Increased Family Cost-Sharing in SCHIP: How Much Can Families

Afford?

Betsy ShenkmanBruce Vogel

Institute for Child Health Policy Department of Epidemiology and

Health Policy ResearchUniversity of Florida

June 25, 2005

Project Purposes

To examine the responsiveness of disenrollment to premium changes and child health and sociodemographic characteristics in one state SCHIP;

To calculate a price elasticity for families in the short-term

Study Setting Florida Healthy Kids Program

5-19 year olds between 101% FPL and 200% FPL receive subsidized premiums

Family share prior to July 1, 2003 was $15 per family per month (PFPM)

Termination due to non-payment of premium after two months

Until July 1, 2004, passive renewal process used; so overall disenrollment in the program relatively low

Program Changes Premiums increased on July 1, 2003 from $15

per PFPM to $20 PFPM for all families receiving subsidized premiums

The Center for Medicare and Medicaid Services (CMS) – exceeded Federal cost sharing limits for families at or below 150% FPL

October 1, 2003 – premiums reduced back to $15 PFPM for those at or below 150% FPL; remained at $20 PFPM for those above

Study Time Frame and Sample

Time frame for analyses – March 2003 through March 2004

Disenrollees – Children enrolled for at least two months and disenrolled for at least two months during the time period

Data Enrollment files – months enrolled, age,

gender, address information, subsidy level

Health care claims and encounter data linked to enrollment files

Clinical Risk Groups used to classify children into health status categories Healthy, Significant Acute, Minor Chronic,

Moderate, and Major Chronic Conditions

Analyses Cox proportional hazards models

were used to estimate the responsiveness of disenrollment to premium changes, age, sex, income, CRG health status category, and months enrolled.

Disenrollees From Healthy Kids N=237,178

Percent disenrollees

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04

Key Findings With the $20 premium increase, families 2x as

likely to disenroll as before increase The Price elasticity for the disenrollment

hazard rate of 2.2, was calculated Given this price elasticity, a 10% increase in

the monthly premium would produce a 22% increase in the disenrollment hazard rate

An increase in the premium from $15 per month to $20 per month (a 33% increase), would increase the disenrollment hazard rate by approximately 73%, or from a baseline hazard rate of 1.4% to 2.4%

Key Findings Families at or below 150% FPL 35%

more likely to leave compared to higher income

Rural areas 6% more likely to leave than those in urban areas

Health status an important predictor – 8% to 17% less likely to disenroll with significant acute or chronic condition than those who are healthy

Conclusions In the short-term, families are very price

sensitive Cannot determine if this is an

equilibrium response but Saw a large effect that perhaps could be

moderated across time

Policy Implications Premium increases need to be

considered very carefully At least in the short-term can have a

strong impact Can differentially affect certain groups of

children