The Impact of Premiums on Wisconsin’s BadgerCare Program

P.O. Box 12194 · 3040 Cornwallis Road · Research Triangle Park, NC 27709Phone: 919-541-6816 · Fax: 919-990-8454 · nathanwest@rti.org · www.rti.org

RTI International is a trade name of Research Triangle Institute.

Presented at AcademyHealth Annual Research Meeting, June 6-8, 2004

Presented by Nathan West, MPA

ContributorsNorma Gavin, PhD, Jamie Chriqui, PhD, Nancy Lenfestey, MHA

Funded by the Centers for Medicare and Medicaid Services (CMS). Presentation does not necessarily reflect CMS views or policies.

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BadgerCare is

A Medicaid demonstration program in Wisconsin designed to bridge the gap between Medicaid and private insurance for the working poor.

Supported by a combination of federal and state matching funds under: Section 1115 Medicaid Waiver, and State Children’s Health Insurance Program.

Eligibility: must have income below 185% of FPL (200%

or below once enrolled) not be enrolled in Medicaid or covered by

employer-sponsored or other health insurance

be under age 19 or a parent (spouse) of a child under age 19

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Premium Paying Families in the BadgerCare Program

At the time of survey administration, families with incomes over 150% of the FPL paid monthly premiums of 3 percent of their income (premium amount now 5 percent of their income)

As of May 2002, 9% of BadgerCare families had income over 150% of the FPL and were paying premiums

IncomeN’s

(family) Percentage

Below 68% of FPL 11,574 18.5%

68%-150% of FPL 45,396 72.2%

Above 150% of FPL 5,848 9.3%

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Importance of Studying the Impact of Premiums on a

SCHIP Program Existing literature provides indication that as

premiums increase as a percentage of income, fewer low income families buy insurance

State budget shortfalls have forced policy makers to restrict benefits, control enrollment or require more cost-sharing from beneficiaries

Since 2003, 24 states have made policy changes in areas of eligibility, enrollment, benefits and cost sharing

Wisconsin one of 20 states to recently require premiums or increase the premium amount

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Research Questions and Hypotheses

Have premiums deterred eligible families from enrolling in BadgerCare? We hypothesized that premiums would be

one of several important factors deterring families from enrolling BadgerCare.

Have premiums caused additional churning or turnover in the program? We hypothesized that churning and

turnover would be higher among premium-paying families because of difficulties in paying premiums

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Research Questions and Hypotheses

Have premiums caused dissatisfaction among premium-paying families? Does the amount seem reasonable? Site visit interviewees and focus group

participants believed that the premium was reasonable in light of private coverage options.

Have premiums been a major reason for program disenrollment? We hypothesized that premiums would be

a major factor in premium-paying families decisions to disenroll.

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Data Sources

Enrollment Data Administrative enrollment records for

families enrolling in BadgerCare from 10/99 – 9/02.

Surveys Telephone survey of eligible families:

Sample of enrolled and eligible non-enrolled families with children in the National School Lunch Program from selected counties Data collection May–Sept 2002 (59% RR)

Mail survey of premium-paying families disenrolled between 1/1/02–6/30/02: Data collection Aug–Dec 2002 (59% RR)

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Impact of Premium Payments on

Churning “Churning” – the process of repeatedly

coming in and out of a program. Can be disruptive to continuity of care, harmful

to health of vulnerable populations, and costly to administer

Identified episodes of enrollment active from Oct. 1, 1999 - Sept. 30, 2002; grouped them into premium paying and non-premium paying

Present Kaplan-Meier survival curves, which show the probability of remaining enrolled/disenrolled over a certain time period

Compared probability of remaining enrolled for new

episodes in the period probability of remaining disenrolled for

episodes ending during the period

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Premium-paying families were less likely than other BadgerCare families to remain enrolled at each time period, but the difference was relatively small and may be largely due to their greater likelihood of income increases that made them ineligible for coverage.

Probability of Remaining Enrolled among Premium-Paying and Other BadgerCare Enrollees

0

0.2

0.4

0.6

0.8

1

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33

Months Since Enrolled

Other BC Premium-paying BC

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Premium-paying families were less likely than other BadgerCare families to re-enroll in the first two years, but equally likely in the first half of the third year. Thus, premiums may have delayed reenrollment for some individuals due to a mandatory waiting period (6 months) but appear to have little effect in the long run.

Probability of Remaining Disenrolled among Premium-Paying and Other BadgerCare Enrollees

0

0.2

0.4

0.6

0.8

1

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33

Months Since Disenrolled

Other BC Premium-Paying BC

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Premiums were a deterrent to enrollment, but there were other more frequently cited reasons for not enrolling among all eligible non-enrollees

Reasons for Not Enrolling in BadgerCare Among Eligible Non-Participating Families

10%

17%

19%

31%

49%

20%

19%

9%

34%

0% 10% 20% 30% 40% 50% 60%

Couldn't understand the language

Couldn't afford premium

Couldn't leave job to apply

Waiting period to reapply

Application process complicated

Have other insurance

Thought family wasn't eligible

Couldn't get application paperwork

Found out family didn't qualify

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Premium-paying families reported that premium amounts were reasonable in amount. This is consistent with our case study findings, in which focus group participants considered premiums to be very reasonable relative to private insurance costs.

NSLP list: Are the premiums reasonable in amount?

"Premium-paying families"

11%

6%

83% Yes

No

Don't Know

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Problems paying the premium was the most frequently cited main reason for disenollment.

Main reason given for leaving BadgerCare

17%

15%

20%

22%

26%

0% 5% 10% 15% 20% 25% 30%

Don't know

Other reason for leaving

More income

Obtained health insurancefrom employer/other

Premium-related reason

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Among disenrollees who left BadgerCare because of problems paying premiums, 40% said they could not afford the premium.

Types of Problems in Paying the Premium

3%

11%

12%

34%

40%

0% 10% 20% 30% 40% 50%

No checking account

Other problems

Wages not withheld

Could not get premium paid on time

Could not afford premium

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Conclusions

We found no evidence that premium payments among premium-paying families increased churning relative to other BadgerCare families, but premiums do appear to be a significant contributing factor to turnover

We found little evidence that premiums significantly reduced program participation or satisfaction

Premiums were a major reason for disenrollment

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Implications for Policy or Practice

While our evidence suggests that most BadgerCare families who pay modest premiums are not dissatisfied or adversely affected, some families need temporary assistance in paying monthly premiums to prevent being involuntarily disenrolled and becoming uninsured.

We need to continue to monitor the impact of new or higher premiums for SCHIP coverage among low-income families, particularly in light of state budget shortfalls and a lagging economic recovery for the working class.