Resource Information from Families USA
April 27, 1998

Good Ideas from State Plans: State Child Health Plans Provisions That Can Benefit Children

This document was originally prepared as a resource for a national audioconference held on April 3, 1998 that highlighted positive approaches taken by states in their Title XXI/State Children's Health Insurance Program plans. The organizations co-sponsoring the audioconference contributed to the development of this document: Center on Budget and Policy Priorities; Children's Defense Fund; Families USA; Family Voices; National Association of Child Advocates; and National Association of Children's Hospitals. The document was compiled by the National Association of Child Advocates.Hard copies are available from NACA, 1522 K Street, NW, Suite 600, Washington, DC, 202/289-0777, ext. 200, FAX 202/289-0776, e-mail NACA@childadvocacy.org . This version was revised by Families USA, May 6, 1998.
The enactment of Title XXI of the Social Security Act, the new State Children's Health Insurance Program (CHIP), is the largest step forward for children's health since the enactment of the Medicaid program in 1965. CHIP has the potential to provide access to health care for millions of uninsured children nationwide. However, the extent to which this potential is realized depends largely on the choices made by states. In developing their CHIP programs, states have control over a wide range of policy decisions. Across the country, governors and state legislatures are making decisions about eligibility criteria, benefit packages, cost-sharing requirements, outreach and enrollment, delivery systems, and many other aspects of their programs. These decisions will dramatically affect children's access to the programs and the services that children covered by these programs receive.As of April 24, 1998, 26 states had submitted state child health plans to the federal government for approval. Of these, nine have already received federal approval and are moving to implement their CHIP programs. Other states are developing their plans for submission to the federal government later this year. While no state has developed the "perfect plan," many states have made commitments to policies that will greatly benefit children. In other cases, states have taken steps to minimize the harmful impact of some policy choices on children's access to coverage.This documents highlights many of the positive decisions made by states. The organizations that contributed to the preparation of this document recognize that the ideas presented here may not be appropriate in every state or in every situation. Also, many of these good ideas have not yet been implemented; implementation of the ideas may prove more difficult than the states proposing them envisioned. However, we hope that sharing information about positive approaches will help advocates nationwide identify ways to improve their state's child health plan. The document presents information in the following categories.
Eligibility
Benefit packages and access to care
Cost-sharing
Outreach and enrollment
Coordination with Medicaid
Addressing concerns about crowd out
Family coverage

For each positive approach highlighted, the document identifies one or more states implementing or proposing to implement that approach, briefly describes the policy decision made by the state(s), and provides, in many cases, relevant language from state child health plans or authorizing legislation to provide a model for advocates in other states. (Note: the states identified as implementing or proposing the approaches described in this document may not be an exhaustive list of all states pursuing a particular approach.)

IDEAS PRESENTED DURING THE NATIONAL AUDIOCONFERENCE
"GOOD IDEAS FROM STATE PLANS" ON APRIL 3, 1998The following ideas were discussed during the April 3rd audioconference, "Good Ideas from State Plans." These ideas, and others, are described more fully in this resource document.

Eligibility

Using generous methodologies to calculate family income as a way of covering more uninsured childrenGiving the plan administrator the authority to adjust eligibility levels based on expected enrollment and expendituresProtecting the access of lower income children to separate state programs with enrollment caps, if enrollment exceeds expected levelsUsing benefit determinations that have been made for other programs to streamline eligibility determinations for the CHIP programExpanding Medicaid to provide supplemental coverage to underinsured children

Benefit packages and access to care

Developing separate state programs that offer Medicaid "look alike" benefit packagesMeeting the needs of children with special health care needs by offering supplemental benefitsRequiring managed care plans to contract with school-based health clinics

Cost sharing

Allowing families to choose between premiums and copaymentsRequiring managed care plans to track cost sharing for families with incomes over 150 percent of poverty as a way of enforcing limits on cost-sharingSetting an affordable family cap on cost-sharing that ensures compliance with cost-sharing limits for familiesDefining well-baby/well-child care broadly to exempt a wide range of services from cost sharingPreventing disenrollments for non-payment of premiums by allowing families adequate "grace periods" and reminding them when premiums payments are late

Outreach and Coordination

Easing enrollment of children in the CHIP program based on eligibility for other means-tested programsProviding financial support to community-based organizations that assist with outreach and enrollmentMaking the distinctions between Medicaid and the separate state program "invisible" to families

Addressing concerns about crowd out

Providing broad exemptions from waiting periodsExempting lower income families from the waiting period if purchasing coverage is unaffordablePlacing some of the responsibility for preventing crowd out on employersConditioning implementation of more harmful crowd out provisions on evidence that crowd out is occurring

Family coverage

Using other funding streams to provide coverage for parents and coordinating this coverage with Title XXI coverage for childrenProviding family coverage through Title XXI that is cost-effective relative to the cost of covering only the children

ELIGIBILITY

Title XXI allows states to cover children with family incomes up to 200 percent of the poverty level or 50 percentage points above the state's current Medicaid eligibility level for children, whichever is higher. States also have the option of using generous methodologies for determining family income. Some of the ways that states are exercising their flexibility regarding eligibility are described below.
Using generous methodologies to calculate family income as a way of covering more uninsured children — Connecticut and VermontConnecticut and Vermont are proposing to use generous methodologies to calculate family income for the purposes of determining a child's eligibility for their Title XXI programs. In Connecticut, for example, the state is expanding eligibility for its CHIP program, called the HUSKY Plan, to children with family incomes up to 300 percent of the poverty level by exercising its option to disregard a portion of family income for the purposes of determining eligibility. Connecticut will create an income disregard that will bring a family's net income down to 200 percent of the poverty level, the level permitted under CHIP. Vermont is adopting a similar approach. This may be a particularly attractive option for states that may otherwise encounter difficulty in using their full federal allotments. States implementing this option may also want to target outreach to lower income children, to ensure that these children are enrolled in the program.
Using a higher income ceiling for continuing eligibility than for initial eligibility — WisconsinWisconsin is proposing to use a higher income eligibility ceiling for continuing eligibility than for initial eligibility determinations. This protects children from losing coverage if their families have a modest rise in income after they enroll. Wisconsin is using 185 percent of the poverty level as the income ceiling for initial eligibility determinations and 200 percent of the poverty level as the ceiling for continuing eligibility. (But states at 200 percent of poverty for initial eligibility determinations could go higher than that for continuing eligibility, because states have the option under CHIP to define what counts as income and have the option under Medicaid to use income disregards and deductions to expand coverage, see above.)

