You asked for (1) a summary of the recently passed Illinois law that offers health care coverage to the state’s uninsured children and (2) how this new law compares to the HUSKY program.

SUMMARY

Illinois’ recently enacted law attempts to provide universal health insurance to the state’s 253,000 uninsured children. The Covering All Kids Health Insurance Program (hereinafter All Kids) allows parents to buy into the state’s existing publicly funded health care system (KidCare, which includes both Medicaid and the State Children’s Health Insurance Program, SCHIP). It goes into effect on July 1, 2006.

One of All Kids’ most significant features is the health care delivery model it uses. Families in both All Kids and KidCare will choose a primary care case manager (PCCM) who serves the child’s primary care needs and makes referrals for specialty care. (In some instances, the specialists will serve as the case manager when the patient has a chronic health condition. ) This model attempts to ensure that children get the health care treatment they need early to avoid more costly, acute care later on. Under the existing system, most children in Illinois receive their health care on a fee-for-service basis, with little, if any, care management. The state estimates saving $ 56 million in the first year from moving to the PCCM model.

The HUSKY program offers subsidized health care to children in families with incomes under 300% of the federal poverty level (FPL) and unsubsidized care to children whose family income is higher. Connecticut’s income limits are substantially higher than those in Illinois existing subsidized care program. But once families reach the 300% level, they must buy into the unsubsidized program, and the monthly premiums for doing so are substantially higher than the premiums All Kids families will pay. HUSKY families enroll with one of four managed care organizations (MCOs) in HUSKY A (three in HUSKY B) for their health care. These families must choose a primary care provider (PCP) from a list the MCOs provide, who is expected to do care management.

ILLINOIS LAW

PA 094-0693 created the Covering All Kids Health Insurance Program, which goes into effect on July 1, 2006. It directs the Department of Healthcare and Family Services (DHFS) to run the program and coordinate it with existing health programs it runs, collectively called KidCare.

Eligibility

To qualify for All Kids, a child must be a state resident, ineligible for medical assistance under the state’s KidCare program (Medicaid- or State Children’s Health Insurance Program-funded programs), and uninsured.

A child is considered uninsured if he:

The act permits DHFS to consider the affordability of dependent health care coverage when determining whether coverage is “available,” as called for in (3).

Once determined eligible, a child remains so for 12 months (after which time his eligibility is redetermined). Coverage ends once the child turns 19. Children who are incarcerated or admitted to a mental hospital or institution are ineligible.

The act directs DHFS to adopt eligibility rules, which must include, at least the following:

Agents to Help with Enrollments

The act requires DHFS to develop procedures to allow application “agents” to assist in enrolling children in All Kids and other health insurance programs it runs. DHFS can pay these agents based on the number of approved applications they facilitate.

Program Outreach

The act also permits DHFS to provide grants to the application agents and other community based organizations to educate the public about the program’s availability.

Benefits

The act requires the benefits in All Kids to be identical to those provided for children under the state’s SCHIP program. But it does not provide non-emergency transportation.

Subsidies

The act permits DHFS, as an alternative to enrollment, to offer subsidies to families who have access to private insurance, including that offered by employers, when it is cost effective to do so. It also allows the department to offer (1) partial coverage to children who are enrolled in a high-deductible plan and (2) a limited benefit package to children in families that have private insurance that does not cover certain services (“wrap around”).

Cost-Sharing

The act directs DHFS to set co-payments, coinsurance, and premiums for program participants. These amounts must be on a sliding scale based on family income. The department can modify periodically these amounts.

The act prohibits co-payments for well-baby and well-child health care, including age appropriate immunizations.

Information Sharing

The act directs the state’s insurers to provide health insurance data to help DHFS determine program eligibility. It requires DHFS, the Department of Financial and Professional Regulation, and the Division of Insurance to collaborate and adopt rules governing this information exchange. These rules must be consistent with all confidentiality laws, including the federal Health Insurance Portability and Accountability Act (commonly known as HIPAA).

Tracking Availability of Employer Sponsored Coverage

The act requires DHFS to monitor the availability and retention of employer-sponsored dependent health insurance coverage. And it must modify the crowd-out periods if necessary to promote families’ (1) retaining private or employer-sponsored coverage and (2) timely access to health care. It cannot make the crowd-out period less than six months.

Disenrollment

Under the act, children lose their coverage if their premiums are not paid in a timely fashion. It limits the program’s liability for paying for benefits to the period for which premiums were paid. In addition, children are locked out of the program for at least three months if they are disenrolled for this reason.

Payments to Providers

The act specifies that any rates DHFS pays (presumably to health care providers) can not be used to determine the usual and customary or reasonable charge. This provision would presumably be targeted at health insurers.

Consulting with Stakeholders

The act requires DHFS to present its implementation plan to the Medicaid Advisory Committee, which serves as a forum for providers, advocates, consumers, and other interested parties to advise the department on the program.

Federal Financial Participation

The act requires DHFS to request any necessary state plan amendments (to its Medicaid or SCHIP programs) or waivers to allow it to use federal funds to offset some of the program’s costs. But failure to secure such federal aid may not stop its implementation.

Recoveries

The act applies the state’s recoveries laws to All Kids. This permits the state to recoup benefits if the child’s family comes into money from a lawsuit or other windfall.

Study

The act requires DHFS to conduct a study which must

establish estimates, broken down by the state’s regions, of the number of children:

1. with and without health insurance,

2. who are eligible for Medicaid or SCHIP and those actually enrolled, and

3. with access to dependent coverage through an employer and those actually enrolled.

