Childrens Coverage Healthy Ms Summit 2008

Profile of Children’s Health Coverage in Mississippi

Healthy Mississippi Summit

May 22, 2008

2

Overview

Methods National Ranking State Demographics State Trends Value of Health Insurance Health Insurance Strategies Comparison Policy Options

3

Objectives

Identify demographic profile & trends associated with Mississippi children’s health coverage

Describe value of children’s health insurance coverage

Compare health insurance strategies & policy options to increase health insurance for children

4

Methods: Data Sources

Current Population Survey (CPS), Annual Social & Economic Supplement (ASEC)

- Federal: U. S. Census Bureau Medical Expenditure Panel Survey (MEPS)

- Federal: Agency for Health Care

Research & Quality (AHRQ)

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Methods: CPS-ASEC

Telephone & in-person survey of 78,000 households annually

Asks about health coverage over previous calendar year for all household members

Example: 2007 CPS-ASEC asks questions about health coverage over calendar year 2006

Representative national & statewide health insurance estimates

6

Methods: Caveats CPS-ASEC

Current health insurance rather than past year may be mistakenly reported

Relies on recall of health insurance type, problematic in particular with private insurance types & confusion with public coverage types

Example: Medicaid numbers known to be lower when compared to program administrative data

7

Methods: CPS-ASEC

Contracted with State Health Access Data Assistance Center (SHADAC), University of Minnesota

Expertise in helping states monitor rates of health insurance

Aided in analysis of CPS data for Mississippi

Most recent available data estimates used on children between 0-18 years of age

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Methods: MEPS

Two components: Household & Insurance Household component provides data from

individual household units Insurance component is a separate survey of

employers Insurance component ONLY utilized in these

analyses

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Methods: MEPS

Mail & telephone survey of 40,000 establishments annually

Asks employers about employer-based health insurance over previous calendar year

Similar caveats with recall as CPS-ASEC Representative estimates for national &

statewide health insurance coverage Data are most recent available estimates

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Children’s Health Coverage: United States vs. Mississippi

MS: Ranks 46th in US for % children uninsured

Employment-based Private Insurance lower in MS

Uninsured higher in MS

Public Insurance higher in MS

5% 6%

54%

42%

3% 4%

12%15%

5% 3%

21%

30%

0%

10%

20%

30%

40%

50%

60%

Private & Public

Private-Employment Based

Private-Purchased

Uninsured

MilitaryPublic Only

Distribution of Children (0-18) by Type of Coverage, U.S. & MS

US

MS

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

11

Health Coverage by Type – All Mississippi Children

Nearly half covered by private-employment based, private-purchased, or military insurance

1/3rd covered by public insurance via Medicaid or SCHIP

Less than 10% have a mixture of public/private insurance

1 out of every 7 (15%) Mississippi children are uninsured

Military3%

Public Only30%

Private & Public6%

Private - Purchased

4%

Uninsured15%

Private - Employment

Based42%

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP

using IPUMS-CPS.

12

Health Coverage by Age- All Mississippi Children

21,078 87,444 110,46778,835

16,776 95,261 133,838147,607

39,693 55,28222,8826,499

0%10%20%30%40%50%60%70%80%90%

100%

<1 1 - 5 6-12 13-18

Uninsured

Private

Public

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

13

Health Coverage by Location- All Mississippi Children

0

50

100

150

200

250

300

350

400

450

500

Non-Metro Area Metro - Central City Metro - Outside Central City Metro - City Status Unknown

Th

ou

san

ds

Public Private Uninsured

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

14

Race/Ethnicity by Type of Coverage- All Mississippi Children

46%

11%

21%

3%

18%

53%

11%

34%

0%

10%

20%

30%

40%

50%

60%

Hispanic Native American African-American White

Percentage of theCategory Who AreUninsured

Percentage ofUninsured Who Arein the Category

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

15

Health Coverage by Poverty Level- All Mississippi Children

Public coverage highest for children with most poverty

Private coverage highest for children with least poverty

Uninsurance highest for children with most poverty

0

50

100

150

200

250

<100% 101-200% 201-300% 301%+

Th

ou

sa

nd

s Public

Private

Uninsured

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

16

Health Coverage by Type – Low Income Mississippi Children

Half of low income children covered by public insurance

Nearly1 in 4 low income children are uninsured

1 in 5 covered by employment based private insurance or privately purchased insurance