Giving the plan administrator the authority to adjust eligibility levels based on expected enrollment and expenditures -- MaineLegislation developed by the Maine Commission on Children's Health Care expands Medicaid to children with family incomes below 150 percent of poverty and establishes a separate, but very similar, state insurance program for children between 150 and 185 percent of poverty. This legislation for Maine's CHIP program, Cub Care, directs the Commissioner of Human Services to increase the income eligibility level for the program (set initially at 185 percent of the poverty level) if it appears that expenditures will fall below the amount appropriated for the program. (A caveat: Maine's legislation also directs the Commissioner to decrease the income eligibility level if it appears that program expenditures are likely to exceed the amount appropriated. The harmful impact of this on children is mitigated by Maine's decision to provide six months of guaranteed eligibility. States can choose to offer even longer periods of guaranteed eligibility.) The following is the relevant language from the legislation developed by the Maine Commission on Children's Health Care.§3174-R(2)(B) If the commissioner has determined the fiscal status of the Cub Care program under subsection 8 and has determined that an adjustment in the maximum eligibility level is required under this paragraph, the commissioner shall adjust the maximum eligibility level in accordance with the requirements of this paragraph.(1) The adjustment must accomplish the purposes of the Cub Care program set forth in subsection 1.(2) If program expenditures are reasonably anticipated to exceed the program budget, the commissioner shall adjust the maximum eligibility level set in paragraph A downward to the extent necessary to bring the program within the program budget.(3) If program expenditures are reasonably anticipated to fall below the program budget, the commissioner shall adjust the maximum eligibility level set in paragraph A upward to the extent necessary to provide coverage to as many children as possible within the fiscal constraints of the program budget.(4) The commissioner must give at least 30 days notice of the proposed change in maximum eligibility level to the joint standing committees having jurisdiction over appropriations and financial affairs and health and human services matters.

Protecting the access of lower income children to separate state programs with capped enrollment, if enrollment exceeds expected levels — ConnecticutIn states developing separate state programs with capped enrollments, it may be desirable to include provisions that protect lower income children if enrollment exceeds expected levels and it becomes necessary to put children on waiting lists. Connecticut's legislation requires the Commissioner of Social Services to submit quarterly reports to the Governor and the Legislature analyzing enrollment levels in the non-Medicaid portion of the expansion (HUSKY Plan Part B) relative to available state and federal funds. If it becomes necessary to curtail enrollment to ensure that state expenditures do not exceed the amount appropriated, priority for coverage is to be given to children in families with incomes below 235 percent of the federal poverty level. (Connecticut's HUSKY Plan Part B will cover children up to 300 percent of the federal poverty level). (See, Public Act 97-1, section 10(f).)

Requiring the state to make timely eligibility determinations — CaliforniaCalifornia has made a commitment to making timely eligibility determinations for its Healthy Families program, a separate state program that will cover children with family incomes up to 200 percent of poverty. The state child health plan commits the Healthy Families program to making eligibility determinations with a ten day timeframe (if an application is complete), with coverage to start ten days after an application has been determined to be complete. The following is the relevant language from California's State child health plan.(California state child health plan, pg. 25) Parents will indicate on the application whether they are seeking enrollment in the purchasing pool or subsidized coverage through their employer using a purchasing credit. The administrative vendor will review the application within a 10 day time frame and either return it to the applicant for additional information, enroll the child(ren) in a purchasing pool health plan or enroll the child(ren) in coverage available through the employer. Coverage under the purchasing pool plan will begin 10 days after the application has been determined complete. Coverage under the employer-sponsored plan will begin consistent with the terms of that plan, however, state law provides that children eligible for purchasing credits can not be treated as "late enrollees."
Using eligibility determinations made for other programs to streamline eligibility determinations for the CHIP program — ColoradoColorado's plan for Child Health Plan Plus (CHP+) will minimize paperwork for families applying for children's health insurance by providing for "easy enrollment" of children who are eligible for other state assistance programs (Colorado's Indigent Care Program, Free and Reduced Price Meals Program, Commodity Supplemental Foods Program, WIC, or the Health Care Program for Children with Special Needs). Parents of these children will be able to apply for CHP+ using special short forms, with income verification obtained directly from the Colorado state agencies administering these other state programs. The following is the relevant language from Colorado's state child health plan.(Colorado State child health plan, page 22) The CCHP administration uses one of four methods for determining an applicant's income to establish current financial status. . . . Method IV: For children whose families are enrolled in any one of six other state assistance programs, the CHP+ will enroll these Medicaid-ineligible children in the plan using "easy enrollment" procedures. Application for the CHP+ thus can be made on one of three short applications. Verification of income reported on short forms is obtained directly from the plan's sister agencies. This income verification determines both program eligibility and family cost-sharing requirements. 1) The yellow short form is made available to families who have enrolled in the Colorado Indigent Care Program (CICP) through one of the state's "safety net" providers. Since the eligibility guidelines for the CHP+ are identical to those used by the CICP, children enrolled using this short application immediately receive the same letter rating as that assigned to the family at the decentralized eligibility site for the CICP. 2) The green short form is made available to families with at least one child enrolled in the state's Free and Reduced Price Meals Program. Children who receive Reduced-Price meals are automatically eligible for the CHP+ because their families' income is, by definition, between 130% and 185% of the Federal Poverty Level. Children who receive Free Meals are screened for Medicaid eligibility before they are enrolled in the CHP+. 3) The purple short form is made available to families with at least one family member enrolled in either the Commodity Supplemental Foods Program, the Special Nutritional Program for Women, Infants, and Children, or the Health Care Program for Children with Special Needs. Each of these programs has a family income ceiling of 185% of the Federal Poverty Level. In each case, applying children are screened for Medicaid eligibility before they are enrolled in the CHP+.

Expanding Medicaid to provide supplemental coverage to underinsured children — OhioAt the same time that Ohio is expanding its Medicaid program to cover uninsured children (up to 150 percent of poverty), the state is also making sure that underinsured children at these income levels have access to the health care they need by including a Medicaid expansion for these children, too. Although states cannot claim an enhanced match for Medicaid expenses for the underinsured children, they can receive federal reimbursement at the regular Medicaid matching rate. The following is the relevant language from Ohio's State child health plan.The state is submitting an additional Medicaid State Plan Amendment, 97-028, to co-exist with 97-029, so that children who do not meet the definition of ?optional targeted low-income children' can still be found Medicaid eligible through the second State Plan Amendment. The 97-028 Medicaid State Plan Amendment, as authorized by 1903 (accelerated SOBRA) and 1902(r)(2), will allow the state to provide Medicaid coverage to children who meet the income requirements but who have creditable coverage.
Allowing families above income thresholds to buy into the CHIP program by paying the full premiumMany states developing separate children's health insurance program allow families above the income eligibility threshold to enroll their children in the program by paying the full premium, if they don't have access to other group coverage for their children. These buy-in programs recognize that most moderate-income working families cannot afford the cost of insurance in the individual market. They also recognize that few insurers offer child-only policies. By making participation in the state program possible, these programs make the cost benefits of child-only group coverage available to these families (although affordability may remain a problem for families, particularly those just above the income levels for subsidized coverage). States with buy-in mechanisms for their separate state program include: Colorado (families above 185 percent of the poverty level), Connecticut (families above 300 percent of the poverty level); Florida (families above 185 percent of the poverty level); and New York (families above 222 percent of the poverty level). In addition, Minnesota and Tennessee allow families to buy into MinnesotaCare and TennCare, the states' Section 1115 waiver programs.

