Health Insurance for Children:

State and Private Programs Create New Strategies to Insure Children

HEHS-96-35: Published: Jan 18, 1996. Publicly Released: Feb 20, 1996.

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Pursuant to a congressional request, GAO reviewed state and private efforts to insure children who are not eligible for Medicaid and whose parents cannot purchase private insurance, focusing on: (1) enrollment, costs, funding sources, and annual budgets of these state and private programs; (2) state strategies to manage costs while providing children access to health care; and (3) program design elements that have facilitated program implementation.

GAO found that: (1) by 1995, 14 states and at least 24 private-sector entities had programs to increase health care access for uninsured children; (2) the number of children enrolled in the state programs reviewed ranged from 5,000 to over 100,000 children and state budgets ranged from $1.7 million to $55 million; (3) private-sector programs enrolled up to 6,000 children and had budgets of $100,000 to $4.3 million; (4) state program funding sources included state general revenues, donations, and small insurance premiums and copayments; (5) budget limitations have reduced the number of Medicaid-eligible children served and have forced these programs to cap enrollment and place eligible children on waiting lists; (6) the programs' per-child costs ranged from $20 to $70.60 per-month; (7) state programs have attempted to reduce costs by limiting eligibility and covered services, relying on Medicaid to provide inpatient care, and using patient cost-sharing, managed care, and competitive bidding among insurers; (8) state efforts to attract providers included using insurers' existing payment systems and physician networks and paying near-market reimbursement rates, while their efforts to attract families included guaranteeing patient access to providers, having simple enrollment procedures, and avoiding the appearance of a welfare program; and (9) surveys showed that families were generally satisfied with state insurance programs, since the programs increased childrens' access to appropriate health care services.

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