The study must also determine the comprehensiveness of dependent coverage availability, the amount of cost-sharing employees pay currently, and cost sharing associated with the coverage for children who access or have access to employer sponsored dependent coverage. And it must measure the health outcomes or other benefits for children using the program and compare its effect on health care services utilization before and after enrollment.

DHFS must submit its preliminary results to the governor and General Assembly by July 1, 2008 and submit a final report by July 1, 2010.

PRIMARY CARE CASE MANAGEMENT

Although it is not mentioned in the act, perhaps All Kids’ most significant feature is its use of the PCCM model to provide health care, as well as disease management, to better ensure that patients get the preventive care they need and those with chronic conditions (such as childhood asthma) are monitored closely.

Unlike the more commonly used managed care model, in which Medicaid and SCHIP beneficiaries sign up with a plan and then choose doctors and other medical providers from a list of practitioners with whom the plan contracts, under a PCCM, each family chooses a primary care physician (PCP) (any physician in the state can sign up to participate) who manages the child’s care, with the goal of getting him the preventive care he needs.

Under the Illinois program, all KidCare program enrollees will move into the PCCM model. (Medicaid for seniors and the blind are not part of this model. ) The state will pay the PCPs an additional amount each month for their care management function, on top of the regular fee for providing medical services.

The state expects to save $ 56 million in the first year from using this model. It estimates the first year costs to be $ 45 million, which would rise as enrollment rises.

ILLINOIS’ EXISTING PUBLICLY-FUNDED HEALTH SAFETY NET

KidCare

Illinois offers subsidized health care to the state’s low-income children using both federal Medicaid and SCHIP funds. The KidCare program has several components: KidCare Assist, Family Care (for parents and caretaker relatives of KidCare children), KidCare Premium, KidCare Rebate, and Pregnant Women and Babies.

Table 1 shows these programs, along with their income limits and cost-sharing requirements. It also shoes expected cost-sharing for children enrolled in the AllKids program.

Table 1: KidCare Categories—Income Limits and Cost-Sharing

Table 1: Continued

Source: DHFS Website

HUSKY

Table 2 shows the income limits and cost sharing requirements for HUSKY A and B. It also shows these amounts for unsubsidized HUSKY B coverage for higher income families.

Table 2: HUSKY Coverage

Table 2: Continued

HOW THE STATES COMPARE

Cost-Sharing

Both Illinois and Connecticut have well established systems of publicly-financed health care for low-income children. Both use federal Medicaid and SCHIP funds to pay for these systems. Connecticut’s income limits appear to be significantly higher than Illinois’ publicly subsidized coverage.

But All Kids is more affordable for higher income families than HUSKY. It is probably most equivalent to the HUSKY Band 3, which essentially allows the state’s families to buy into the HUSKY B coverage by paying fairly high monthly premiums. Illinois’ coverage is much more affordable. For example, a family of three with income above 300% of the FPL ($ 48,270 per year in 2005) enrolled in the most expensive HUSKY B plan would have to pay $ 442 per month to cover its two children. Under Illinois’ plan, families with income up to $ 60,000 will pay no more than $ 80 per month in total premiums.

A relatively small number of children are enrolled in Band 3 (711 out of 15,238). Those who are, according to Rose Ciarcia, HUSKY Program Manager, have high medical costs.

Health Care Delivery

The care model the two states use also differs. As noted above, Illinois intends to convert to a PCCM model, in which a PCP is paid a monthly amount for care management on top of any normal fee he receives for providing treatment. Any services the child needs will be reimbursed on a fee-for-service basis (which is the case for all parts of the state already, except Chicago).

In Connecticut, HUSKY is managed by four managed care organizations (MCOs) (three in Part B). They receive monthly capitated payments from DSS and assume full risk for the children’s needs. (The payments were originally based on what the state formerly paid under fee-for-service and included additional funds for case management. ) According to Ciarcia, children enrolled in HUSKY must choose a PCP, who acts as a “gatekeeper. ”

With the exception of HealthNet, the HUSKY MCOs require the PCP to assume primary responsibility for managing the HUSKY patient’s care, which includes (1) making referrals to and following up with specialists, (2) coordinating care, and (3) managing a patient’s medication. The state does not pay an additional amount for the PCP to perform these functions. Rather, it is built into the capitated rates the state pays the MCOs, which in turn pay the providers. The state adopted the MCO industry PCP to patient ratio: one PCP: 1,200 patients, and the contracts between DSS and the MCOs reflect these ratios.

Ciarcia adds that each of the HUSKY MCOs has on-staff case managers. These individuals perform a more targeted case management for patients who may be at a higher risk for costly medical care (e. g. , pregnant women).

The $ 56 million in estimated All Kids program savings is predicated on children getting more ambulatory, preventive care outside an emergency room or other hospital setting. We do not know to what extent children in Illinois already receive preventive care (the Kaiser Family Foundation reports that in FY 2004, nearly 64% of the state’s total Medicaid spending was for acute care). In Connecticut, HUSKY enrollees’ well-care visits have been steadily rising. According to Voices for Children, a nonprofit organization that studies the HUSKY program, over half of the children enrolled in HUSKY A received well-child care in 2004, a significant increase over previous years (51% in 2003 and 45% in 1999). At the same time, almost one-third of enrolled children received acute and emergency, but no well-child, care in 2004.

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