Covering legal immigrant children who entered the U.S. after 8/22/96 in state Medicaid programsWhile states cannot use federal CHIP funds to provide coverage to most legal immigrant children who arrived on or after August 22, 1996 during their first five years in the country, they can use state funds to serve these children. In implementing changes to state Medicaid programs required by the 1996 welfare law, eleven states decided to use their own funds to provide health coverage to immigrants who can no longer be served with federal Medicaid funds, including immigrants who arrived on or after August 22, 1996 and/or immigrants who are classified as PRUCOLs and thus no longer qualify for regular Medicaid coverage regardless of their date of entry. These states are California, Connecticut, Kansas, Maine, Michigan, Massachusetts, Minnesota, Nebraska, Vermont, Washington, and Wisconsin. In addition, Maryland and Rhode Island have explicitly elected to cover children and pregnant women. In some cases, immigrant children covered by state funds are subject to special requirements, including residency and deeming requirements and one state (Massachusetts) places limits on long-term care services.
Establishing presumptive eligibility procedures that ensure immediate coverage for children while they navigate the formal applicationMany states are exercising their option to establish presumptive eligibility procedures for their Medicaid program, their separate state programs, or both. For example, Massachusetts' state child health plan indicates that Massachusetts will provide presumptive eligibility for up to 60 days while a child's application is completed and processed. A child can be found presumptively eligible for the Medicaid program based on the household's self-declaration of gross income. A similar process will be used to establish presumptive eligibility for children who appear eligible for the state's separate state program, although they also need to be without health insurance at the time of application to qualify. Similarly, New York's state child health plan indicates that New York will offer a 60-day presumptive period of eligibility to applicant children when they appear to be eligible for the program, but they are lacking pertinent documentation. These procedures will ensure that children receive the medical treatment they need, when they need it.

Providing 12-month continuous eligibility for children enrolled in Medicaid or separate state programsMany states are providing continuous eligibility of up to 12 months for children who enroll in Medicaid or separate state programs, regardless of changes in family income during that period. This reduces administrative costs for the state and managed care plans, and also promotes continuity of care for children.

BENEFIT PACKAGES AND ACCESS TO CARE

States developing separate state programs under Title XXI have flexibility in designing the benefit packages. The Title XXI legislation establishes minimum requirements for state benefit packages: a state must provide the same benefits as one of three benchmark plans or a benefit package that is the actuarial equivalent of one of the benchmark plans and must also cover basic services (inpatient & outpatient hospital care, physician surgical and medical services, laboratory and x-ray services, and well-baby/well-child care including immunizations). However, these requirements are "floors" rather than "ceilings" and states are free to design benefit packages that are more comprehensive than these packages. The decisions states make about benefit packages are important for all children who will enroll in state CHIP programs, but are of special concern for children with special health care needs. The following ideas can help ensure that children enrolled in state CHIP programs have access to the health services they need.

Developing separate state programs that offer Medicaid "look-alike" benefit packages — GeorgiaSome states developing separate state programs are offering benefit packages that are Medicaid "look alikes," as a way of implementing a non-entitlement approach that builds on the existing infrastructure of the state's Medicaid program. Georgia is one state that is pursuing this approach. Georgia's separate state program, which will cover children with family incomes up to 200 percent of poverty, will offer the full Medicaid benefit package, with two exceptions: the state has opted not to cover some case management services or non- emergency transportation (based on an assumption that the parents of children eligible for this program are more likely to own automobiles). This approach avoids the political issues associated with expansion of an entitlement program, but retains the fiscal advantages of building on the Medicaid program's administrative structures, assures continuity for children who transition between coverage programs, and provides a comprehensive benefit package that is tailored to meet the health and developmental needs of children.
Meeting the needs of children with special health needs by offering supplemental benefits — ConnecticutTo ensure that children with special health care needs have access to the service they need, Connecticut is taking a two-tier approach to benefits in its separate state program, the HUSKY Plan Part B. Although the standard benefit package that will be available to children enrolled in the HUSKY Plan Part B is fairly comprehensive, it does include limits on some services important to children with special health needs, e.g., mental health and substance abuse services, long-term rehabilitation, and physical therapy. To ensure that all enrolled children receive the care they need, Connecticut will develop two supplemental coverage programs, called HUSKY Plus programs. One program will mirror the state's Title V Children with Special Health Needs Program and will serve children with intensive physical health needs. The other program will develop a behavioral managed care system for children with intensive behavioral health needs. The following is the relevant language from Connecticut's CHIP legislation.Public Act 97-1, Section 6

(a) The commissioner shall, within available appropriations, establish two supplemental health insurance programs, to be known as HUSKY Plus programs, for enrollees of the HUSKY Plan, Part B, whose medical needs cannot be accommodated within the basic benefit package offered enrollees. One program shall supplement coverage for those medically eligible enrollees with intensive physical health needs and one shall supplement coverage for those medically eligible enrollees with intensive behavioral health needs.

(b) Within available appropriations, the commissioner shall contract with entities to administer and operate the HUSKY Plus program for medically eligible enrollees with intensive physical health needs. Such entities shall be the same entities that the Department of Public Health contracts with to administer and operate the program under Title V of the Social Security Act. The advisory committee established by the Department shall be the steering committee for such program, except that such committee shall include representatives of the Departments of Social Services and Children and Families.

(c) Within available appropriations, the commissioner shall contract with one or more entities to operate the HUSKY Plus program for medically eligible enrollees with intensive behavioral health needs. The steering committee for such program shall be established by the commissioner, in consultation with the Commissioner of Children and Families. The steering committee shall include representatives of the Departments of Social Services and Children and Families.

(d) The acuity standards or diagnostic eligibility criteria, or both, the service benefits package and the provider network for the HUSKY Plus program for intensive physical health needs shall be consistent with that of Title V of the Social Security Act. Such service benefit package shall include powered wheelchairs.

(e) The steering committee for intensive behavioral health needs shall submit recommendations to the commissioner for acuity standards or diagnostic eligibility criteria, or both, for admission to the program for intensive behavioral health needs as well as a service benefits package. The criteria shall reflect the severity of psychiatric or substance abuse symptoms, the level of functional impairment secondary to symptoms and the intensity of service needs. The network of community-based providers in the program shall include the services generally provided by child guidance clinics, family service agencies, youth service bureaus and other community-based organizations.

