1. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution The Effects of Premium Increases in SCHIP Programs: The Experience of Three States Genevieve Kenney, The Urban Institute Andrew Allison, Kansas Health Institute Julia Costich, University of Kentucky Jim Marton, University of Kentucky Josh McFeeters, The Urban Institute June 25, 2005 Child Health Policy Research Meetings

2. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Two-Part Project Funded by the David and Lucile Packard Foundation 1) Examine effects of increases in public premiums on enrollment in public programs in three states How did enrollment patterns change following premium increases? To what extent did disenrollment patterns change following premium increases? Did effects appear to vary with income? 2) Examine effects of Premiums on Insurance Coverage Nationally

3. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Motivation Between 2002 and 2004,16 states raised premium levels under SCHIP Increased attention on cost sharing in Medicaid programs Few studies have examined effects of premium increases in a rigorous manner, with controls for potentially confounding changes

4. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Background 35 states expanded coverage with a separate non-Medicaid program Cost sharing must be less than 5% of family income in separate programs Cost sharing amounts cannot be higher for low-income families than they are for higher- income families Premiums are rare in Medicaid programs for children

5. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Premium Policies in Three States, 2003 KansasKentuckyNew Hampshire For 151-175% FPL: Premium increased from $10 to $30 per family in 2/03, then decreased to $20 in 7/03 For 176-200% FPL: Premium increased from $15 to $45 in 2/03, then decreased to $30 in 7/03 For 151-200% FPL : $20 premium per family introduced in 12/03 (no premium charged prior to that time) For 185-249% FPL: Premium increased from $20 to $25 per child in 1/03. Family maximum is $100 per month For 250-300% FPL: Premium increased from $40 to $45 in 1/03. Family maximum is $135 per month No sanctions for non-payment until re-certification. Termination of enrollment if more than two months past due.

6. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Study Populations  Children ages 1 to 18 in New Hampshire’s Healthy Kids Silver program: 185-300% FPL;  Children ages 0 to 18 in Kentucky’s KCHIP III program: 151-200% FPL;  Children ages 0 to18 enrolled in Kansas’ HealthWave XXI program: 151-200% FPL; Study Period: July 2001 – November 2004

7. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Data Monthly administrative caseload data in premium-paying categories; Data linked over time at child-level to identify enrollment spells; New enrollees defined as children in premium paying SCHIP in a given month, but not enrolled in premium-paying SCHIP (KS, NH)/any public coverage (KY) the prior mo.; Disenrollees defined as children enrolled in premium-paying SCHIP for at least one month, but not enrolled in premium paying- SCHIP in the subsequent month;

8. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Methods Contrast changes in caseload growth before and after premium increase; Estimate multivariate time-series models of caseload and new enrollment (control for time trends, monthly dummies, address auto- correlation); Estimate Cox Proportional Hazard models to assess changes in disenrollment patterns; Use unemployment rate as control variable

9. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Figure 1. Total Caseload in the Premium-Paying Categories of Kansas' HealthWave XXI Program

10. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Figure 2. Total Caseload in the Premium-Paying Category of Kentucky's KCHIP Program

11. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Figure 3. Total Caseload in the Premium- Paying Categories of New Hampshire's Healthy Kids Silver Program

12. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Change in Growth Rates following Premium Increases 6 Months 6 Months BeforeAfter Kansas 151-175% FPL13.53%4.27% 176-200% FPL 8.64%2.54% Kentucky 151-200% FPL-0.17%-17.44% New Hampshire 185-249% FPL32.37%7.52% 250-300% FPL38.56%6.84%

13. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Findings: Time-Series Models  All estimates point to negative effects of premium increases on premium-paying caseload, but magnitude and statistical significance vary substantially across models Impact estimates sensitive to specification of time trends Inclusion of county-level unemployment rate affected the estimated premium impact in one of the three states

14. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Findings: Hazard Models No consistent effects for Kansas Strong, consistent effects for Kentucky— hazard rate 1.4 times higher following introduction of premium Small, variable effects for New Hampshire— hazard rate 1% to 10% higher following premium increase; larger effects found for lower-income than for higher-income group

15. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Magnitude: Hazard Models After new premium in KY,1,522 kids per month left KCHIP III on average, compared to 1,087 kids before the new premium; After premium increase in NH, 1,012 to 1,097 kids left Healthy Kids Silver compared to 999 before the premium increase;

16. THE URBAN INSTITUTE Preliminary: Not for Quotation or Distribution Policy Implications Increases in premiums appear to reduce enrollment and increase disenrollment Larger effects found with introduction of new premium and for lower-income children Other premium policies may matter Important to address possible spillover effects on non-premium paying caseload and impacts on insurance coverage