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Affordable cost-sharing (premiums and co-payments) is essential to ensure eligible children are enrolled in appropriate health coverage and actually get the services they need when they need them. Experience in multiple states has shown that requiring premiums discourages low-income parents from enrolling or re-enrolling their children in health plans:
Currently, states set their own income eligibility levels for CHIP and Medicaid under broad federal guidelines. This has resulted in a profoundly inequitable patchwork of eligibility across the United States. To ensure that children’s ability to survive, thrive and learn is not dependent on the lottery of geography or birth, health reform must ensure all children up to 300 percent of the federal poverty level (about $66,000 for a family of four) have cost-sharing protections consistent with current out-of-pocket limits for low-income families.
Families at or below 200 percent of poverty ($42,400 for a family of four) should face no cost-sharing, and families between 200 percent and 300 percent of poverty should face no premiums and only nominal cost-sharing. Additionally, the process for payment of premiums must be simple and convenient and children must not be denied services for inability to make co-payments.
Getting children enrolled and ensuring they maintain their coverage helps prevent unnecessary increases in health care costs for communities. Evidence from state and local programs shows that as children lose coverage, costs resulting from emergency room visits and longer hospital stays increase. For instance, the cost for a child to visit a doctor in the early stages of an asthma attack is about $100, but going to the emergency room to treat full-blown asthma symptoms could lead to a three-day hospital stay costing more than $7,300. Where CHIP enrollments have seen increases, child hospitalizations for preventable illnesses tend to fall, showing us that providing all children with quality health coverage is not only the right thing to do, but the smart and cost-effective thing to do. (3) To learn more about why expanding coverage makes economic sense, check out top facts on the economic advantages of health coverage for all children.
1) Herndon, J. et al., “The Effect of Premium Changes on SCHIP Enrollment Duration,” Health Services Research, 43(2), April 2008.
2) Artiga, S. O’Malley, M., “Increasing Premiums and Cost Sharing in Medicaid and SCHIP: Recent State Experiences,” Kaiser Commission on Medicaid and the Uninsured, May 2005.
3) Bermudez, D. Baker, L., “The Relationship Between SCHIP Enrollment and Hospitalizations for Ambulatory Care Sensitive Conditions in California," Journal of Health Care for the Poor and Underserved, 16, pp. 96-110, 2005.