Assuring continuity of care for children who transition between coverage programs if programs use different health plans or providers — Michigan and ColoradoThe state child health plans from Michigan and Colorado take special steps to ensure continuity of care for children whose eligibility for coverage shifts between Medicaid and the separate state program. These policies show a concern for continuity of care for all children, including those with special health care needs, and will also facilitate good coordination between coverage programs. In Michigan (where Medicaid will cover children with family incomes under 150 percent of poverty and the new MIChild program will cover children with family between 150 and 200 percent of poverty), the state's proposed legislation allows children transitioning from one program to the other to keep the same health care provider during a current prescribed course of treatment for up to one year if the child has a serious medical condition and is undergoing active treatment for that condition. (See House Bill No. 5532, section 209.).Colorado has taken a slightly different approach, one that prevents children who become eligible for Medicaid from having to switch providers to gain access to Medicaid's more comprehensive benefit package. A child who switches from the Colorado Child Health Plan to Medicaid during the contract year must be treated as a Medicaid patient by Colorado Child Health Plan providers. If a child has to switch programs due to changes in family income, that child will be able to keep seeing the same doctor, at least until the end of the year.States can also opt to contract with the same plans and providers for their CHIP programs as they do for their Medicaid programs. See page 14 for a description of states opting to use this approach to ensure coordination between programs.

Requiring managed care organizations to coordinate out-of-plan services for children with special health care needs — Rhode IslandRhode Island's Section 1115 program, RIteCare, requires the managed care plans that serve RiteCare enrollees to coordinate services for children with special health care needs, including services provided by providers and organizations outside the managed care plan's network.
Using a broad definition of "special health care needs" to ensure that children have access to the health care they need — ConnecticutConnecticut's HUSKY Plus program serving children with intensive physical health needs will mirror the state's Title V Children with Special Health Needs Program, including the use of the Title V program's definition of children who have special health care needs. Because the HUSKY Plus program will also use the state's network of Title V providers, the infusion of new federal and state funds is allowing the state to expand its definition of special health care needs to encompass additional children. The state has based its new definition on the federal definition for the Title V program, and includes children "who have or are at increased risk for chronic physical or developmental conditions and who require health and related services of a type or amount beyond that required by children generally."

Using Title XXI funds to improve access to care — MaineThe proposed legislation developed by the Maine Health Care Commission on Children's Health Care sets aside three percent of child health funding to improve access to health care. Among other things, the Commission recommended using these funds to purchase dental chairs in rural areas, a step designed to increase the participation of pediatric dentists in the program by making it easier for them to provide care to children.
Requiring managed care plans to contract with school-based health centers — MichiganRequiring managed care plans to include school-based health centers in their provider networks ensures that children have access to the health services provided by these clinics and also ensures that clinics can receive reimbursement for services provided to children enrolled in Medicaid or in separate state programs. States that require managed care organizations serving school-age Medicaid populations to structure relationships with school-based health centers include New York, Delaware, Connecticut, Rhode Island, Maryland, Massachusetts, and Vermont. Where these states are using Title XXI funds to expand their Medicaid programs (Rhode Island, Maryland, and Vermont), school-based health center services will be available to children in the expansion populations. Among states using Title XXI funds to develop separate state programs, Michigan has opted to require managed care plans participating in its MIChild program to contract with school-based health clinics.

COST-SHARING

Title XXI sets some limits on premiums and cost-sharing for families whose children are enrolled in state CHIP programs. For children with family incomes at or below 150 percent of poverty, states are prohibited from charging more than $15-19 a month for premiums and more than a nominal amount for co-payments and deductibles. For children with family incomes above 150 of poverty, total payments for all children in a family (including premiums and co-payments or other cost-sharing) cannot exceed five percent of family income. (Note: states using Title XXI funds to expand their Medicaid programs are subject to Medicaid's prohibitions on cost-sharing for children.) Some of the "family-friendly" ways that states are approaching cost-sharing in their CHIP programs are described below.

Allowing families to choose between premiums and co-payments — Rhode IslandRhode Island's RIteCare program gives families a choice for meeting the program's cost-sharing requirements. Families can pay monthly premiums or co-payments for the health services they use that are subject to co- payments. This allows families to choose what works best for them: some families may prefer the predictability of premiums, while others may prefer paying only for the services their children use. For this approach to work as intended, families need to receive information about the pros and cons of premiums vs. co-payments, so that they can make informed choices.

Requiring managed care plans to track cost-sharing for families with incomes over 150 percent of poverty as a way of enforcing limits on cost sharing — Connecticut and MichiganConnecticut and Michigan are placing responsibility on managed care plans to track cost-sharing for families with incomes over 150 percent of poverty, to ensure that total cost-sharing does not exceed 5 percent of annual income, the limit established by the federal Title XXI statute. Connecticut's legislation sets an annual dollar limit on cost sharing for families and will direct the Commissioner of Social Services to require each managed care plan to monitor copayments and premiums to assure that these limits are enforced. Although Michigan's State child health plan does not cap cost-sharing for families, it establishes a schedule of co-payments for various services and requires managed care plans to track families' cost-sharing to ensure that it does not exceed five percent of income. In contrast, some states are placing the responsibility for tracking total cost sharing on families, making it more difficult to assure compliance with federal and state limits on cost sharing for families.
Setting an affordable family cap on cost sharing that ensures compliance with cost-sharing limits for families - CaliforniaCalifornia's Healthy Families program establishes a $250 per year per family cap on cost sharing (not including the cost of monthly premiums). This annual limit on cost sharing, coupled with the Healthy Families premiums set in the state legislation, ensures that total cost sharing for all families will stay below the five percent of income limit established by the federal Title XXI statute for families with incomes over 150 percent of poverty.
Defining well-baby/well-child care broadly to exempt a wide range of services from cost-sharing — Georgia, New Jersey, and ConnecticutThe federal Title XXI statute exempts well-baby/well-child care from cost-sharing, but does not define these terms. Some states have defined these terms broadly, to exempt a wide range of preventive services from cost- sharing and thus encourage families to use these services. For example, Georgia includes in its definition all medically necessary maintenance medication and monitoring associated with chronic conditions, such as asthma and diabetes. New Jersey exempts preventive dental care and family planning services from cost sharing, while Connecticut exempts services for which inappropriate use is unlikely. These policies will be especially beneficial for families of children with special health needs, who may require more services.

