Increased Family Cost-Sharing in SCHIP:
How Much Can Families Afford?
Betsy Shenkman
Bruce Vogel
Institute for Child Health Policy
Department of Epidemiology and
Health Policy Research
University of Florida
June 25, 2005
Project Purposes


To examine the responsiveness of
disenrollment to premium changes and
child health and sociodemographic
characteristics in one state SCHIP;
To calculate a price elasticity for families
in the short-term
Study Setting

Florida Healthy Kids Program




5-19 year olds between 101% FPL and 200% FPL
receive subsidized premiums
Family share prior to July 1, 2003 was $15 per
family per month (PFPM)
Termination due to non-payment of premium after
two months
Until July 1, 2004, passive renewal process used;
so overall disenrollment in the program relatively
low
Program Changes



Premiums increased on July 1, 2003 from $15 per
PFPM to $20 PFPM for all families receiving
subsidized premiums
The Center for Medicare and Medicaid Services (CMS)
– exceeded Federal cost sharing limits for families at
or below 150% FPL
October 1, 2003 – premiums reduced back to $15
PFPM for those at or below 150% FPL; remained at
$20 PFPM for those above
Study Time Frame and Sample


Time frame for analyses – March 2003
through March 2004
Disenrollees – Children enrolled for at least
two months and disenrolled for at least two
months during the time period
Data



Enrollment files – months enrolled, age,
gender, address information, subsidy level
Health care claims and encounter data linked
to enrollment files
Clinical Risk Groups used to classify children
into health status categories

Healthy, Significant Acute, Minor Chronic,
Moderate, and Major Chronic Conditions
Analyses

Cox proportional hazards models were
used to estimate the responsiveness of
disenrollment to premium changes, age,
sex, income, CRG health status category,
and months enrolled.
Disenrollees From Healthy Kids N=237,178

Percent disenrollees
20%
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 Mar-04
Key Findings




With the $20 premium increase, families 2x as likely
to disenroll as before increase
The Price elasticity for the disenrollment hazard rate
of 2.2, was calculated
Given this price elasticity, a 10% increase in the
monthly premium would produce a 22% increase in
the disenrollment hazard rate
An increase in the premium from $15 per month to
$20 per month (a 33% increase), would increase the
disenrollment hazard rate by approximately 73%, or
from a baseline hazard rate of 1.4% to 2.4%
Key Findings



Families at or below 150% FPL 35% more
likely to leave compared to higher income
Rural areas 6% more likely to leave than
those in urban areas
Health status an important predictor – 8% to
17% less likely to disenroll with significant
acute or chronic condition than those who are
healthy
Conclusions



In the short-term, families are very price
sensitive
Cannot determine if this is an equilibrium
response but
Saw a large effect that perhaps could be
moderated across time
Policy Implications



Premium increases need to be considered very
carefully
At least in the short-term can have a strong
impact
Can differentially affect certain groups of
children