Public Only50%

Private & Public6%

Private - Employment

Based14%

Military3%

Private - Purchased

5%

Uninsured22%

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Uninsured Children by Potential Eligibility Based on Age & FPL- All Mississippi Children

SCHIP38,78431%

201-300% FPL 18,67715%

Above 300% FPL 13,677 11% Medicaid

53,218 43%

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

3 out of 4 uninsured children live in families whose incomes would qualify them for public (Medicaid or SCHIP) coverage

26% of uninsured children have family incomes above thresholds to qualify for Medicaid or SCHIP

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Uninsured Children by Age Group- All Mississippi Children

Range of uninsurance: 11% in 1-5 year olds & up to 20% in 13-18 year olds

13 to 18 year olds show highest uninsurance

15%

11%

20%

14%

0%

5%

10%

15%

20%

25%

<1 1 - 5 6-12 13 - 18

Per

cen

t Un

insu

red

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

19

Uninsured Children by Citizenship Status- All Mississippi Children

Almost 100% of MS uninsured children are U.S. citizens

Only 4% are non-citizens

Citizen96%

Not a Citizen4%

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Uninsured Mississippi Children by Work Status of Adults in Household

78% uninsured children live in households where at least 1 adult works

In 95% of these working households, at least 1 adult works full-time

Adult Working Part-Time Only

4%

Adult Working Full-Time

74%

No Adult Working22%

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Reported Health Status by Type of Coverage- All Mississippi Children

Public

Private

Uninsured

All

Excellent (1) or Very Good (2) Good (3) Fair (4) or Poor (5)

Average Score

1.88

2.04

1.64

2.14

Source: 2005, 2006, and 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Trends: Change in Children’s Insurance by Type of Coverage, 2000-02 vs. 2004-06

Decrease in private coverage

Small drop in public coverage

Increase in number of uninsured -11.7%

34.7%

-1.1%

-20%

-10%

0%

10%

20%

30%

40%

Private Public Uninsured

Source: 2005, 2006, & 2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Trends: Percent Change in Uninsured Children by Federal Poverty Level, 2000-02 vs. 2004-06

61%

-12%-5%-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

< 200% FPL 201 - 300% FPL 301%+FPL

Source: 2001-2003 & 2005-2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

Uninsured at higher income levels dropped

Low income uninsured increased 61% during same period

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Trends: Percent Change in Uninsured Children by Income Level, 2000-02 vs. 2004-06

State’s increase in uninsured children was due entirely to increased uninsurance in low income families.

35%

61%

-8%

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

Uninsured

All Children

Low Income(<200% FPL)Children

Higher Income(201+% FPL)Children

Source: 2001-2003 & 2005-2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Trends: Uninsured Rate of Children by Federal Poverty Level, 2000-02 vs. 2004-06

14%

23%

13%

21%

15%

12%

5% 6%

11%

15%

0%

5%

10%

15%

20%

25%

Perc

ent U

nins

ured

<100% 101-200% 201-300% 301%+ All

2001-03 2005-07

Source: 2001-2003 & 2005-2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Trends: Percent Uninsured Mississippi Children by Race/Ethnicity, 2000-02 vs. 2004-06

18%

46%

18%21%

14%

18%

8% 11%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Nu

mb

er U

nin

sure

d

Hispanic Native American African American White

2000-02 2004-06

Source: 2001-2003 & 2005-2007 Current Population Survey data compiled by the C4MHP using IPUMS-CPS.

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Employment-based Health Coverage in Mississippi by Firm Size, 2005

45% of all private firms offer health coverage to employees

Most large firms offer health insurance (93%)

Few small firms offer health insurance

74% of all private firms are small

21%28%

93%

0%10%20%30%40%50%60%70%80%90%

100%

<10 Employees <50 Employees 50+ Employees

Source: Medical Expenditure Panel Survey, Agency for Healthcare Research & Quality.

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Health Insurance Enrollment: Full-Time & Part-Time Employees in Private Establishments

57%

62%62%62%62%

2%3%6%8%6%

0%

10%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004 2005

Full Time

Part Time

Source: 2002 - 2007 Medical Expenditure Panel Survey, Agency for Healthcare Research & Quality.

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Health Insurance Enrollment: Employees in Private Mississippi Establishments

81%84% 82% 80% 82%

64% 64% 62%65%

59%

52% 51% 51% 52%47%

18% 18% 16% 18%15%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2001 2002 2003 2004 2005

EmployeesOffered HealthIns.