Preventing disenrollments due to failure to pay premiums by allowing families adequate "grace periods" and reminding them when premium payments are late — MaineThe legislation establishing Maine's Cub Care program establishes procedures that must be followed when premiums are not paid on time. For example, if a family fails to pay the premium for an enrolled child, they must be sent reminder notices (a first one when the premium is missed and a second one a month before the end of the enrollment period, if necessary) before a child can be disenrolled. In addition, the legislation establishes a grace period that will allow a child to stay enrolled until the end of the Cub Care's six-month enrollment period (and two weeks beyond that if the premium missed is for the last month of the six-month enrollment period). Finally, families have the right to request a hearing to dispute whether they have failed to pay premiums or have been charged appropriately. The state can also waive premiums for "good cause." The following is the relevant language from Maine's proposed legislation.

Section 3174-R (5)(B) When a premium is not paid at the beginning of a month, the department shall give notice of nonpayment at that time and again at the beginning of the 6th month of the 6-month enrollment period if the premium is still unpaid, and the department shall provide an opportunity for a hearing and a grace period in which the premium may be paid and no penalty will apply for the late payment. If a premium is not paid by the end of the grace period, coverage must be terminated unless the department has determined that waiver of premium is appropriate under paragraph D. The grace period is determined according to this paragraph. (1) If nonpayment is for the first, 2nd, 3rd, 4th, or 5th month of the 6-month enrollment period, the grace period is equal to the remainder of the 6-month enrollment period. (2) If nonpayment is for the 6th month of the 6-month enrollment period, the grace period is equal to 6 weeks.C. A child whose coverage under the Cub Care program has been terminated for nonpayment of premium and who has received coverage for a month or longer without premium payment may not reenroll until after a waiting period that equals the number of months of coverage under the Cub Care program without premium payment, not to exceed 3 months.D. The department shall adopt rules allowing waiver of premiums for good cause.

OUTREACH AND ENROLLMENT

States can use some of their Title XXI funds for outreach to get children enrolled in the program. Title XXI expenditures for this purpose, combined with the amount states spend on administration and health services initiatives for low-income children, cannot exceed 10 percent of the funds spent on insurance, unless the state receives a waiver of this limit. Many states are planning comprehensive outreach initiatives to enroll eligible children into Medicaid and state CHIP programs. Many are also shortening their applications, reducing verification requirements, and simplifying enrollment procedures. In addition, some states have incorporated unusual or innovative outreach strategies into their state child health plans. Several of these approaches are described below.

Providing financial incentives to organizations and individuals that help families enroll — CaliforniaCalifornia's Healthy Families legislation includes a plan to provide financial incentives, in the form of a $25 "application assistance fee," to entities and individuals that help families enroll in the Healthy Families program or in MediCal, California's Medicaid program. The following is the relevant language from California's state child health plan.(California's state child health plan, page 34) In addition to pre-enrollment, MRMIB may also provide a $50 one-time application assistance fee for entities and individuals that assist beneficiaries applying for the Healthy Families programs. MRMIB successfully uses an application assistance fee in two of its existing programs, MRMIP and AIM. The purpose of the fee is to provide an outcomes based financial incentive to organization/person who come into regular contact with the target population. Use of the application assistance fee is particularly important as it is a way by which MRMIB creates an incentive for insurance agents and brokers to participate in enrollment outreach. Agents and brokers are the primary means by which coverage is sold to small employers for whom most of the uninsured work. Traditionally, insurers pay commissions of 6-10% on a monthly basis for agent broker assistance. Use of a one time flat fee is a cost effective way to involve agents and brokers in outreach for the program.

MRMIB will pay the application assistance fee only for those beneficiaries who are successfully enrolled into the insurance program. Such entities, which have yet to be certified by MRMIB, are broadly defined as groups which have potential outreach capabilities to educate and enroll targeted applicants into the Healthy Families program. They include, but are not limited to, Parent Teacher associations, insurance agents and brokers, WIC clinics, community clinics, and county welfare departments. MRMIB certifies entities and individuals who are able to collect the application assistance fee, to ensure proper oversight of the efforts and avoid potential marketing abuses associated with the fee. Providing a $50 assistance fee will give entities an incentive to inform, educate, and help enroll all potential beneficiaries.
Easing enrollment of children in the CHIP program based on eligibility for other means-tested programs — ColoradoAs noted above, Colorado is taking special steps to ease the enrollment process for children whose families qualify for means-tested child nutrition programs. If one child in a family qualifies for certain programs, such as the state's Free and Reduced Price Meals program or WIC, all children in the family can be enrolled in the Colorado Health Plan (CHP+) using special short application forms. This procedure will reduce confusion and the paperwork burden that may arise when families have to navigate numerous application processes.

Allowing applications over the Internet — ColoradoColorado will make its application forms available on the Internet so families can fill out the application on- line. Although many of the families targeted by state CHIP programs may not have access to a computer in their homes, the availability of applications on the Internet could be particularly useful for community-based organizations assisting families with enrollment. The Health Care Financing Administration had some initial concerns about confidentiality of information transmitted over the Internet based on the Federal Privacy Act, but Colorado was able to show that its safeguards were adequate. (Note: HCFA has also stated that it will be developing criteria for systems design and procedures that would be necessary to satisfy Federal Privacy Act concerns.) The following are the safeguards that Colorado will use to protect information transmitted electronically.Response to HCFA Questions and Comments on the Colorado Health Plan Plus (CHP+) Title XXI State Plan, Section 2.3. A security model must include a clear policy and procedure set for governing the communication with users, for a testing strategy, and for auditing. These components will be addressed individually below.

Communication: All user institutions will sign a statement of intent regarding the appropriate use of the CHP+ system. Each institution will be expected to provide an individual or department that assumes responsibility for the installation and configuration of client systems as well as the dissemination of user passwords. If the local administrator has reason to believe that the password has been revealed to an unauthorized user, he or she will be expected to inform the CHP+ system administrator so that the password may be changed.

Testing: All new application components will be tested rigorously using a pre-designed set of procedures and/or rules. The purpose of this testing is to establish that only authorized users are able to access the system and that a user, once connected, may only gain access to those portions of the server required to run the application.Auditing: Log files will be generated of all accesses made to the system. A procedure will be developed for the systematic review of those log files with the purpose of identifying potential unauthorized use of the system. Any identified infringements will result both in communication with the users and refinement of the security model and testing procedures as necessary to prevent further infringements of the same type.From a technical perspective, Internet access is governed at four levels: Physical, network, transport, and application. Below is our proposal for how security will be implemented at each of the four levels.

