Issues in Developing Programs for Uninsured Children: A Resource Book for States. D. Issues Related to the Non-payment of Premiums


States have established various policies related to the non-payment of required monthly premiums. For example, states that have required premiums have identified the length of time they will permit children to remain in the program when their parents neglect to pay monthly premiums or annual enrollment fees. Three of the six states with monthly mail-in premiums distribute at least one warning letter before disenrolling a child. In other programs, the lack of payment for services rendered (30, 60 days) will result in the disenrollment from the program.

  • The Colorado Child Health Plan requires families to renew enrollment on an annual basis. If enrollees fail to pay the annual enrollment fee, they are disenrolled from the program. CCHP distributed a survey in 1996 to identify the reasons that children were not re-enrolled into the program. Of the 42.6% of children enrolled in CCHP who did not renew their coverage, 23% were too old to qualify; 29% moved out of the area; 11.5% became Medicaid eligible; 11.5% had increased family assets and were no longer eligible for CCHP; and 14% acquired other insurance.
  • In the Florida Healthy Kids Program, families are required to pay monthly premiums one month in advance. For example, the premium for the month of December is due November first. Families who fail to submit the premium by the 7th of the month receive a late fee notice, reminding the enrollee of the premium payment and warning that coverage may be cancelled if the payment is not received. If the payment is not received by the 14th-17th of the month, enrollees will receive a second warning letter. On the 28th of the month, a cancellation letter is sent out to inform the family that their child's coverage has been cancelled. In recognition of the difficulty of some families to make payment, there is a liberal reinstatement policy.
  • In Minnesota, beneficiaries are provided a 30 day grace period and if they fail to pay one monthly premium are disenrolled from the program and are not eligible to reenroll for another four months. "Good cause" exceptions to 4 month penalties can be made. At this point, Minnesota does not conduct any follow-up with families to identify reasons for missed premium payments. Minnesota program officials are currently examining their policy to identify its effectiveness. In New York, families are provided a thirty-day grace period if they fail to pay their child's monthly premium. During this time they are sent a reminder letter regarding the monthly premium. However, if payment is not made by the end of the thirty-day grace period, the beneficiary is dropped from the program.
  • In Pennsylvania, health plans contracted by CHIP have the option of terminating the child’s coverage if families miss their monthly premium; however, individual plans have the freedom to decide when and how to cancel coverage. The Department of Insurance has no formal regulations concerning the non-payment of premiums by families enrolled in CHIP, and all decisions are determined by the contracted plans.
  • In Tennessee, if a premium is not received, a warning notice is issued indicating that enrollment will be terminated within sixty days if payment is not received. After the first 30 days, families are sent a notice that enrollment will be terminated within 30 days. After the entire sixty day period is up, if families have not yet made payment they are disenrolled from TennCare. However, if families pay the back premiums, they can be reinstated at any time.