CHILD HEALTH; HEALTH INSURANCE;
INSURANCE - HEALTH;
December 4, 2003
HISTORY OF HUSKY
By: Robin K. Cohen, Principal Analyst
You asked for a summary of changes in the HUSKY program since its creation in 1997.
The HUSKY program has provided managed health insurance coverage to children up to the age of 19 since 1998; certain adults have been receiving assistance since 2001. HUSKY Part A offers Medicaid coverage to children in families whose income does not exceed 185% of the federal poverty level (FPL) (currently $ 34,040 for a family of four). There is no asset test. Until recently, the program had no cost sharing requirements. But under 2003 legislation, adults must now make co-payments and may have to pay premiums in the future. In September 2003, 203,558 children and 86,926 adults (over age 19) were enrolled in HUSKY A.
Children in families with incomes between 185% and 300% of the FPL (up to $ 55,200) are eligible for Part B services, which are similar to the Medicaid benefits but, could change as a result of the same 2003 law. There is also no asset test for this program. The state uses a separate federal funding stream to pay 65% of the state’s HUSKY B expenditures. All HUSKY B families must pay co-payments and higher income families also pay premiums. The 2003 law requires lower-income families to also pay premiums and increases the caps on co-payments. The law requires the Department of Social Services (DSS) to change the service package and cost sharing requirements for HUSKY B so they more closely resemble a commercial HMO. In September 2003, 15,061 children were enrolled in HUSKY B.
Children with special health care needs (physical or behavioral) can supplement their medical coverage by participating in the HUSKY Plus program.
Unsubsidized coverage is also available to children in higher income families. These families pay the full premium cost of between $ 151 and $ 221 per month per child, plus the required co-payments.
An enrollment broker determines a family’s eligibility for HUSKY and helps them enroll in one of the managed care organizations currently contracting with DSS to provide services.
Five legislative acts have caused significant changes in the program since its inception. First, in 1999 the legislature allowed parents and caretaker relatives of children enrolled in HUSKY A to participate in Part A. (The income limits for that coverage group were subsequently reduced (2000 and 2003). A pending court case will determine whether the most recent reduction can be fully implemented. ) The next two most significant changes came in 2003 when the legislature (1) imposed new and higher premiums, (2) imposed higher co-payments on program beneficiaries, (3) potentially reduced benefit packages for program enrollees, and (4) potentially allowed pharmacies to refuse to fill prescriptions when program enrollees fail to pay their co-payments. A separate 2003 act paves the way for DSS to provide dental services to HUSKY A enrollees outside of the managed care model.
Enabling Federal Law and State Response
The federal Balanced Budget Act of 1997 created a new title XXI in the Social Security Act and designated it the State Children’s Health Insurance Program or SCHIP. That legislation allowed states to initiate and expand health insurance coverage for uninsured children and to pay for it with $ . 65 in SCHIP funds for every state dollar spent. Under this authority, the Connecticut legislature established the HUSKY program in a specially-called session in October 1997.
For several years before the passage of HUSKY, Connecticut had been incrementally increasing its child Medicaid program coverage. Thus, when HUSKY was established, children in families up to 185% of FPL (designated HUSKY A) were already covered. The state decided to use the SCHIP funds to cover two additional groups of children: (1) children in families with incomes between 185% and 300% of FPL (to be designated HUSKY B) and (2) 17- and 18-year-olds who were not HUSKY A-eligible (only kids aged 16 and under were Medicaid-eligible at the time the HUSKY law was passed).
PA 97-1, October 29 Special Session, also established annual co-payment and premium requirements for HUSKY B families. (There were no coinsurance requirements in HUSKY A. ) For families with incomes between 185% and 235% of the FPL, the maximum annual co-payment was set at $ 650 and there were no premiums. Families with incomes between 235% and 300% of FPL could not be required to pay out more than $ 1,250 in combined premiums and co-payments. No co-payments or premiums were set for higher-income families. Rather, they would buy into the health plan at a negotiated group rate.