Physical: The Internet server would be physically controlled by housing it in a secure location under lock and key, similar to any other centralized computing resource. Access to this location will be restricted to authorized CHP+ employees and their agents.Network: Communication with the system via the network will be controlled by restricting both the sources and the types of communication allowed. In order to restrict communication from unauthorized locations, access control lists will be maintained at the web server, a designated firewall system and/or an intervening router. In addition, the types of communications protocols allowed to enter the system will be carefully monitored and controlled. Only the protocols required to access the system will be allowed. At this time our primary protocol for access is HTTP. Protocols and commands that will be stopped are TElnet, FTP, SMTP, Ping, Finger, Netstat, Echo, and remote login commands such as rsh, rlogin, and rdist.
Transport: To secure the transfer of data across the Internet, the system will incorporate the use of the Secure Sockets Layer (SSL) protocol for encryption and user identification. Because SSL generates a new encryption key for each session, a user who manages to break the SSL encryption of a message will at most gain access to the contents of a single transmission. The encryption algorithm will use a 128-bit key as a minimum. Password and/or encryption will restrict access to the private key required at the server for the implementation of SSL. In addition, all users will be required to install and transmit their own digital certificates from a designated certification agency.

Application: To assure user identification, a login ID and password will be required to gain access to the system. The login ID and password will be specified by our central administration staff. Criteria for formatting the login ID and password will be strictly enforced by security software on the server operating the system. Passwords will be changed regularly by the CHP+ administrator and disseminated via mail or phone to the local system administrator. In addition, server browsing will be disabled so that users may only view and access those files and directories for which they have a valid address.In order to access the system, a user will need a valid certificate from the appropriate certification agency, a valid user name and password combination, and an application capable of communicating through HTTP. Login ID's, passwords, and business data will be encrypted. The communications protocols, source addresses, and destination addresses will be controlled. A policy governing appropriate design and use will be enforced. With this multi-layer security approach, we believe that users will only achieve access to specifically designed applications.

Providing financial support to community-based organizations willing to help with outreach and enrollment — California, Massachusetts, and ColoradoCalifornia and Massachusetts are both planning to provide financial support to community-based organizations that will enable these organizations to assist with state outreach and enrollment efforts. California is currently in the process of identifying a contractor to conduct outreach and enrollment for its separate state program, Healthy Families. The state child health plan indicates that California will require the contractor it hires to allocate a percentage of available funding to support the participation of community-based organizations in the state's outreach efforts. The enrollment/outreach contractor will also be required to document the participation of community-based organizations in outreach efforts. Massachusetts' state child health plan indicates that Massachusetts will give mini-grants of between $10,000 and $15,000 to community-based organizations to assist in enrollment of hard-to-reach individuals and families (e.g., teens, non-English speaking individuals, seasonal workers, and young parents). Colorado's state child health plan also includes a plan to provide financial support to organizations that provide assistance with CHP+ applications.

Utilizing the resources of other state agencies to conduct outreach and enrollment activities — MassachusettsMassachusetts' state's child health plan indicates that it will enlist the staff of other state agencies, including the Department of Public Health, to help families complete applications. These other agencies will then forward completed applications to the Medicaid agency for review. The applications will be annotated with an origination code and then (if the Medicaid agency has entered into an Interagency Service Agreement with the originating agency or the originating agency is acting as an authorized representative) the originating agency will be notified of the eligibility decision. This will allow other state agencies to evaluate the set of medical services available to their clientele and to assess eligibility for other programs, and will allow hospitals to assess the availability of free care. Massachusetts' plan includes "cross-training" of agency staff on health insurance options available to families. Cross-training will reduce administrative barriers to enrollment and assure that families are referred to the appropriate program.

Utilizing networks of community-based organizations to assist with outreach and enrollment activities — IllinoisIllinois' state child health plan indicates an intention to use networks of community-based organizations, such as Head Start and Child Care Resource and Referral networks, to disseminate information about Illinois' Medicaid expansion, which will cover children below 133 percent of poverty, as well as any additional Medicaid expansion or separate state program that the state may implement. This strategy will help ensure that working families receive information about the availability of coverage for their children.

Partnering with counties to maximize federal funds available to support outreach efforts — OhioUnder the welfare law passed in August of 1996, $500 million was set aside to help states with additional costs associated with the delinking of TANF and Medicaid eligibility. This money is available to states in the form of an enhanced matching rate for activities that support the implementation of delinking, including outreach efforts that may help assure families and children do not go without coverage because of the welfare law. Ohio has proposed making some of its share of the $500 million available to its counties. Counties can use the federal funds if they are willing and able to provide the non-federal share of matching funds and to use the money to support Medicaid enrollment for people at risk of losing contact with Medicaid due to the federal delinking from cash assistance. To receive these funds, counties must submit outreach proposals to the state.

Screening applicants for eligibility for a number of programs simultaneously — Ohio is proposing to develop and implement a computer system that will screen applicants for eligibility for a number of public programs. Use of this system will reduce the paperwork required of applicants and will ensure that they are connected with all of the programs and services for which they are eligible.

Using Title XXI funds to finance additional state costs associated with eliminating an asset test — CaliforniaIn its state child health plan, California proposed dropping its asset test when determining the Medicaid eligibility of children. The state will be able to use Title XXI funds at the enhanced match rate for the costs of covering the children who would be enrolled in Medicaid as a result of this change. (A caveat: in order to identify children for whom the state can claim enhanced match, California restored questions about family assets to its application form. Alternative approaches that states could explore to assess the number of children eligible because of the elimination of the asset test include basing an estimate on past state experience or on a sample of children applying under the new rules.)

Following up with families to ensure that they complete the application process — MassachusettsMassachusetts has made a commitment to following up with families who receive information about the state's health coverage programs but do not submit an application. Families who are made aware of their potential eligibility, but who do not complete an application, will be contacted by staff. Staff will take applications over the phone and mail the completed form to the family for signature. After the completed application has been turned in, staff will follow up with the family to ensure that the application process is going smoothly. This shows a commitment to helping families navigate the application process.

COORDINATION BETWEEN MEDICAID AND SEPARATE STATE PROGRAMS

Title XXI requires states to coordinate their CHIP programs with other public and private health insurance programs, including Medicaid. Part of this is a requirement that states develop systems to screen children for Medicaid eligibility and enroll those eligible in the Medicaid program. The coordination requirement also covers Blue Cross Caring Programs and other privately-financed health insurance initiatives, as well as employer-based coverage. States are using a variety of mechanisms to ensure coordination. Some of these are described below.

