Blewett, Lynn A.
Principal Investigator

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e blewe001@umn.edu

The Children's Health Insurance Program: A Minnesota Perspective

Congress has still not fully reauthorized the Children’s Health Insurance Program (CHIP), and states are working to figure out how to keep their kids covered. CHIP provides essential coverage for millions of our nation’s poorest children and should not be used as a bargaining tool in federal budget negotiations. It’s time to put politics aside and reauthorize this program that is vital for vulnerable children and that both sides ofthe aisle claim to support.

Minnesota: A Pioneer in Covering Kids

Minnesota, as a national leader in health care, has a long history of providing coverage for its children--well before the passage of the federal CHIP program.  As far back as 1987, Minnesota provided coverage to low-income children who were just above the income level to qualify for Medicaid, and we paid for it with state funds alone. The program initially covered physician services for children under age six and low-income pregnant women who were not Medicaid-eligible. The state financed the program through an annual fee of $35 for pregnant women and $25 for children, and a one-cent tax on cigarette packs.

 

In 1991, Minnesota's public coverage for kids was expanded to all children under age 18, and in 1992, Governor Carlson passed comprehensive health reform legislation, the HealthRight Act, with broad bipartisan support. Renamed MinnesotaCare, the state's public coverage program provided subsidized health insurance for working families with incomes just above Medicaid eligibility levels (up to 275% of the Federal Poverty Level) who not eligible for employer-sponsored insurance. The program continued to be funded with state-only dollars, and the legislation behind it included earmarked funding from a new 2% provider tax, a 1% health insurance premium tax, as well as a five-cent increase in the cigarette tax.

Early analyses of the impact of MinnesotaCare found that between 1990 and 1995 the proportion of uninsured children (uninsured for 12 months or longer) in Minnesota decreased from 5.2% to 3.1%. This change translated to an increase in access to care for kids and a reduction in the amount of free care given by medical providers to the uninsured. 

CHIP's Evolving Role in Minnesota and the Nation

Minnesota and other states that had similarly funded their own safety net programs were thrilled when CHIP passed in 1997. Modeled in part on the Minnesota program, CHIP targeted families just above the eligibility level for Medicaid and provided needed support to low-income working families. In its early years, CHIP funded very few of Minnesota’s low-income children, as the program was targeted to states with larger numbers of uninsured children; in fact, a report from 2000 showed only 8 children in Minnesota covered by CHIP. However, Minnesota leveraged CHIP funding over time, and today Minnesota uses its CHIP dollars to support coverage for 127,000 children and pregnant women. Nationwide, the program is now well-established and covers close to 9 million children.   

The Uncertain Future of CHIP Puts the Most Vulnerable at Risk

Minnesota’s goal has always been to get and keep children and their families insured. We know that providing health insurance coverage enhances children’s school performance, increases parents’ work attendance, improves and sustains high immunization rates, and advances the health and economic future of children as they age into adulthood. Most of all, coverage assures that all have an opportunity to pursue their goals and aspirations in life.

Both the delay in the CHIP reauthorization and the real potential for no future funding affects the most vulnerable: poor children. It’s hard to believe, but close to one in every four children in this country lives in poverty. For African American children, the rate is over 40%.

States Employing Stopgap Measures 

With the end of CHIP’s authorization on September 30^th, states have been able to apply for emergency funding to keep their programs going. Oregon and Minnesota have both pledged to make up what they hope is a temporary funding gap with state dollars, but it puts their finances in jeopardy — Minnesota’s latest budget projection released in early December includes a $188 million shortfall if CHIP is not reauthorized.  Meanwhile, other states will need to shut down new enrollment and start notifying families of potential loss of coverage.

In the meantime, the stress to families of not knowing if coverage will continue and for how long, is real. States are scrambling to keep kids covered — making tremendous efforts to find alternative funding, notifying families of the potential phase out of the program, and placing limits on new enrollment in anticipation of a lack of funding.

 

Funding CHIP: A No-Brainer and the Right Thing to Do

Lynn A. Blewett, PhD, MPA, is Professor of Health Policy at the University of Minnesota, School of Public Health

SHADAC Staff

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e shadac@umn.edu

Lynn Blewett Discusses Minnesota’s 1332 Reinsurance Waiver on Health Affairs Blog

SHADAC Director Lynn Blewett discusses Minnesota’s 1332 reinsurance waiver request and the federal response in a new post on the Health Affairs Blog.

SHADAC Staff

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e shadac@umn.edu

December 5th Webinar: Impact of Medicaid vs. Marketplace Coverage on Out-of-Pocket Spending for Near-Poor Adults

SHADAC will host a coffee-break webinar on December 5th at 12:00 p.m. Central featuring Urban Institute's Dr. Fred Blavin, whose SHARE-funded research asks how medical spending burdens for near-poor families in non-expansion states would change if the states were to expand Medicaid.

			EVENT DETAILS
			Medicaid vs. Marketplace Coverage for Near-Poor Adults: Impact on Out-of-Pocket Spending
				Presenter: Fred Blavin, PhD Date: December 5, 2017 Time: 12:00 p.m. - 12:30 p.m. Central  Register now.

In states that chose to expand Medicaid under the ACA, adults between 100% and 138% of the federal poverty level (i.e., the "near-poor") are Medicaid-eligible and typically face minimal or no premiums or cost-sharing for medical expenses. In states that have chosen not to expand Medicaid, this population cannot enroll in Medicaid but may quality for tax credits to purchase marketplace health insurance plans that entail out-of-pocket (OOP) premiums and cost-sharing. Dr. Blavin's analysis uses data years 2013 to 2015 from the Current Population Survey and state Medicaid expansion decisions as a natural experiment to estimate the impact of access to the Medicaid expansion on OOP health expenses, compared with access to subsidized marketplace coverage. 