Until 2003, the most significant change in the program was the creation of a new Medicaid coverage group to help parents or other caretaker relatives of HUSKY A children. A prevailing view was that more children would enroll in HUSKY if their parents could also get coverage.
In 1999, the legislature took advantage of a provision in federal Medicaid law referred to as “Section 1931,” to cover adults up to the same income limit applicable to children (185% of the FPL). This legislation (PA 99-279) became effective on July 1, 2000. But in 2000, the legislature reduced the income limit to 150% of the FPL and delayed the coverage until January 1, 2001 (PA 00-2, June Special Session).
In 2003, the income limit was reduced to 100% of the FPL (Section 10 of PA 03-2), effectively eliminating coverage for all adult caretakers except those receiving Temporary Family Assistance (cash welfare) and certain other very low-income families. Connecticut Legal Services sued the state to retain coverage. Most recently, the 2nd Circuit Court of Appeals issued a temporary injunction, staying the benefits for the adults with the higher incomes provided they had earnings. (We have attached a portion of a 2003 OLR public act summary that provides a more detailed chronology of the suit. )
Expanding Outreach and Easing Enrollment Process
Aside from the adult coverage provisions, the only other significant legislative change up until 2003 was enacted in 2001. PA 01-137 did a number of things to extend medical coverage to more families and ease the enrollment process. Some of its more important elements included:
1. reducing, from six to two months, the time that a child must have been without employer-sponsored health coverage to qualify for HUSKY B;
2. allowing more entities to grant children provisional or “presumptive” eligibility for HUSKY benefits;
3. making it easier for families to renew their HUSKY enrollments; and
4. allowing DSS to seek a federal waiver to use SCHIP funds to promote enrollment.
Eligibility, Premiums, Co-Payments, and Covered Benefits
The legislature made a number of changes in the HUSKY program under three separate 2003 acts. As described above, PA 03-2 reduced the income limits for adult coverage from 150% to 100% of the FPL. In addition, Section 7 of the act eliminated continuous eligibility for children.
PA 03-3, June 30 Special Session, made several significant changes in the areas of cost sharing and benefits. Among other things, these include raising the premiums for higher income HUSKY B families, instituting them for lower -income HUSKY B families and HUSKY A adults, increasing the overall cost sharing caps, imposing premiums on HUSKY A adults, and changing the benefit package for program enrollees.
Elimination of Continuous Eligibility. Section 7 of PA 03-2 eliminated continuous eligibility for children in HUSKY A. Being continuously eligible for HUSKY meant that children, once determined eligible for HUSKY A, remained eligible for 12 months, regardless of whether their parent’s or caretaker’s financial or other circumstances changed in a way that would make them ineligible for benefits. (Children losing their eligibility for HUSKY A would likely qualify for HUSKY B. )
Cost Sharing in HUSKY B. Section 55 of PA 03-3, June 30 Special Session, requires, rather than allows the DSS commissioner to impose cost sharing on HUSKY B participants, to the extent permissible by federal law. It allows the commissioner to increase the caps on cost sharing payments.
As mentioned above, under prior law, families with incomes between 185% and 235% of the FPL had a $ 650 cap on cost sharing payments. Since they did not pay a premium, this was in effect a co-payment cap. Under the 2003 act, the commissioner can impose premiums on these families, and can increase their overall cost sharing cap to up to 5% of their total income. DSS has indicated that it will increase the co-payment cap to $ 760 annually, effective February 2004. And it has proposed a $ 30 monthly per child premium ($ 50 maximum per family) for this group.
For families with incomes at the 235% to 300% of FPL range, the proposed annual co-payment cap is also rising from $ 650 to $ 760. And DSS has proposed raising the monthly premiums for these families from the current $ 30 ($ 50) to $ 50 and $ 75, respectively.