Making the distinctions between Medicaid and the separate state program "invisible" to families — Connecticut, Oregon, and MaineSeveral states that have elected a combination approach (i.e., a Medicaid expansion for some children and the development/expansion of a separate children's health insurance program for other children) have taken steps to assure that operating two programs does not create undue confusion for families. In general, these states have decided to make the distinction between the two programs largely invisible to families by using a single application for both programs, conducting an outreach program that covers both programs, and assuring that any route to enrollment in the state's separate children's health insurance program can also be used to enroll an eligible child in Medicaid.In Connecticut, for example, the Medicaid program will cover children with incomes up to 185 percent of the federal poverty level, while the separate state program will cover children with incomes between 185 percent and 300 percent of the federal poverty level. Both expansions, however, are considered part of the same HUSKY Plan program: the Medicaid expansion will be called HUSKY Part A and separate state program will be called HUSKY Part B. According to the legislation and the state child health plan submitted to HCFA, the two parts will be run as one program, with a single point of entry, a single application, and one outreach/marketing message. In addition, a private contractor will screen children for eligibility, and, if it makes a preliminary determination that a child is eligible for Medicaid, the contractor will forward the application and supporting documents to the state Medicaid agency for a final determination. The same contractor will make a final determination of eligibility for coverage under HUSKY Part B. (See, Connecticut plan, January 7, 1998, pages 1, 9 , 11; Public Act 97-1, sections 4 (h)- (j).)Oregon has elected to use its Title XXI funds to expand coverage through a Medicaid look-alike program that will cover children with family incomes up to 170 percent of poverty. In its summary of the proposal, the state asserts that "Clients will see no difference between Oregon's Medicaid program and this CHIP program." To accomplish this, the state will: use a single application form and the same eligibility workers for its Medicaid and CHIP programs; give clients the same choice of managed care plans under both programs; provide the same benefits; and incorporate outreach for the new CHIP program into its existing Medicaid outreach campaign.In Maine, the Commission on Children's Health Care recommended expanding Medicaid coverage to 150 percent of poverty for all children over the age of one and establishing a separate state insurance program for children over one with family income between 150 percent and 185 percent of the federal poverty level (although these eligibility thresholds will be adjusted by the state's health commissioner if spending is expected to exceed or fall short of the budget, see page four). While the separate state insurance program contains premium and anti-crowd out provisions that are not applicable to Maine's Medicaid program, the Commission otherwise recommends that the two programs be integrated. The following is the relevant language from the Commission's proposed legislation.§3174-R(3) Program administration; benefit design. With the exception of the premium payments... and any other requirements imposed under this section, the Cub Care program must be integrated with the Medicaid program and administered with it in one administrative structure within the department, with the same enrollment and eligibility process, outreach and benefit package, and in compliance with the same laws and policies as the Medicaid program, except when those laws and policies are inconsistent with this section and the BBA of 97.

Maintaining Medicaid enrollment for a month while children losing Medicaid coverage apply for the CHIP program — CaliforniaThe state's child health plan proposes giving children who lose their Medicaid benefits an extra month of eligibility to give their parents time to apply for coverage under California's separate state program, Healthy Families. (Note: at this point, it is not clear that HCFA will allow the state to use the 12-month continuous eligibility option as the basis for this one month extension, as the state is proposing. The state may be able to accomplish the same goal through other means, e.g., by using the less restrictive methodologies options available under Section 1902(r)(2) and 1931 of the Social Security Act). While this option could prove useful to children who otherwise might face an interruption in coverage, states could more effectively ensure continuity of coverage for children by automatically conducting a determination of whether a child is eligible under the separate state insurance program when a child loses Medicaid coverage.

Developing separate state programs that are Medicaid "look alikes"The development of separate state programs that look like the Medicaid program is another strategy for ensuring coordination between coverage programs. Separate state programs that offer the Medicaid benefit package, use Medicaid enrollment brokers, and contract with Medicaid managed care plans minimize confusion for families seeking to enroll their children and also minimize disruptions when children's eligibility for coverage shifts from one coverage program to another.

ADDRESSING CONCERNS ABOUT CROWD OUT

Even though there is disagreement among experts about the degree to which publicly-financed insurance programs "crowd out" private coverage, states are required to describe in their state child health plans the measures they will adopt to ensure that their new CHIP programs do not provide coverage for children who have private coverage. States are using a variety of mechanisms to address concerns about crowd out and some have designed their crowd out strategies to minimize the harm to children. Some of these approaches are described below.

Providing broad exemptions from waiting periods — ConnecticutThe legislation establishing Connecticut's HUSKY Plan includes a waiting period of six months as a means of addressing concerns about crowd out of employer-sponsored coverage. However, Connecticut's legislation also establishes broad exemptions from the waiting period for children whose parents lose access to employer- sponsored dependent coverage through no fault of their own. The following is the relevant language from Connecticut's statute.Sec. 11(c) An application may be approved in cases where prior employer-sponsored coverage ended less than six months prior to the determination of eligibility for reasons unrelated to the availability of the HUSKY Plan, Part B, including, but not limited to: (1) Loss of employment due to factors other than voluntary termination; (2) Death of a parent; (3) Change to a new employer that does not provide an option for dependent coverage; (4) Change of address so that no employer-sponsored coverage is available; (5) Discontinuation of health benefits to all employees of the applicant's employer; (6) Expiration of the coverage periods established by the Consolidated Omnibus Budget Reconciliation Act of 1985, (P.L. 99-272) as amended from time to time, (COBRA); (7) Self-employment; (8) Termination of health benefits due to a long-term disability; (9) Termination of dependent coverage due to an extreme economic hardship on the part of either the employee or the employer, as determined by the commissioner; or (1) Substantial reduction in either lifetime medical benefits or benefit category available to an employee and dependents under an employer's health care plan.

