The Effect ofHIFA Waiver Expansions on Uninsurance Rates in Adult 
Populations

Abstract

Research Objective. To evaluate the effect of the Health Insurance Flexibility and Accountability (HIFA) demonstrations on the rate of uninsured. The policy purpose of the HIFA demonstrations is to encourage "new comprehensive state approaches" that will increase the number of insured. HIFA interventions include changes in benefit packages, eligibility rules for public programs, and state subsidization of private health insurance premiums. Some states emphasized private insurance (premium assistance), whereas others placed greater emphasis on expanded eligibility for public insurance. Data Sources/Study Setting. Data were drawn from the Current Population Survey from 2000 to 2007. The target populations for the HIFA waiver demonstrations consisted of individuals who were eligible for the HIFA waiver demonstrations in demonstration states. Study Design. The estimation approach was a probit model using a difference-in-differences approach. Principal Findings. In states that fully implemented their HIFA waiver, HIFA increased the rate of insurance coverage by 6.4 percentage points on average in the targeted adult population, suggesting that approximately 118,848 adults gained health insurance due to HIFA. Total HIFA adult enrollment in the six states studied was 280,739. The effect size varied by state, with Maine having the largest effect and Illinois the smallest. The results were robust to different specifications of the control group. Conclusions. Our findings suggest that public insurance initiatives that provide states with flexibility regarding eligibility and plan design are a viable policy approach to reducing uninsurance rates. Key Words. Under HIFA, states were allowed to subsidize private health insurance premiums for either SCHIP or Medicaid enrollees (the latter under the Medicaid Health Insurance Premium Payment program) (Zabaza 2003). Subsidies for private health insurance premiums were intended to leverage private funds to help cover the uninsured and overcome the "welfare stigma" associated with public insurance programs for low income people. The Centers for Medicare and Medicaid Services (CMS) provided "strong encouragement" to states to further integrate, or at a minimum coordinate, Medicaid and SCHIP funding with private health insurance options (including both group and individual insurance). Flexibility was provided for premium assistance options, in terms of benefits and cost sharing. States also were allowed to use Federal funds to develop and subsidize privately offered health insurance products that groups or individuals might purchase with a public subsidy. A total of fifteen states Table 1). The purpose of our analysis is to determine whether adult enrollment in HIFA programs had the effect of reducing the uninsurance rate in HIFA states. The HIFA programs would reduce the uninsurance rate as long as HIFA enrollees were drawn from the ranks of the previously uninsured rather than from individuals previously enrolled in public or private health insurance programs. Thus, our analysis ...

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