Medicaid buy-in programs are particularly important for underinsured CYSHCN, because they allow families to purchase Medicaid benefits, specifically to cover services that are not covered or are covered inadequately by employer-sponsored insurance plans. Note that buy-in is not an option for privately insured children under CHIP; only uninsured children can buy-in to CHIP.
A few states have operated Medicaid buy-in programs for underinsured children for many years. The Massachusetts program is limited to children who meet Supplemental Security Income (SSI) clinical eligibility criteria, while the Vermont buy-in program is available to any underinsured child. With the recent passage of the Family Opportunity Act (FOA), these Medicaid-buy-in programs are spreading across the country.
Massachusetts’ CommonHealth program, implemented in 1988, is one of the oldest Medicaid buy-in programs in the country. CommonHealth serves both adults and children. Participants must meet SSI clinical eligibility criteria, but family income is disregarded in determining eligibility for children. Families pay a premium on a sliding scale, based on income and on whether the family is purchasing full coverage for a child who is uninsured (and thus receives the full Medicaid benefit package) or partial coverage for a child who has private insurance, and needs Medicaid to cover wrap-around benefits.
The Massachusetts buy-in program does not have an income eligibility ceiling; however, at a certain point the rising cost of the premiums may deter even families with higher income from participating.
Vermont operates a Medicaid buy-in program for children with family income at 225% – 300% of the Federal Poverty Level (FPL) who have private insurance but need Medicaid for services such as personal care, dental care or prescription drugs.
In Vermont, the buy-in program reflects a policy aimed at discouraging low-income, privately insured families from dropping their commercial coverage to become uninsured so they can obtain CHIP benefits for their children. When families drop private coverage to obtain public coverage, this is called “crowd out” and is a major concern that policymakers want to avoid.
Louisiana and North Dakota have implemented Medicaid buy-in programs under the Family Opportunity Act. Louisiana’s program began in October 2008 for children whose family income is below 300% of the FPL. Premiums are based on a sliding fee scale, set at $12-$30 per month for families within the 201-250% FPL range and $15-$35 for the 251-300% FPL range. As of February 2010, there were 542 children enrolled.
North Dakota implemented their FOA Medicaid buy-in option in April 2008. The buy-in program is open to all children who are determined to be disabled by the Social Security Administration or the state review team and have net family income of 200% of the FPL or less. The premiums for the program are set at 5% of a family’s gross monthly income. Texas has just implemented its FOA Medicaid buy-in program as of January 1, 2011.
Iowa implemented an FOA Medicaid buy-in program under the name “Medicaid for Kids with Special Health Care Needs” effective January 1, 2010. The Iowa program allows uninsured and privately insured children whose family income is under 300% of the FPL to enroll with no premiums.
Illinois has passed FOA Medicaid buy-in legislation but has not yet implemented a program.
Resources Related to Medicaid Buy-ins
- TEFRA and FOA Medicaid Buy-in Programs: An Educational Worksheet from the Catalyst Center
- Case Study: Buying into a Medicaid Buy-in Program: The Texas Experience
- The Family Opportunity Act’s Medicaid Buy-in Option: What We’ve Learned
- Frequently Asked Questions about the Family Opportunity Act’s Medicaid Buy-In Option
- Reducing Under-Insurance for Children and Youth with Special Health Care Needs