Uninsured Population: Hawai ` i Children Age 0-18

This research is funded in part through a U.S. Health Resources and Services Administration, State Planning Grant to the Hawaii State Department of Health. Sub-Contract Research Corporation of the University of Hawaii. Research conducted by the University of Hawaii, Social Science Research Institute in collaboration with the Hawaii State Department of Health, Hawaii Institute for Public Affairs: Hawaii Uninsured Project and the Hawaii

Health Information Corporation.1

Uninsured Population: Hawaiì

Children Age 0-18 Gerard Russo, Ph.D.

Sang-Hyop Lee, Ph.D. Lawrence Nitz, Ph.D.

Thamana Lekprichakul, Ph.D.Abdul Jabbar, Ph.D. Candidate

Rui Wang, Ph.D. CandidateUniversity of Hawaiì at Mānoa

HRSA SPG Program Hawaiì Coverage For All ProjectTechnical Workshop VI

17 September 2004

17 September 2004 Preliminary results. Revised September 2004. Subject to further revision. 2

Age Distribution of Hawai`i’s Uninsured Population: CPS 1994-2003, 10-year Average 112,565

22.8%

75.0%

2.2%

Age 0-18

Age 19-64

Age 65+

25,669

84,369

2,527


Number of Uninsured Children: Age 0-18

Survey (Years) Uninsured Children Age 0-18

CPS 1994-2003 25,669

HHS 1997-2002 12,016


Number of Uninsured Children: Age 0-17

Survey (Years) Uninsured Children Age 0-17

CPS 1994-2003 23,215

HHS 1997-2002 10,820

SLAITS 2000-2002 11,093


Uninsured Children Age 0-18 by FPL: CPS 1994-2003, 10-Year Average

32472874

892610622

0-100% 101-200% 201-300% >300%

Federal Poverty Level

Per

son

s



The Impact of State Children’s Health Insurance Program

(SCHIP) Expansion on Health Insurance Coverage in Hawai`i

Gerard Russo, Ph.D.Sang-Hyop Lee, Ph.D.

Lawrence Nitz, Ph.D.Thamana Lekprichakul, Ph.D.

Abdul Jabbar, Ph.D. CandidateUniversity of Hawai`i at Mānoa

Kathleen Baker, Ph.D., Hawaii Department of HealthHawaii HRSA SPG

Technical Workshop VI17 September 2004


Research Objective: Purpose of this study is two-fold.

First, to assess the impact of the initial SCHIP expansion which occurred in Hawaii July 1, 2000 and extended free public insurance coverage to all children aged 0-18 years residing in households with incomes not greater than 200% of the Hawaii specific federal poverty level (FPL).

Second, to predict take-up of public coverage and crowd-out of private insurance which may occur under a proposed expansion of eligibility to children aged 0-18 years residing in households with incomes between 201% and 300% of the federal poverty level (FPL).


Hawai`i Title XXI Program: SCHIP July 2000 SCHIP Hawaii children aged 0 to 18

years 200% of the FPL effective. Hawaii SCHIP is implemented as a

Medicaid/QUEST expansion. The Hawaii Medicaid Program is implemented

as a Managed Care & Managed Competition Program under the acronym QUEST: 1115 Waiver Demonstration.


SCHIP Federal Medical Assistance Percentage: Hawaii 2000-2005

Enhanced Federal Medical Assistance Percentage (FMAP):Hawaii 2000-2005

Federal Fiscal Year (FFY) Enhanced FMAP: SCHIP

2000 65.71%

2001 67.70%

2002 69.44%

2003 71.14%

2004 71.23%

2005 70.93%

Source: Federal Register


Hawai`i SCHIP Program Eligibility by Age and Federal Poverty Level

050

100150

200250300350

0 2 4 6 8

10

12

14

16

18

Age

SCHIPExpansionSCHIP July2000MedicaidQUEST


Population Studied

This study analyzes the insurance coverage of Hawaii residents aged 0-18 years residing in households with incomes between 0% and 300% of the Hawaii specific federal poverty guidelines as published by the U.S. Department of Health and Human Services.

Weighted population estimates are produced using the Hawaii Health Survey 1998-2002 and the Hawaii sample of Current Population Survey 1998-2003.


Population Studied (continued)

Three groups are analyzed Children eligible for free public insurance

throughout the period (“The Control Group”). Children who began the period ineligible and

became eligible in July 2000 (“The Treatment Group”).

Children who were ineligible throughout the period. This is the target group for future expansion.