EmployeesEligible for HealthIns.

EmployeesEnrolled in HealthIns.

Employees withFamily Coverage

Source: 2002 - 2007 Medical Expenditure Panel Survey, Agency for Healthcare Research & Quality.

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Health Insurance Enrollment: Employees in Private Establishments in MS by Size of Firm

Percentage of Employees Enrolling in Health Insurance by Size of Firm

55%

17%

62% 60% 62% 64%

29% 29% 29% 28%24%

23%26%18% 19%

0%

10%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004 2005

Establishments of 50or More Employees

Establishments < 50Employees

Establishments < 10Employees

Source: 2002 - 2007 Medical Expenditure Panel Survey, Agency for Healthcare Research & Quality.

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Average Family Premium/ Employee Contribution, Private Establishments Offering Health Insurance

$7,258

$1,753

$7,525

$1,777

$8,075

$2,328

$9,188

$3,027

$9,987

$2,811

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

2001 2002 2003 2004 2005

Avg. FamilyPremium

Avg. EmployeeContribution forFamily Premium

Source: 2002 - 2007 Medical Expenditure Panel Survey, Agency for Healthcare Research & Quality.

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Why is health insurance important?

Uninsured children are less likely to receive timely care.

Coverage provides access to the health care system where health problems can be detected and treated early.

Delayed identification and treatment of health risks & problems may affect a child’s mental, physical, & emotional health.

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Risks Associated with Lack of Insurance Three times more likely not to have seen a

doctor in the past year; More than thirteen times more likely to lack a

usual source of medical care; Almost five times more likely to have a delayed

or unmet health care need; Five times more likely to have an unmet dental

need; and Five times more likely to have an unmet vision

care need.

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Impact on Health Status

Very difficult to evaluate due to compounding factors:Adverse selectionChurningPoint-in-time measurements

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The “Hidden Tax”

Health care costs not covered by the uninsured are shifted to other payers.

Approximately 35 percent of charges are paid out-of-pocket by the uninsured.

Of the amount shifted to other payers, about 1/3 is paid by government programs & 2/3 paid through higher health insurance premiums.

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Vicious Cycle

Providers cost shift to third party payers

Health Insurance Premiums Rise

Employers & employees drop coverage

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So…

If it benefits everyone for all children to have health insurance coverage, why isn’t it a priority?

Who is going to pay for it?

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Important Concepts

ChurningCrowd-out

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Churning

Insurance coverage is dynamic, not static. People move between pubic and private

coverage, and they gain and lose coverage.

This shifting among various coverage options is generally referred to as “churning.”

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Significance of Churning

It complicates the measurement of the uninsured.

It contributes to crowd-out of private coverage (every break in coverage provides an opportunity to shift to public coverage).

It adds to administrative costs. Gaps in coverage are associated with poor

access to health care.

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Measuring Churning

Most of the research focuses on children with public coverage.

Measurement is complicated by retroactive coverage under Medicaid and transitions between Medicaid & SCHIP.

Research shows that almost half (45.4%) of children losing Medicaid are still eligible.

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Causes

Research indicates that families’ failure to submit renewal paperwork on time and administrative delays after submission play major roles in loss of coverage.

Many of these children are re-enrolled after a short period of time.

43

Crowd-Out

Increasing eligibility for public programs generally results in some persons with private coverage dropping their private insurance and enrolling in the public program.

This occurrence is referred to as crowding out private insurance.

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Common Crowd-Out Pathways

A person drops private coverage for public coverage.

A public program enrollee refuses an offer of private coverage.

Employers encourage crowd-out.

45

Defining Crowd-Out

Researchers do not agree on the definition of crowd-out.

Some consider it to include any shift from private coverage to public coverage.

Others only include shifts that would not have occurred in the absence of the public program.

46

Measuring Crowd-Out

There is no standard measure and the range of estimates is large (0% to 60%).

The Congressional Budget Office reviewed the wide range of research and concluded that crowd-out due to SCHIP was between 25% and 50%.

The risk of crowd-out is greater for higher income families.

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Significance of Crowd-Out

Vetoed legislation to reauthorize SCHIP included authorization to expand eligibility from 200% FPL to 300% FPL.

