Fee hike makes kids’ insurance a challenge

USC (US) — Analysis shows that a public program’s higher premiums cost 20 percent of enrolled children their health insurance coverage.

Nearly 4,500 low-income immigrant children, or 20 percent of overall membership, dropped out of a public health insurance program in Los Angeles County due to a premium increase, according to a 30-month analysis led by University of Southern California (USC) researchers.

The research shows that while most families paid a higher premium to keep their children insured, other families were unable to do so. The study is published in the journal Health Affairs.


“It isn’t surprising that a substantial portion of participants dis-enrolled, but rather that a large percentage found a way to stay with the program,” says the study’s principal author, Michael R. Cousineau, associate professor of family medicine and preventive medicine at the Keck School of Medicine of USC.

“These results speak to the strong importance these parents place on retaining coverage.”

Cousineau and his team examined the county’s Healthy Kids program, a comprehensive, full-risk plan established in 2003 that, at its peak, served more than 45,000 children ages 0 to 18.

Administered by L.A. Care Health Plan, the program has shrunk due to state budget cuts, closing enrollment to new applicants ages 6 to 18 in 2008 and increasing monthly premiums to $15 per child ($45 maximum per family) for the same age group in 2010. Members of the plan had been paying $0 to $6 in premiums per child, depending on income.

The researchers compared two groups of children, those ages 6 to 18 (subject to a premium increase) and those ages 0 to 5 (who were not subject to an increase). The researchers compared average monthly enrollment and retention rates from January 2009 to June 2011. Premiums increased on July 1, 2010.

Membership declined for both age groups over the course of the study, but more drastically in the older group subject to premium increases. Retention in the younger group stayed steady at 95 percent before and after the increase, while that in the older group dropped nearly 5 percentage points to 93.8 percent after the premium change.

At the end of the study, 59 percent of the older group’s July 2010 monthly enrollment was still in the program. The researchers expected that 80 percent of the children in the older group would still be enrolled after the increase, taking into consideration factors other than a premium increase. The difference between the observed and expected values is considered the effect of the premium increase.

The researchers did not ask parents why they dis-enrolled their children, nor did they have access to demographic factors such as income, race, or health status to help identify who was likely to retain coverage and who was not when faced with increased premiums.

Cousineau says that future research should analyze these and other factors to tailor specific interventions to children most likely to drop out. “Health reform provides new opportunities for expanding children’s access to health care,” Cousineau says.

“However, changes in federal, state, and local government policies may force health plans to consider increasing premiums. More research is necessary to determine the optimal level for premiums and to project what low-income families might do if they lose coverage.”

Co-authors include Howard Kahn of L.A. Care Health Plan and Kai-Ya Tsai of the Keck School.

The study was supported by funds from L.A. Care Health Plan.

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