HD24 - Virginia Children's Medical Security Insurance Plan


Executive Summary:
This report is in response to the legislative mandate for the Department of Medical Assistance Services to develop a proposal to implement the Virginia Children's Medical Security Insurance Plan to provide health insurance for uninsured and underinsured children in families with income under 200 percent of poverty. In order to leverage state funds, the Department has developed five options consistent with requirements in federal legislation passed this summer, which creates a new State Children's Health Insurance Program, using federal matching funds at a higher match rate than the current Medicaid program. The state has already earmarked $7.3 million annually for children's health insurance.

The Department estimates there are 154,000 uninsured children under 200 percent of poverty. Of those children, approximately 82,000 are eligible for Medicaid, but not enrolled, and 72,000 are eligible for the new health insurance initiative.

While the Department will continue to analyze other options, for this report the Department analyzed the following options:

Option 1-Expand Medicaid to 125 Percent of Poverty
Option 2-Expand Medicaid to 150 Percent of Poverty
Option 3-Key Advantage to 200 Percent of Poverty (Gross Income)
Option 4-Bid Regional Contracts to 200 Percent of Poverty (Gross Income)
Option 5-Expand Medicaid to 200 Percent of Poverty

Option 1 is designed to cost no more than the state funds already committed to the trust fund. Options 1, 2, 3 and 4 would meet the goal of the Virginia Children's Medical Security Insurance Plan to provide insurance to children in families with income under 200 percent of poverty. Since some income is disregarded in determining Medicaid eligibility, gross income exceeds Medicaid countable income by as much as 50 percent of poverty. As a result, Option 5 would cover children up to 200 percent of poverty and above.

Only the options to expand Medicaid could be implemented by July 1, 1998. The Medicaid options would expand an entitlement but Medicaid also provides children the most comprehensive benefits package. Options 3 and 4 would be separate state programs. Both would use the State Employees Key Advantage benefit plan. Option 3 would also use the Key Advantage delivery system and benefits administration structure. Under Option 4, the state would bid regional contracts. Options to create a separate program could delay implementation from 6-18 months.

Under the various options, between 29,900 and 88,400 additional children would be expected to enroll in the new health insurance program over three years. An additional 41,000 uninsured children would be expected to enroll in the current Medicaid program as a result of outreach.