Premium Assistance

Premium assistance programs are an example of a strategy states can use to ensure children and youth with special health care needs (CYSHCN) have adequate insurance coverage (adequate insurance is defined as that which provides access to needed providers and benefits, and the out-of-pocket costs are reasonable [1]). In premium assistance programs, an agency pays all or part of a family or child’s health insur­ance premium. These programs are often implemented for low-income working families who cannot afford the expense of family coverage under an employer-sponsored plan. Premium assistance programs have grown in popu­larity with the advent of the Children’s Health Insurance Program (CHIP), in part as a strategy to ensure that low-income families do not drop their employ­er-sponsored coverage in order to obtain less costly CHIP coverage for their children, and also to help support families to keep working.

As of January 2017, 37 states have premium assistance programs that are administered under state Medicaid and/or CHIP programs [2]. Using a formula that determines cost-effectiveness for the state, Alabama Medicaid provides a Health Insurance Premium Program, not just for CYSHCN, but for any resident who is eligible for Medicaid and who has access to employer-sponsored insurance.

In Georgia, two premium assistance programs, the Georgia CHIPRA and the Health Insurance Premium Payment (HIPP) program both help families pay their employer-sponsored insurance premiums when their children are also eligible for Medicaid.

The Massachusetts Medicaid program provides premium assistance for eligible members who have qualifying private coverage, which means that the plan must meet a minimum set of covered benefits. For MassHealth eligible members on Standard (Medicaid) or CommonHealth (the Medicaid Buy-In), qualifying private coverage can be purchased through an employer, COBRA administrator, or an unsubsidized Health Connector (the Massachusetts Marketplace) child-only individual plan. If members have health insurance through one of these sources that does not cover the minimum set of benefits, the member will not be required to enroll in the private insurance and will instead be eligible for full MassHealth coverage. If an applicant is uninsured, MassHealth investigates to see if the individual or family has access to qualifying insurance. If so, MassHealth may require them to enroll in it. For CYSHCN, if qualifying private insurance does not cover a MassHealth covered benefit, Medicaid will pay for that service.

South Carolina Medicaid has a Health Insurance Premium Payment Program (HIPP) for individuals who have private insurance and who are also eligible for Medicaid, including children with disabilities who are eligible for the state’s TEFRA program. The Medicaid agency assesses the cost-effectiveness of paying for private insurance premiums for an individual or family and reevaluates the cost effectiveness of doing so every 6 months. Individuals who are eligible for premium assistance remain under fee-for-service coverage and are not enrolled in a managed care plan.

Medicaid-enrolled individuals in Texas can qualify for the state’s Health Insurance Premium Payment (HIPP) program. The program reimburses the cost of premiums for families if it is found to be cost-effective for the state to pay for their cost sharing, co-payments, deductibles, and other expenses, rather than pay the full cost of their health services under Medicaid. Through Texas HIPP, individuals eligible for Medicaid who have access to employer-sponsored group health insurance can access health care through the group health insurance, and Medicaid reimburses the client for their insurance premiums and pays Medicaid-enrolled providers for associated coinsurance and deductible costs for Medicaid-covered services. If cost-effective, Medicaid may reimburse families for the full cost of their family coverage, not just for the members who receive Medicaid benefits. Families with self-funded employer plans do not qualify for HIPP.

In addition, the Children with Special Health Care Needs (CSHCN) Services Program, offered through the Texas Health and Human Services Commission, has an Insurance Premium Payment Assistance (IPPA) program that helps families keep their private health insurance coverage. This service is only for CYSHCN who are not eligible for premium assistance through Medicaid.

Some Title V programs also provide premium assistance for CYSHCN. For example, in Alabama, when a client who receives Title V/CSHCN services becomes eligible for COBRA and the family cannot pay for it, and the family is also eligible for Title V purchased services, the Title V/CSHCN program will pay the COBRA premium when it is more cost-effective for the agency to do so. 

