UF study: Even slight cost changes affect SCHIP families
Raising monthly premiums by just $5 was enough to push many low-income families out of Florida's State Health Insurance Program in 2003, placing thousands of children at risk for being uninsured, a new University of Florida study shows.
Although slight, the premium increase reduced the amount of time the poorest SCHIP-covered families stayed in the program by 61 percent, UF researchers report in the online edition of the journal Health Services Research. The fluctuation in cost also seemed to have a lasting effect on poorer families, who remained more likely to drop out of the program even after the premium was restored to its original level.
"One of the things we found, in the time frame we looked at, is that it's difficult to undo the effects of a premium increase," said Jill Boylston Herndon, Ph.D., a UF health economist and the lead author of the research. "So it is very important to weigh the different options for making program modifications against the potential impact on enrollment."
SCHIP is often the only insurance option for children whose families do not qualify for Medicaid and cannot afford private coverage. The program made headlines last week when President Bush vetoed a bill to reauthorize and expand the program. Some lawmakers are trying to overturn the veto. Even if the veto is not overturned, legislators and the president could still approve a reworked version of the bill. Depending on how much money is earmarked for the program, some states may raise premiums or co-payments to compensate for budget deficits, Herndon said.
"What often happens when states face shortfalls is they look at ways to reduce program costs, and one strategy may be to increase family cost-sharing," said Herndon, a research associate professor with the Institute of Child Health Policy and the department of epidemiology and health policy research in UF's College of Medicine. "What this (research) demonstrates is if family cost-sharing were increased, then we face children falling off the rolls and being at greater risk for being uninsured." U.S. lawmakers enacted the program in 1997 as a way to reduce the number of uninsured children. For several years the number of children lacking health insurance dropped, but shifted course in 2005 and has been increasing since then, according to the U.S. Census Bureau. In 2005, 11 percent of children, about 8 million, lacked coverage. Last year, 12 percent of children, or about 9 million, were uninsured.
To study how slight changes in cost would affect the program in Florida, UF researchers examined enrollment data from more than 150,000 children who were insured through the program in 2003 when the subsidized monthly premium was raised from $15 to $20 per family. Herndon collaborated with UF researchers W. Bruce Vogel, Ph.D., Richard Bucciarelli, M.D., and Elizabeth Shenkman, Ph.D., on the study.
The researchers divided the children into two groups based on income. Families in the lower-income group, whose household incomes ranged from $18,000 to $27,000 for a family of four, were most affected by the change. Prior to the increase, children in these families were enrolled in the program for an average of 53 months. The premium hike reduced that by 61 percent to about 21 months immediately after the change. Families with slightly higher incomes, between $27,000 and $37,000 for a family of four, were affected too. The average enrollment length among these families dropped 55 percent, from 61 months to 27 months.
After three months, the Centers for Medicare and Medicaid Services determined the $20 monthly premium was too high for families in the lower-income bracket, so it was reduced back to $15. But families continued to drop out of the program faster than they did before the $5 increase, even months after the premium was lowered to its original price, the researchers noted. The higher-income group paid $20 per month for the premium throughout the 12 months researchers studied after the increase. Average enrollment lengths also did not return to pre-increase levels among this group.
"What was striking is how rapid the changes in enrollment were in response to changes in policy," said E. Richard Brown, Ph.D., the director of the University of California-Los Angeles Center for Health Policy Research. "It shows we need to be very careful with these policies. We need to be thinking about the families and children affected.
"If we increase the cost and kids are dropped, we're really missing the important goal of why we developed SCHIP in the first place, which is to ensure children have health coverage and access to care."
According to the UF study, families whose children had chronic health problems were less likely to drop out of the program than families with healthy children. Still, researchers noticed a significant decrease in enrollment lengths among children with health problems, too.
"The idea of health-care coverage is to also protect you against unexpected problems, so if healthy children are not covered and health problems do arise, they're going to have a lot of difficulty," Herndon said.
Research from other institutions has shown that many children who drop SCHIP often remain uninsured, Herndon added.
"They may stay uninsured for significant periods of time, which means they're going to have reduced access to care," she said. "They're more likely to not get care, have delays in care and have unmet health-care needs."