NY tests limits of benefit package and affordability as it aims to double size of childrens insurance plan
New York Uninsured Kids
Family’s share of monthly insurance cost (NY and MN)
(family of four with 2 children, by income level)
New York Minnesota
Less than $19,260
0 $4-$33
$19,260-$25,615
$18 $33-$54
$25,616-$35,631
$26 $54-$145
More than $35,631
Full Premium* $145-full premium*
* Full premiums vary in New York depending on the insurer, but generally are expected to be $1,000 annually or more. In Minnesota, full premium is $2,364 a year.
As the White House and Congress struggle to reach an agreement on how best to provide coverage for uninsured children, New York state officials are moving forward with an aggressive plan to expand both the coverage the state provides and the number of children it insures in its program, Child Health Plus. The expansion this summer of New York’s plan, the largest of 13 non-Medicaid, taxpayer-funded child health insurance programs in the country, will test the limits of benefit packages and affordability. The state’s goal is to have 250,000 children enrolled in the next few years. As of July 1, New York’s Child Health Plus plan was providing preventive care to 114,000 children under the age of 19 — twice as many as are covered by the next largest program, operated by Minnesota. The coverage is financed by a surcharge on all health insurers and by premiums charged to families on a sliding scale according to their ability to pay. The biggest change in coverage is the addition of hospitalization to the benefit package. Many long-time supporters of Child Health Plus, while not actively opposing the inclusion of a hospitalization benefit, are very concerned that the higher premiums will discourage new families from signing up and could push some who now are covered out of the program. Families with incomes between 120% and 160% of the federal poverty level will now go from paying no premium to a maximum of $36 per month ($19,260-$25,616 annually for a family of four). Those with incomes above 160% of poverty will see their premiums rise 400% or more. Children in families earning less than 120% of the poverty level will continue to receive coverage for free.
Among those expressing concern are Assembly Health Committee Chairman Richard Gottfried, who coauthored the original legislation creating the program in 1990.
"We deliberately made a choice then to exclude inpatient care in order to keep the premiums nominal and encourage the broadest possible signup," Rep. Gottfried said. "We also understood that for children inpatient care is rarely needed."
Hospital care for uninsured children and adults is paid for out of the "bad debt and charity pool" collected through surcharges on insurers and other payers. But, in many cases, the hospitals lose money, because the pool payments generally are for less than the full cost.
Consumer and anti-poverty groups advocated unsuccessfully for other alternatives to a hospitalization benefit, mainly expanding the benefits package to include dental care and offering families the option of buying a cheaper, basic plan without hospitalization. But, the state chose not to do so.
"We absolutely looked at it," said state Health Department spokesman Robert Hinckley when asked about the possibility that higher premiums would discourage families from signing up or staying with the program. "It was our position that families face a tremendous uncertainty and fear as to what they’re going to do when they’re uninsured and underinsured and suddenly faced with having a child who needs hospital care. The small increase (in premiums) is more than offset by the peace of mind this gives them."
There isn’t much data from other states by which to judge the impact of such expanded benefits or increased premiums, because most of the programs have existed for such short periods of time they haven’t dealt with those issues. New York has the second oldest child health insurance program in the country. The only longer-standing one is in Minnesota - the state after which New York modeled Child Health Plus.
But Minnesota has always included hospital coverage, according to Lynn Blewett, director of health economics for the state Department of Health. Even with the latest increase, New York’s premiums will compare quite favorably with what Minnesotans pay. A family of four, with two children, earning $20,000 annually, for example, will see their Child Health Plus payment rise from zero to $18 a month. A similar family in Minnesota pays $35 a month.
Minn. covers bigger percentage
While the Minnesota program covers a greater percentage of the total number of uninsured children in the state than New York’s does (slightly more than 40%, versus just under 20% in Child Health Plus), Ms. Blewett acknowledged that a survey conducted a couple of years ago found the premium levels to be a continuing
problem.
"When families were asked why they didn’t sign up, the cost was the number one reason," Ms. Blewett said.
Another state program, touted recently by President Clinton, is Florida’s Healthy Kids. In the five years since it was created, Healthy Kids has signed up the families of nearly 40,000 children, according to Jennifer Lloyd, contractor manager for the Florida Healthy Kids Corporation. That represents 6% of the estimated number of uninsured kids in the state. Because the program’s funding varies widely from county to county (it’s offered in 17 of Florida’s 67 counties), there’s no statewide price for premiums, although it does have a standard benefits package including hospitalization.
Generally, Ms. Lloyd said, families of children who qualify for free school lunches (roughly equivalent to the cut-off point in New York) pay about $10 per child per month. Those who qualify for reduced-cost school lunches pay about $25 per child per month.
Other states have held down both premiums and the cost to taxpayers by limiting benefits. Massachusetts, for example, requires no contribution from families earning less than 200% of the poverty level, but its benefits package offers no inpatient coverage.
In contrast, New York’s program will test whether families are willing to pay substantial premium increases for expanded benefits. To promote participation, the state has laid out $500,000 for a
marketing campaign.
A big chunk of any money the state might recoup from a settlement of the tobacco lawsuits filed by state attorneys general around the country (including New York), or from any federal program to expand child health insurance, will be put into Child Health Plus, Mr. Hinckley said.
"We hope to achieve universal health insurance for the children of the working poor, or at least as close to that as we could reasonably come, by aggressively expanding Child Health Plus," he added.
But Rep. Gottfried, whose proposal to increase the state’s cigarette tax by 5 cents a pack to pay for expansion of the program was blocked by the administration of Gov. George Pataki, warned that the Legislature won’t sit back if higher costs affect the program.
"We’ll be watching very carefully to see if the premium increase becomes a prominent obstacle to enrollment," he said.
—Harvy Lipman
Contact Ms. Blewett at 612-282-6361; Mr. Gottfried at 518-455-4941; Mr. Hinckley at 518-474-7354; and Ms. Lloyd at 904-224-5437.
NY tests limits of benefit package and affordability as it aims to double size of childrens insurance plan
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