Sunday, May 11, 2008

National Association of Health Underwriters - Protecting the Consumer's Future


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The Balanced Act of 1997 Title XXI
Social Security Act Children's Health Program

The Balanced Budget Act of 1997, HR 2015, authorizes the following dollars for Children’s Health Insurance Programs through an enhanced match of state expenditures:

1998 —$4,275,000,000

1999—4,275,000,000

2000—4,275,000,000

2001—4,275,000,000

2002—3,015,000,000

2003—3,015,000,000

2004—3,015,000,000

2005—4,005,000,000

2006—4,005,000,000

2007—5,000,000,000

The Act authorizes amounts for a ten year period, but the budget bill can only authorize spending for a five year period.

75% of the above funds is authorized to the states and 25% is allotted to the territories and commonwealths. The allotment formula is weighted heavily towards states with high numbers of uninsured children in the earlier years.

Funding is available October 1, 1997, for states with approved plans, but the new law allows each state to access its fiscal year 1998 allotment for three years for expenditures on children’s health insurance coverage under Title XXI. States are required to submit plans for approval by the Secretary no later than July 1, 1998 detailing the intended use of the funds. A state plan is considered approved in 90 days unless the Secretary notifies the state in writing that the plan is disapproved or that additional information is needed. States may amend their plans, but will be obligated to continue provide benefits once a plan is in place until a plan amendment is filed.

Pennsylvania, Florida, and New York are the only states with approved plans meeting benefits requirements on the date of enactment.

Eligibility

1) Children may not be eligible for Medicaid and must be from families with income up to 200% of poverty

If state’s Medicaid eligibility level is higher than 200%, not more than 50 percentage points higher than the state’s rate as of 6/1/97

A state may not establish eligibility standards that are more restrictive than those in effect on June 1, 1997

A state may cover children ages 13-19 who did not qualify for Medicaid as of 4/15/97

Children must be under age 19

2) Not eligible are:

a prison inmate

an inpatient in a psychiatric facility

a child who is eligible for health insurance coverage through a state health benefits plan on the basis of employment wit a public agency.

Plan Options

Health benefits coverage that is equivalent to the benefits coverage in a benchmark benefit package. The benchmark packages are as follows:

Federal Employees Health Benefits Program. This program is the standard Blue Cross/Blue Shield preferred provider option service benefit plan. It provides unlimited inpatient care except for a limit of 100 days of mental illness care, and one treatment program per lifetime for substance abuse (28 day maximum). Outpatient coverage is provided for prescription drugs, some dental care, emergency care, surgical services, medical services, maternity services, well child care and 25 mental health/substance abuse visits per year.

State Employee coverage. A health benefits coverage plan that is offered and generally available to state employees.

Coverage offered through an HMO. The plan offered by the HMO with largest insured commercial, non-Medicaid enrollment of covered lives in the state.

The actuarial equivalent to one of the benchmark packages. It must include the following "basic services": inpatient and outpatient hospital services; physicians’ surgical and medical services; laboratory and xray services; and well-baby and well-child care, including age-appropriate immunizations. In addition, the following services must be provided in a manner equal to at least 75% of the actuarial value of the selected benchmark package: prescription drugs, mental health services, vision services and hearing services. States may provide more generous benefits.

Medicaid Expansion

States are also allowed to request waivers from the above requirements if it will allow them to insure more children, but must wait for approval before implementing the alternate plans. The Secretary is currently discouraging waivers from the designated choices until more experience is available with the program. States may also use of combination of Medicaid and Private Sector options.

Preexisting Conditions

States may not impose preexisting conditions exclusions, in determining whether assistance for premiums is available. Gray area here for private sector plans which may be established on an individual basis. Law only says group plans may impose preexisting conditions limitations.

A state MAY choose to allow benefits to be provided through payment for, or a contract with, a group health plan or through group health insurance coverage. The plan may impose preexisting conditions exclusions, according to the provisions of HIPAA.

Cost Sharing

Children with family incomes at or below 150% of poverty can be charged no more than the same small amounts for premiums, deductibles, co-payments that are permitted for adults under Medicaid. Children with family incomes over 150% of poverty can be charged on a sliding scale, but total payments may not exceed 5% of family income. Well-baby care, well-child care and immunizations are exempt from any cost sharing.