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State Buy-In Programs: Prospects and Challenges |
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From Urban Institute: State buy-in programs are designed to address coverage shortfalls among moderate- and higher-income children whose families are not eligible for Medicaid or SCHIP but who cannot afford, or do not have access to, private coverage. These programs allow families to buy their children into a comprehensive public insurance plan with low out-of-pocket cost sharing at an unsubsidized premium. SCHIP buy-in programs, available in a growing number of states, provide comprehensive health insurance options for children in families with incomes too high to qualify for government-supported plans. Through these programs, moderate- and higher-income parents can buy their children the same health care coverage offered through the state programs, but at a much higher premium than charged for lower-income children. Take-up rates in buy-in programs appear to be low relative to the size of the uninsured population to which they are targeted, ranging from 8 to 11 percent of eligible children in selected states. Enrollment in private nongroup coverage among the target income group tends to be substantially higher than enrollment in buy-in programs in the same state. Premiums in buy-in programs are substantially higher than premiums charged to children in the subsidized component of Medicaid/SCHIP. By providing greater subsidies to moderate-income families, thereby raising the minimum income level for the unsubsidized buy-in, states will likely see greater enrollment in the buy-in program and greater reductions in uninsurance among children. Adverse selection is likely to occur in buy-in programs, especially in those where premiums are high relative to income, participation is voluntary, and the private nongroup insurance market does not have community rating and guaranteed issue of policies.
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