In Mississippi, there are approximately 19,000 uninsured children with family incomes between 200% and 300% FPL.

There are over 100,000 children with private insurance in this income category.

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State Strategies to Reduce the Number of Uninsured Children

Enrollment Simplification & Outreach Premium Assistance Three-Share Premium Programs Reinsurance Risk Pool Models Eligibility Expansion Tax Credits

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Enrollment Simplification & Outreach Research shows that parents of eligible children

are often unaware that their children may be eligible.

The application and eligibility determination process can also present barriers to uninsured families.

States that simplified enrollment & conducted outreach significantly increased the number of eligible children enrolled.

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Premium Assistance

Many low income families with the option of employer coverage do not enroll because of the premium cost.

Premium assistance programs use public funds to subsidize private health insurance premiums for eligible families.

Premium assistance programs are cost effective and encourage parents to be covered as well.

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Successful Premium Assistance Programs

Require applicants to enroll in public coverage for which they are eligible if the coverage is cost effective.

Develop strategies to offer wrap-around coverage.

Minimize the administrative burden on employers.

52

Three-Share Premium Programs

Premiums are shared three ways: Employer Employee Government Program

To contain costs, benefit packages are often restricted.

Limitation is the perception of an “affordable” premium.

Most low income individuals will not purchase health insurance if their contribution is more than 5% of their income.

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Reinsurance

Reinsurance is insurance for organizations that accepted risk, e.g. insurance companies or self-insured employers.

It is activated after a certain expenditure threshold is met, which could be for an individual or a group.

54

The “80/20” Rule

In any large group insurance plan, a small proportion of the plan members will be responsible for most of the costs.

Government reinsurance plans cover the costs for these outliers, thereby lowering premiums for the remainder of the group.

55

Risk Pool Models

Most states have established high risk pools to provide access to coverage for persons considered “uninsurable” in the commercial market.

States often subsidize coverage for these individuals to reduce the premiums.

These programs improve access for a large number of persons, but are not a viable solution for low income families without additional subsidy.

56

Eligibility Expansions

Some states have attempted to cover more uninsured children by raising eligibility limits for public programs like Medicaid & SCHIP.

Seventeen states have extended the upper limit to 300% or 350% FPL.

Illinois is in the process of implementing universal coverage for children.

57

Tax Credits

In addition to serving as a way to subsidize health insurance coverage for the uninsured, tax credits may address current inequities in tax policies that discriminate against individuals that self-insure.

The number of individuals that are likely to benefit from this approach is relatively modest.

58

Potential Policy Options

Administrative Simplification & OutreachMost cost effective approach

Most of the uninsured children in Mississippi are already income-eligible for existing public programs.

These programs are highly subsidized by the federal government.

59

Administrative Simplification

States’ experiences clearly document that simplifying enrollment procedures facilitates enrollment of eligible children.

Enrollment simplification & outreach can be implemented without compromising program accountability and integrity.

60

Other Strategies

Eligibility expansions increase the risk of crowd-out and are less cost effective.

Premium assistance, shared premium programs, and tax credits are feasible for families that have access to private insurance.

These programs tend to discourage crowd-out and should be part of a comprehensive effort to encourage small employers to offer or retain health insurance coverage for their employees.

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Subsidies

To expand coverage through private insurance, subsidies must be sufficient to lower premiums to an “affordable” level.

Research in Mississippi in 2005 indicated the perceptions of “affordable” premiums: $40 - $70 per month for low income workers Up to $50 per month per employee for small

employers.

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Subsidy Cost

The average annual group premium for small employers in Mississippi in 2005 was $4,033 for single coverage & $9,964 for family coverage.

It would likely take an annual subsidy in the range of $2,500 for single coverage & $8,500 for family coverage to induce low income employees & small employers to participate.

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Cost Effectiveness

The cost of expanding coverage is the biggest barrier to implementation.

Use of federal funds is most cost effective for the state.

For strategies not eligible for federal funding, use of employer contributions improves cost effectiveness.

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Value

What is the cost of covering uninsured children compared to the cost of leaving them uninsured?

Short-term cost vs. long-term cost Direct cost vs. “hidden” cost

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The Balancing Act

Policy decisions must balance conflicting objectives and minimize unintended consequences.Access vs. accountabilityEfficiency vs. equityBenefit structure must balance cost, access, &

quality.

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More Information on the Web Site

www.mshealthpolicy.com