and primary care sites. Healthy Start and CMSP have a joint marketing and outreach plan focused on families who are eligible for Healthy Start and CMSP. As the CMSP program has expanded its focus to adolescents, the program has been working closely with family planning clinics in terms of outreach and services to adolescents. CMSP also works with state immunization programs and substance abuse programs.

H. State Laws the Program is Required to Comply With

There are regulations that have been explicitly stated in the law regarding the benefit package and other specifics of the program, which CMSP must comply with. There are no current evaluation efforts being conducted.


V. Policy Issues


A. Adverse Selection

Adverse selection has not been an issue in Massachusetts as the Children’s Medical Security Plan is mainly focused on preventive care. CMSP is not a program for sick children. The benefits are simply not there for them, as they would quickly outstrip the benefit package. When the program expanded to include adolescents, this new population utilized the emergency room and sick visits more often than preventive visits. Since then, CMSP tries to educate individuals as they join the program about the use of preventive care rather than sick care.

B. Substitution of Employer Coverage

Substitution has not been considered a major issue for the Children’s Medical Security Plan. Individuals enrolled into the program are generally from working families without access to health insurance; however, families with catastrophic coverage can be accepted into the program. Approximately five to six years ago, Massachusetts was dealing with the problem of substitution as the rates for health care skyrocketed, but recently this has stabilized, and the problem has subsided. Unemployment in the state has declined substantially, which has encouraged employers to provide insurance coverage as an incentive for potential employees. CMSP is planning for a new phase that will include internal review boards, which will allow employers to buy-in to the program.

In preparing the financial analyses for the 1115 demonstration, crowd-out was a big concern. The two mechanisms that limit substitution are (1) cost sharing and (2) denying coverage to certain individuals based on their access to private coverage. In considering how to implement Title XXI, it seems correct to impose standard cost-sharing for individuals over a certain income level - whether they are in Medicaid or CMSP.

Another approach is an insurance reimbursement program, whereby Massachusetts will supply subsidies to small businesses (50 employees or less) to provide benefits to low-income workers. Incentives for employers to participate are based on the level of coverage they select and the type of policy. The employee will only pay 10%, while the state and the employer split the remaining cost. The 10% cost to the employee is comparable to other state insurance programs (i.e., CMSP, Common Health).


VI. Program Impact


A. Impact on Number of Uninsured Children in State

The number of children insured through CMSP has increased from 20,000 to 36,000 since the program was moved to the Department of Public Health. The projection was set at 31,000, and CMSP has exceeded that projection. There are approximately 141,000 uninsured children in Massachusetts.10

B. Other Direct Impacts

As a result of the Community Health Plan and John Hancock being involved with the CMSP, there has been an increased interest from insurance companies. There has been increased competition among insurers and health plans to contract with CMSP.


VII. Future of Program


A. Lessons Learned

Integrate the program into all health systems so that families are not falling into gaps.

The program must especially link to Medicaid without attaching any of Medicaid’s stigma. Ensure that the program does not perpetuate any stigmatism by having a health card that looks like everyone else’s.

"Privatization" has been a good thing. Although this is a public program for the most part, CMSP has contracted with private companies to provide the care and to organize most of the administrative efforts. Thus, enrollees feel as if they have a private insurance product, which decreases stigmatism and increases trust.

Ensure that the program is user friendly.

B. Vision of the Future of the Program

CMSP put out another RFP for services in the winter of 1997. Options other than just having two vendors for the entire state are being considered. Choice is an important issue for CMSP to deal with. Efforts will be made to expand the benefit package under the current law. Recently, the program changed its pharmaceutical benefits. Originally, claims had to be sent to John Hancock for processing. Now, the Pharmacy Access Plan has added providers to the computer network so pharmacists can collect the co-pays. There are approximately 3,000 pharmacies that are a part of the Plan.11

Title XXI of the Social Security Act will allow CMSP to take a look at their benefit package again. It will also allow them to have enough funding to find those missing children that have not been covered under the current program. Title XXI will be used to build on the recently expanded 1115 waiver to include kids between 133% and 200% of the federal poverty level (FPL). Families earning over 133% FPL have three choices for acquiring health insurance: MassHealth (Medicaid), CMSP, and Common Health (for disabled and seriously ill adults and children). They will also be able to purchase state subsidized employer-sponsored insurance.

On July 1, 1997, a one-time spend-down process was implemented, whereby an individual (adult or child who is severely disabled and under 200% FPL) has a six month window to achieve spend-down in order to be eligible for a Medicaid benefit package. Once spend–down is achieved, the individual can enroll in Common Health, which offers a Medicaid benefit package with a sliding scale premium.

1. MGL 118F sec 17B.

2. Final Federal Register notice: State Children's Health Insurance Program; Reserved Allotments to States for Fiscal Year 1988; Enhanced Federal Medical Assistance Percentages -- Septemeber 9, 1997.

3. "About the Children's Medical Security Plan." The Commonwealth of Massachusetts, Executive Office of Health and Human Services, Department of Public Health. Februrary 1997.

4. "About the Children's Medical Security Plan." The Commonwealth of Massachusetts, Executive Office of Health and Human Services, Department of Public Health. Februrary 1997.

5. At the time of interview in Summer 1997, John Hancock was administerting the program. Since then, Unicare has taken over the adminstrative function.

6. "About the Children's Medical Security Plan." The Commonwealth of Massachusetts, Executive Office of Health and Human Services, Department of Public Health. Februrary 1997.

7. "Children's Medical Security Plan Program Highlights." The Commonwealth of Massachusetts, Executive Office of Health and Human Services, Department of Public Health. Februrary 1997.

8. Formerly John Hancock.

9. Interview, Summer 1997

10. Interview, Summer 1997

11. Interview, Fall 1997.