Insurance Premiums and Insurance Coverage of Near-Poor Children

Abstract

States increasingly are using premiums for near-poor children in their public insurance programs (Medicaid/SCHIP) to limit private insurance crowd-out and constrain program costs. Using national data from four rounds of the Community Tracking Study Household Surveys spanning the seven years from 1996 to 2003, this study estimates a multinomial logistic regression model examining how public and private insurance premiums affect insurance coverage outcomes (Medicaid/SCHIP coverage, private coverage, and no coverage). Higher public premiums are significantly associated with a lower probability of public coverage and higher probabilities of private coverage and uninsurance; higher private premiums are significantly related to a lower probability of private coverage and higher probabilities of public coverage and uninsurance. The results imply that uninsurance rates will rise if both public and private premiums increase, and suggest that states that impose or increase public insurance premiums for near-poor children will succeed in discouraging crowd-out of private insurance, but at the expense of higher rates of uninsurance. Sustained increases in private insurance premiums will continue to create enrollment pressures on state insurance programs for children.

The Impact Of Recent CHIP Eligibility Expansions On Children’s Insurance Coverage, 2008–12

“…1 Another contributing factor may be that eleven states-Alabama, Colorado, Indiana, Iowa, Kansas, Louisiana, New York, Oregon, Washington, West Virginia, and Wisconsinrequire premium and enrollment fees from higher-income families, which has been shown to be associated with decreased take-up of public coverage. 6,[24][25][26] Another study that examined CHIP expansions in 2002-09 and that focused on children with family incomes of 200-400 percent of poverty reported an increase in public coverage (4.1 percentage points) that was not statistically different from ours. 27,28 It is important to highlight the fact that 6.3 percent of children in the treatment group remained uninsured after the expansions took place, despite the fact that they were eligible for coverage through CHIP.…”

The impact of CHIP premium increases on insurance outcomes among CHIP eligible children

“…Prior evidence suggests that CHIP premium increases increase both the likelihood of being privately insured or uninsured; given this prior evidence, researchers have argued that premium schedules should be designed to preserve the accessibility of public insurance and prevent private insurance crowd-out [1,2,5,10]. This analysis adds to the existing literature by using a different research design (regression discontinuity) and a natural experiment due to the fact that children just below and above the cut-off are likely very similar in terms of observable and unobservable characteristics except the premium contribution.…”

“…Previous studies examined the effect of higher public insurance premium on public enrollment, private enrollment, and uninsurance rates [1,2]. The studies showed that the odds of having private coverage and being uninsured both increased with premium increases.…”

Medicaid and CHIP Premiums and Access to Care: A Systematic Review

“…Although evidence indicates that premiums reduce public insurance enrollment for children overall, [15][16][17][18] effects across subgroups are complex and vary by other features of programs. One study suggests that premiums produce little direct revenue compared with average program costs.…”