Michigan’s Children’s Special Health Care Services Insurance Premium Payment Benefit program is available to assist families in maintaining their private insurance coverage. The department reviews the family’s insurance and financial information to assess the combined risk and need versus benefit of paying a family’s private health insurance premium. If the family can demonstrate a financial need, and it is determined that the cost of the premium payments is less than the cost associated with the claims for the qualifying diagnosis, then the family is deemed eligible to receive the insurance premium payment benefit, which helps ensure children receive much needed specialty medical care and treatment.

In addition to premium assistance, some Title V programs still act as a payer of last resort, providing financial assistance to families with CYSHCN to ensure they are receiving needed services, while reducing families’ out-of-pocket costs.

In Georgia, Title V funds are used for eligible families enrolled in the Children and Youth with Special Health Care Needs (CYSHCN) program to pay for deductibles and co-payments for covered services as well as certain medical services that are not covered. Eligible families under 150% of the FPL receive immediate assistance with these out-of-pocket expenses. Families over 150% FPL are assessed a cost participation fee based on family size and reported income. The participation fee is the amount a family must spend on out-of-pocket expenses for deductibles, coinsurance, and copayments for covered services plus all costs for medical services that are not covered before they are eligible for assistance for out-of-pocket medical expenses for their child with special health care needs.

 Because Early Intervention Part C is part of Mississippi Title V, the Department of Health is the payer of last resort for children ages 0-3 with developmental delays, covering such out-of-pocket expenses as copays and deductibles.

Special Medical Services (SMS), the New Hampshire Title V/CSHCN program, does not offer premium assistance, but there is financial assistance for families enrolled in SMS’ programs who meet the identified financial eligibility criteria. Financial eligibility is determined by a formula that is based on federal guidelines, but also considers a family’s total out-of-pocket costs for health care, not just for the individual child’s costs. This total cost is deducted from the family’s reported income along with the cost of premiums when SMS calculates their eligibility for financial assistance. Financial assistance can then be utilized for the child’s health care-related costs associated with his or her plan of care. While financial assistance does not generally apply to premiums it can be used to help with co-pays and deductibles (if these costs were not applied to the financial eligibility determination).

In South Dakota, Title V has a program called Better Health for Kids with Chronic Conditions or KiCC for short. If a child is eligible for the KiCC program, Title V uses its funding to cover co-pays, deductibles, and co-insurance for the eligible chronic condition at 100%, so families do not have any out-of-pocket costs associated with the chronic condition.

Other states provide premium assistance using a range of models. The Health and Human Services agency in Nebraska funds a Health Insurance Premium Payment (HIPP) program for individuals, including children, on Medicaid waiver programs who are dually enrolled in private health insurance and Medicaid. The state will pay the private health insurance premiums if it is cost-effective to the state to do so. The decision is made by a review of the individual’s insurance explanations of benefits (EOBs) for a year. If payment of the premium saves the state Medicaid funds, then the state will pay it. In Rhode Island, there is a state premium assistance program that pays a portion of the monthly premiums for families who purchase Marketplace plans. This is in addition to any tax credit help they may receive through the Marketplace.  South Dakota has a limited insurance premium assistance program for individuals on Medicaid with annual health care expenses of $20,000 or more. Decisions are made on a case-by-case basis, considering the cost of private insurance premiums against projected Medicaid savings for the state. The Utah Premium Partnership (UPP) program helps make health insurance more affordable for working individuals and families who do not currently have health insurance by helping to pay the monthly premiums when a family enrolls in an employer’s health insurance plan or COBRA coverage.

[1] The Data Resource Center (DRC). (2011). Adequate Insurance to Cover Needed Services. Retrieved April 6, 2017 from http://childhealthdata.org/docs/cshcn/outcome-3.pdf?Status=Master.

[2] U.S. Department of Labor, Employee Benefits Security Administration, Premium Assistance under Medicaid and the Children’s Health Insurance Program (CHIP) OMB Control Number 1210-0137 (expires 12/31/2019) (current as of January 31, 2017). Retrieved April 6, 2017 from https://www.dol.gov/sites/default/files/ebsa/laws-and-regulations/laws/chipra/model-notice.pdf

Resources Related to Premium Assistance