1

Maryland

How Do Premiums Affect Enrollment?

Tricia RoddyMaryland Department of Health and

Mental Hygiene

June 28, 2004

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92,000

291,000

11,000

111,000

19,000 17,000

77,000

0

100,000

200,000

300,000

400,000

Adults Children MCHPChildren

MCHPPremiumChildren

Fee-For-Service -

Adults

Fee-For-Service -Children

NursingHome

Managed Care Program – HealthChoice

Maryland’s HealthChoice Program Provides Services To 75% Of All Medicaid Recipients

Based on January 2004 enrollment

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Budgetary Language Expanded Premium Requirements To More Recipients Prior to FY 2004

The income standard for MCHP Premium was between 200% and 300% of FPL

Premiums are set at 2% of the annual income of a family of two, regardless of the actual number of children

$41 for incomes between 200% and 250% of FPL

$52 for incomes between 250% and 300% of FPL

FY 2004 - General Assembly Budgetary Language

The income standard for MCHP Premium was expanded to include children with family income of 185% to 200% of FPL for FY 2004 only

Premiums were set at 2% of the annual income of a family of two at 185% of FPL, regardless of the actual number of children ($37 per family per month)

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The Number Who Disenrolled Was Lower Than Expected

An Urban Institute study estimated declines in enrollment of 16% when participants are charged premiums that equal 1% of family income, enrollment declines of about 49% if premiums equal three percent

In Maryland, the decline in enrollment (28%) was lower than expected for this population group

Source: Leighton Ku. “Charging The Poor More For Health Care: Cost-Sharing in Medicaid.” Center on Budget and Policy Priorities. May 7, 2003.

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Premium’s Impact On Enrollment Was Immediate and Somewhat Temporary

• Since December 2003, enrollment has been steadily growing

Between November 2003 and January 2004, enrollment grew by 10%

In a comparable period last year, enrollment was relatively static

As of March 31, 2004, 158 (or 9%) disenrollees have re-enrolled

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Department Conducted Survey To Study The Premium Expansion

• Determine the impact of the premium on enrollment

• Determine whether families had obtained other

health coverage since their children disenrolled • Determine whether there were differences

between enrollees and disenrollees in terms of utilization, family size, age, race/ethnicity, and geography

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Premium Not The Main Reason For Why Children Disenrolled

• 360 parents/guardians were surveyed in February 2004

• Key Findings

- A majority said the premium was not the main reason their child left MCHP

- 63% thought $37/month per family was affordable

- Over half said they had obtained other health insurance for their child

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While Enrolled, Children Who Disenrolled Were Less Likely to Access Services

83

.0%

69

.4%

52

.1%

33

.6%

34

.2%

29

.6%

43

.2%

76

.1% 8

1.7

%

60

.5%

44

.2%

40

.5%

33

.3%

49

.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

0 - <1 1 - 2 3 - 5 6 - 9 10 - 14 15 - 18 All

Disenrolled

Enrolled

Percentage of the Population Accessing Well-Child Services by Age, CY 2002

Source: Maryland encounter data

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Distribution of Family Size for Children in 185-200% FPL Families

Time Period One Two Three Four FivePrior to Premium 63.3% 27.0% 7.7% 1.7% 0.2%After Premium 54.3% 34.0% 9.5% 1.9% 0.3%Disenrolled Population 78.5% 16.2% 3.9% 1.3% 0.1%

Number of Children Enrolled per Family

Families with 1 child accounted for the majority of disenrollment between Sept. 03

and Jan. 04

Families With More Than One Child Were More Likely To Stay On The Program

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Racial/Ethnic Distribution of Children who Disenrolled Compared to Children who Remained Enrolled (12/31/03)

52%

32%

9%

3% 4%

44%

39%

11%

3% 4%

0%

20%

40%

60%

80%

100%

African-American Caucasian Hispanic Asian Other

Disenrolled

Enrolled

A Slightly Larger Proportion Of African-Americans Disenrolled

Source: Maryland encounter data

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Age Distribution of Children who Disenrolled Compared to Children Who Remained Enrolled (12/31/03)

5%

13

% 18

%

20

% 25

%

20

%

2%

12

% 19

%

22

% 27

%

19

%

0%

20%

40%

60%

80%

100%

0-1 1-2 3-5 6-9 10-14 15-18

Disenrolled

Enrolled

Very Little Difference With Regard To Age Distribution

Source: Maryland encounter data

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Regional Distribution of Children Who Disenrolled Compared to Children who Remained Enrolled (12/31/03)

18%

32%

8% 5%

34%

4%

18%

27%

10%

6%

32%

6%

0%

20%

40%

60%

80%

100%

Baltimore City BaltimoreSuburban

Eastern Shore SouthernMaryland

WashingtonSuburban

WesternMaryland

Disenrolled

Enrolled

Little Differences Among Geographic Regions

Source: Maryland encounter data

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Lessons Learned

Survey findings indicate that the premium did not cause the majority of disenrollments

Most of the disenrolled had obtained other insuranceDisenrolled children used fewer services while

enrolledDisenrolled children were more likely to be in families

with only one child enrolledThere were few differences between enrolled and

disenrolled children with regard to age, race/ethnicity, or region

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What Does This Mean For Maryland?

Cost sharing should be explored before making more serious cuts, such as reductions in services and eligibility

CMS should reevaluate its cost sharing policies

Cost sharing should be explored when designing new programs to cover more of the uninsured