Cost Sharing in HUSKY Part A. Section 72 of PA 03-3, June 30 SS, sets a maximum $ 3 co-payment for HUSKY A medical services and a $ 1. 50 cap on prescription drugs for FYs 2003-04 and 2004-05. (The co-payment had been $ 1, per PA 03-2. ) DSS has implemented a $ 1. 50 prescription co-payment and $ 2 co-payment for medical services. In addition to the co-payments, the act requires the DSS commissioner to direct the managed care organizations (MCOs) to assess monthly premiums as follows:
Monthly Premiums—Per Person
Monthly Family Cap
50% to 100% of FPL
100% to 185% of FPL
Previously, HUSKY A required no cost sharing.
Individuals participating in HUSKY A, but not enrolled in managed care, must be assessed similar co-payments and premium requirements. The act permits the DSS commissioner to deny coverage or discontinue HUSKY A eligibility when a recipient falls two months behind in making premium payments. But the termination cannot occur until 30 days after the clients is notified. (Federal Medicaid law gives individuals the right to appeal benefit terminations. )
PA 03-3, JSS requires the DSS commissioner to amend the state’s Medicaid plan and to seek any necessary waivers to carry out these provisions. It requires her to implement the changes while in the process of adopting necessary policies and procedures in regulation form.
Federal regulations (42 CFR § 447. 52, et. seq. ) limit what cost sharing can be imposed on Medicaid recipients, both in terms of the actual amount that can be charged, as well as who can be required to pay (e. g. , pregnant women and children under the age of 21 cannot be required to pay cost sharing). But states can get federal waivers to allow them to impose cost-sharing on otherwise exempted groups of program enrollees.
Nonpayment of Co-Payments. Section 69 of PA 03-3, June 30 SS, requires the DSS commissioner to submit to the federal Medicaid agency a Medicaid state plan amendment to allow pharmacies to refuse to fill Medicaid prescriptions, except those for psychotropic therapies, for program beneficiaries who demonstrate a documented and continuous failure to pay co-payments in spite of their ability to make them. (Federal regulations (42 CFR § 447. 53) prohibit Medicaid providers from denying services to individuals who are Medicaid-eligible based on their inability to pay the program’s cost sharing requirements. ) Continuous failure is defined as failure to make required co-payments (1) within six months after a prescription is filled or (2) on six or more prescriptions when these prescriptions are filled during any six-month period. The amendment must allow for a resumption of drug benefits once the beneficiary pays all of his outstanding co-payments.
DSS has not yet received federal approval to implement this change.
Service Package for Program Beneficiaries. Section 56 of PA 03-3, June 30 Special Session, requires the HUSKY B services and cost-sharing requirements to be substantially similar to the services and cost sharing requirements of the largest available MCO offered to state residents, as measured by the number of covered lives reported to the Insurance Department in the most recent audited annual report.
For HUSKY A participants, the act requires that the managed care plan be substantially similar to the state employee “Non-Gatekeeper” POE Plan. It must also comply with all federal Medicaid rules.
Presently, HUSKY A beneficiaries receive their health care from one of four (three for HUSKY B) MCOs contracting with DSS. The state pays the MCOs a monthly capitation rate, which is expected to cover all of the services participants need in a given month.
Elimination of Presumptive Eligibility in HUSKY A. Sections 56 and 57 of PA 03-3, June 30 SS, eliminate presumptive eligibility in the HUSKY A program. Under presumptive eligibility, certain qualified entities could determine that HUSKY A children were eligible for benefits before the family’s financial information was verified. (Under federal law, states can take up to 45 days to determine someone’s eligibility for Medicaid. )
Dental Carve Out. Although dental services are currently part of the service package that HUSKY A and B beneficiaries receive (MCOs subcontract with dental plans), this will likely change as a result of new legislation. PA 03-155 requires the DSS commissioner to amend the state’s Medicaid managed care waiver (governs HUSKY A) by July 1, 2004 to implement a statewide plan for dental services provided in the HUSKY program. This “carve out” of dental services is expected to include HUSKY A, HUSKY B, and the Medicaid fee-for service populations.