Dr. Blavin will answer questions from attendees after the presentation.

SHADAC Staff

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e shadac@umn.edu

State Implementation of the ACA’s Medicaid Smoking Cessation Provisions: SHARE Findings at Dissemination & Implementation Conference

Dr. Sara McMenamin of University of California, San Diego, will present results from her SHARE-funded research at the 10th Annual Conference on the Science of Dissemination and Implementation in Health.

Presentation At-a-Glance

Dr. McMenamin’s SHARE research examined state progress in implementing the ACA’s four provisions regarding Medicaid coverage for smoking cessation treatments. These provisions address: (1) coverage for pregnant women; (2) coverage for all enrollees through an increased federal match incentive; (3) coverage for all enrollees through Medicaid formulary requirements; and (4) coverage for Medicaid expansion enrollees.

From January through June 2017, Dr. McMenamin and her team studied Medicaid programs in all 50 states and the District of Columbia and found that 46 Medicaid programs had increased coverage for smoking cessation treatments by executing one or more of the four provisions. The most commonly implemented provision was coverage of comprehensive treatments for pregnant women without cost-sharing, which 27 Medicaid programs had in place. In all, only 11 state programs had implemented all four smoking cessation treatment provisions in the ACA.

Access the full presentation abstract.

Logistics

The D&I Conference is co-hosted by the National Institutes of Health and AcademyHealth and will take place December 4th through 6th in Arlington, VA.

Dr. McMenamin’s presentation is on December 4th at 2:50 p.m. at the Crystal Gateway Marriott, Salon B.

Blewett, Lynn A.
Hest, Robert

Oregon Joins States Hoping to Stabilize Individual Market through Reinsurance Using 1332 Waivers

Update September 15, 2017: On August 31, Oregon submitted a 1332 Waiver Application to seek pass-through funding for its reinsurance proposal. $90 million in annual state funding for reinsurance plan is paid for through a 0.3% assessment levied on major medical premiums and through excess fund balances in two state programs. The state is seeking more than $30 million annually in federal pass-through funding. The reinsurance plan has a coinsurance rate of 50% and a cap of $1 million. The attachment point is to be determined.

On August 16, Oklahoma submitted its 1332 reinsurance proposal, called the Oklahoma Individual Health Insurance Market Stabilization Program (OMSP). The OMSP will have a broad corridor of $15,000 – $400,000 and will be largely funded with federal pass-through funding, with a smaller portion coming from a state assessment on health insurers.

UPDATE August 3, 2017: Minnesota’s Department of Commerce has released preliminary individual market premium increases with and without reinsurance. With state reinsurance, plans expect that 2018 premiums could be modestly higher (largest increase 11.4%) to modestly lower (largest decrease 14.5%) than 2017 premiums. Without state reinsurance, plans project much larger increases in 2018 premiums.

In addition, Oklahoma and New Hampshire recently released draft 1332 Waiver Applications to seek pass-through funding for state reinsurance proposals. Oklahoma’s 1332 waiver proposal includes reinsurance along with broader reforms to its individual market. The state is awaiting further actuarial analysis before determining its reinsurance plan’s corridor, coinsurance rate, and level of pass-through funding. Both Oklahoma’s and New Hampshire’s proposals are traditional reinsurance plans funded by assessments on health insurers. The table and text below has been updated accordingly.

UPDATE July 9, 2017: HHS approved Alaska's 1332 Waiver on July 7, 2017. The state was awarded $48.3 million in federal pass-through funding in 2018, and a total of $322 million over five years. The table below has been updated to reflect this development. 

June 29, 2017: Minnesota, Alaska, and Iowa have each submitted 1332 State Innovation Waivers seeking federal funding of their state-based reinsurance proposals. Minnesota and Alaska, each of which entered their most recent legislative sessions with a budget surplus, have passed bipartisan legislation and provided initial state funding for their reinsurance plans; Iowa, which faced a budget shortfall of nearly $100 million, has not passed legislation or established state funding but submitted a 1332 waiver request that seeks federal funding for reinsurance along with significant changes to the state's Marketplace subsidy levels and eligibility. 

The following table highlights key elements of the three 1332 reinsurance proposals along with the details of awarded funding, where applicable.

The reinsurance programs proposed in the 1332 Waivers are of two different designs. Iowa and Minnesota’s proposals are traditional reinsurance programs where claims in a specified corridor (e.g. $50,000–$250,000) are paid, minus a coinsurance rate; Alaska’s program is condition specific, with the state paying all claims for individuals with one or more of 33 specific conditions. Iowa’s proposal to cover 100 percent of claims above $3 million appears to be targeted at helping insurers pay the claims of an individual market enrollee whose treatment for a severe genetic disorder routinely generates more than $1 million per month in claims.

The letter from Secretary Price to state Governors earlier this spring suggested that states pursue reinsurance, and these are the first states out of the block. We will add details as the review process moves along. A key outcome will be whether CMS enforces their requirement that 1332 Waivers be authorized by state legislation as specified in the 1332 Waiver checklist issued May 11, 2017. (As noted above, Iowa’s 1332 Waiver was submitted by the state’s insurance commissioner and is not associated with any state legislation.)

¹Kaiser Family Foundation. "State Health Insurance Marketplace Types, 2017." 
²Expanded Medicaid September 1, 2015
³Minnesota also has MinnesotaCare, the Basic Health Program (BHP) for individuals 138-200% FPL.
⁴Expanded Medicaid with Section 1115 Waiver
⁵Expanded Medicaid with Section 1115 Waiver