Exempting lower-income families from the waiting period if purchasing coverage is unaffordable — Maine and ConnecticutMaine and Connecticut have both chosen to exempt lower-income families from waiting periods if purchasing coverage is unaffordable. As described in the statutory language above, Connecticut will exempt a child from that state's six month waiting period if termination of coverage is "due to an extreme economic hardship" on the part of the employee (see statutory language above). In Maine, a child is exempt from the Cub Care program's three-month waiting period if an employer pays less than 50 percent of the cost of dependent coverage or if the employee contribution adds up to more than 10 percent of the employee's income. The Maine legislation also gives the Department of Human Services the ability to grant "good cause" exemptions to the waiting period. The following is the relevant language from Maine's proposed legislation.§3174-R(2)(C) All children resident in the state are eligible except a child who: (1) Is eligible for coverage under the Medicaid program; (2) Is covered under a group health insurance plan or under health insurance, as defined in section 2791 of the federal Public Health Service Act; (3) Is a member of a family that is eligible for health coverage under the State Employee Health Program under Title 5, section 285; (4) Is an inmate in a public institution or a patient in an institution for mental diseases; or (5) Within the 3 months prior to application for coverage under the Cub Care program, was insured or otherwise provided coverage under an employer-based health plan for which the employer paid 50% or more of the cost for the child's coverage, except that this subparagraph does not apply if: (I) The cost to the employee of coverage for the family exceeds 10% of the family's income; (ii) The parent lost coverage for the child because of a change in employment, termination of coverage under COBRA or termination for a reason not in the control of the employee; or (iii) The department has determined that grounds exist for a good cause exception.
Placing some of the responsibility for preventing crowd out on employers — California and Rhode IslandBoth California and Rhode Island take a comprehensive approach to addressing concerns about crowd out, including provisions that prevent employers from shifting some employees' dependents from employer- sponsored coverage onto the public program and thereby shifting the costs from the private sector to government. Federal tax law already forbids employers who self-insure from singling out low-wage workers and reducing health coverage for them or their children. California's legislation included a similar prohibition for all employers, including those not subject to the federal law, as well as other provisions to ensure that employers do not encourage employees to switch to the public program. The following is the relevant language from California's statute.Chapter 11. Protection Against Substitution of Benefits. 12693.80. The board shall use due diligence in the creation of participation standards for the program that minimize the incentive for employers or applicants to drop or reduce dependent health coverage.12693.81. (a) It shall constitute unfair competition for purposes of Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code for an insurer, an insurance agent or broker, or an administrator, as defined in Section 1759, to refer an individual employee or employee's dependent to the program, or arrange for an individual employee or employee's dependent to apply for the program, for the purpose of separating that employee or employee's dependent from group health coverage in connection with the employee's employment. (b) Any employee applicant in subdivision (a) shall have personal right of action to enforce subdivision (a).12693.82 It shall constitute an unfair labor practice contrary to public policy, and enforceable under Section 95 of the Labor Code, for any employer to refer an individual employee or employee's dependent to the program, or to arrange for an individual employee or employee's dependent to apply to the program, for the purpose of separating that employee or employee's dependent from group health coverage provided in connection with the employee's employment.12693.83 (a) It shall constitute an unfair labor practice contrary to public policy and enforceable under Section 95 of the Labor Code for any employer to change the employee-employer share-of-cost ratio based upon the employee's wage base or job classification or to make any modification of coverage for employees and employee's dependents in order that the employees or employee's dependents enroll in the program established pursuant to this part.12693.84 For purposes of Sections 12693.82 and 12693/83, group health coverage includes any group disability insurance policy covering hospital, medical, or surgical expenses, group health care service plan contract, or self-insured employee welfare benefit plan.

Conditioning implementation of more harmful crowd out provisions on evidence that crowd out is occurring — California and FloridaIn addition to providing exemptions from waiting periods and placing responsibility for preventing crowd out on employers, California's legislation also requires evidence that crowd out is occurring before the state can implement more harmful crowd out provisions, which in California's legislation consists of increasing the waiting period from three months to a maximum of six months. The following is the relevant language from California's statute.Chapter 9. Eligibility. 12693.71 (d) If the board determines, based on evidence gathered during a reasonable period of program operation, that a substantial share of funds expended for the program are providing health coverage for children that have discontinued employer-based coverage in order to enter the program or if required by the federal government for state plan approval, the board may take actions to increase the three-month time limit specified in subdivision (b), to such a time limit that cannot exceed six months.

FAMILY COVERAGE

The federal Title XXI statute allows states to use Title XXI funding for family coverage if the state can demonstrate that : (1) family coverage will be cost effective compared to the costs of covering just the eligible children in the family and (2) family coverage won't substitute for private group coverage [Section 2105(c)(3)]. Although there is not consensus within the advocacy community about the use of Title XXI funds for family coverage, some advocates argue that children will benefit from family coverage policies because (1) parents' health status affects children's health status and (2) participation rates are likely to be higher with family coverage. In addition, it can be argued that family coverage will not come at the expense of children in states that are also expanding children's coverage to the fullest extent permitted by Title XXI.Several states are attempting to use Title XXI funding as well as other funding streams to purchase or provide family coverage. In the absence of written guidance from HCFA on the scope of this provision, states are taking different approaches, as described below. It is not yet clear whether HCFA will accept the lines of reasoning about cost-effectiveness of family coverage put forward by these states.

Providing family coverage that is cost-effective — Vermont and WisconsinVermont and Wisconsin are both trying to demonstrate that family coverage is cost-effective in order to offer public insurance coverage to entire families, although the states are taking different approaches to demonstrating cost-effectiveness. Vermont currently has a Section 1115 Medicaid waiver program that covers parents up to 150 percent of poverty. It proposes to expand this coverage to 185 percent of poverty under Title XXI in addition to expanding children's coverage from 225 percent to 275 percent of poverty. The State claims coverage will be cost effective because it will "support families making the transition from welfare to work." Vermont cites an analysis of Minnesota's MinnesotaCare program which found that as of June 1997 there were 4,600 fewer families were receiving AFDC benefits than if there had been no MinnesotaCare. (Minnesota estimated a reduction in its spending on Temporary Assistance to Needy Families of $2.5 million per month.) Vermont notes that its proposed expansion for adults is not at the expense of children, since Vermont is also expanding children's coverage to the highest income level it is permitted under Title XXI.Wisconsin has applied for a Section 1115 Medicaid waiver to cover families in conjunction with a Title XXI expansion. It proposes to cover families up to 185 percent of poverty, with parents earning less than 150 percent of poverty and all children covered by Title XXI, and higher income parents covered by the waiver. It proposes to demonstrate cost effectiveness by comparing the costs of covering an average 3-person family under the state's Medicaid HMO plan to the costs of covering just the children in the state employee health plan. It also cites an as-yet unpublished study by Dr. Kenneth Thorpe of Tulane University to support the claim that participation rates will be higher if the entire family is covered.

Using other funding streams not derived from Title XXI to cover adults in families where children are covered by Title XXI coverage — Michigan and MissouriMichigan and Missouri are seeking to use other funding streams to cover adults in families where children are covered through Title XXI programs. Michigan is expanding a program for former TANF recipients whose 12-month transitional Medicaid benefits have expired. The program (called TMA Plus) provides premium subsidies on a per-person-per-month basis to buy into Medicaid coverage. In fiscal year 1998, it will be available state-wide using state-only dollars. This program won't cover all uninsured parents with children in Medicaid or the state's separate state program, MIChild, but it will cover some of them.Under its 1115 waiver request, Missouri seeks to cover former TANF recipients whose 12-month transitional Medicaid benefits have expired for two more years as long as their income is under 300 percent of poverty; some non-custodial parents with incomes under 100 percent of poverty will also be covered. (Missouri's anticipates using all of its Title XXI allotment to cover children up to 300 percent of poverty.)Oregon recently passed legislation to subsidize insurance premiums for families with incomes under 170 percent of poverty using state funds. Its Title XXI plan says it will coordinate coverage under this program with its children's health insurance plan, which also goes up to 170 percent of poverty.

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