Hawai`i Population: Children Age 0-18 by Eligibility, 2001-2002(2-Year Average)

Survey Year

Medicaid QUEST Eligible

SCHIP Eligible

SCHIP Proposed Expansion 201-300%

FPL

301% + FPL

CPS

2002-200389,645 74,837 64,074 105,193

HHS

2001-200264,194 64,604 65,847 103,758


Comparison of CPS, HHS and SLAITS-CSHCN (age 0-17)

Survey Year

Medicaid QUEST Eligible

SCHIP Eligible

SCHIP Proposed Expansion 201-300%

FPL

301% + FPL

CPS

2002-200389,645 74,837 64,074 105,193

HHS

2001-200264,194 64,604 65,847 103,758

SLAITS

2000-200250,115 48,861 60,143 137,314


Method of Analyzing SCHIPExpansion Using the Hawaii Health Survey and Current Population Survey Natural Experiment Based on July 1, 2000

SCHIP Expansion Pre-Expansion Survey Years: Before July 1, 2000

HHS 1998,1999,2000 thru JuneCPS 1998,1999,2000

Post-Expansion Survey Years: After July 1, 2000 HHS 2000 after July, 2001, 2002CPS 2002, 2003

Difference-in-Differences Approach


Data is Split Four Ways

1.Treatment Group Before SCHIP 2.Treatment Group After SCHIP 3.Control Group Before SCHIP 4.Control Group After SCHIP Pooled Regression Model Dummy Variables Pick Up Differences


Econometric Model: Multinomial Logit Multinomial Logit to

Estimate the Probability of Coverage

Three Categories Uninsured Private Insurance &

Other Medicaid QUEST

SCHIP

Predictor Variables Age Sex Income (FPL) County of Residence Race/Ethnicity Health Status Adult Employment

Status Adult Educational

Attainment Number of Children


Differences before and after July 1, 2000: CPS (percentage point changes)

Difference in Treatment Group(SCHIP Eligible)

Difference in Control Group (Medicaid Eligible)

Difference in Differences

Uninsured -3.21% -0.29% -2.92%

Public Insurance

+10.98% +0.93% +10.05%

Private Insurance

-7.77% -0.64% -7.13%


Difference-in-Differences Estimates of Insurance Coverage Change due to SCHIP Expansion July 1, 2000

Coverage

Percentage Point Change

CPS

Uninsured -2.9%

Public Insurance

+10.0%

Private Insurance

-7.1%


Summary Results: Selected Studies

Study Survey Take-Up Crowd-Out

Cutler & Gruber 1996 CPS 23% 30%-40%

Yazici & Kaestner 2000

NLSY 19%

Blumberg et al. 2000 SIPP 6.3% 4.4%

LoSasso & Buchmueller 2002

CPS 4%-10% 18%-50%

Card & Shore-Sheppard 2003

SIPP, CPS, NHIS

10%-13% 0%-50%

Russo, et al. 2004 CPS 10% 70%


Difference-in-Differences Estimates of Insurance Coverage Change due to SCHIP Expansion July 1, 2000

Coverage

Change in Children Covered

CPS

Uninsured -2185

Public Insurance

+7519

Private Insurance

-5334


SCHIP Enrollment: Med-QUEST Administrative Data

2025

8986

12631

0

2000

4000

6000

8000

10000

12000

14000

Jul-00

Nov-00

Mar-01

Jul-01

Nov-01

Mar-02

Jul-02

Nov-02

Mar-03

Jul-03

Nov-03

Mar-04

Jul-04

CPS

HHS

Source: DHS Enrollment Data, Hawaii Covering Kids www.coveringkids.com

http://www.coveringkids.com/



POLICY SCENARIO:SCHIP EXPANSION

Expand the eligibility requirement for the State Children’s Health Insurance Program for children aged 0-18 years from an upper limit of 200% to 300%

of the Federal Poverty Level.


Estimated Impact of SCHIP Expansion from an Upper Limit Eligibility of 200% FPL to 300% FPL

Coverage

Change in Children Covered

CPS

Uninsured -1871(29.1%)

Public Insurance

+6438(100%)

Private Insurance

-4567(70.9%)


Principle Findings Based on the CPS estimates, the initial SCHIP

implementation of July 1, 2000, which brought public insurance eligibility to 200% FPL, crowded-out private insurance at the rate of 2.4 children for every one child previously uninsured.

The proposed further expansion to 300% is projected enroll 6440 additional children. Of these approximately 1870 would have been previously uninsured, while 4570 would be drawn from privately insured families.


Conclusion Because of a number of factors, including

Hawaii’s Pre-paid Health Care Act of 1974, which mandates private sector employment-based coverage, middle-class families are typically well insured. Of the approximately 65,000 children aged 0-18 years residing in families with incomes between 201% and 300% of the FPL, only 2000-6000 are without health insurance coverage. As a result, a generous public expansion which takes all comers up to 300% FPL is likely to yield a large number of privately insured along with the uninsured.


Policy Implications

A Hawaii SCHIP expansion to 300% of the FPL will result in crowd-out of private insurance on a 2.4-to-1 basis for every newly insured child.

Whether viewed from the broad federal perspective or the narrow state budgetary perspective, such an expansion would generate high public expenditures per newly insured child and should therefore be pursued with caution.

A successful and sustainable expansion of eligibility criteria must be accompanied by safeguards against excessive private insurance crowd-out.


Limitations

Program participation and crowd-out are estimated imprecisely.

Estimates only cover SCHIP through 2002. Unable to estimate the extent to which

SCHIP prevents Medicaid spend-down. HHS and CPS subject to Medicaid Under

Count.


Mahalo!

This research is funded in part by U.S. Department of Health and Human Services

Health Resources & Services Administration State Planning Grant

Hawaii State Department of Health.

Uninsured Population: Hawai ` i Children Age 0-18

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