This research is funded in part through a U.S. Health Resources and Services Administration, State Planning Grant to the Hawaii State Department of Health. Sub-Contract Research Corporation of the University of Hawaii. Research conducted by the University of Hawaii, Social Science Research Institute in collaboration with the Hawaii State Department of Health, Hawaii Institute for Public Affairs: Hawaii Uninsured Project and the Hawaii Health Information Corporation. 1 Uninsured Population: Hawai ` i Children Age 0-18 Gerard Russo, Ph.D. Sang-Hyop Lee, Ph.D. Lawrence Nitz, Ph.D. Thamana Lekprichakul, Ph.D. Abdul Jabbar, Ph.D. Candidate Rui Wang, Ph.D. Candidate University of Hawai`i at Mānoa HRSA SPG Program Hawai ` i Coverage For All Project Technical Workshop VI 17 September 2004

Preliminary results. Revised September Subject to further revision. 2 Age Distribution of Hawai`i’s Uninsured Population: CPS , 10-year Average 112,565 25,669 84,369 2,527

17 September 2004Preliminary results. Revised September Subject to further revision. 3 Number of Uninsured Children: Age 0-18 Survey (Years)Uninsured Children Age 0-18 CPS ,669 HHS ,016

17 September 2004Preliminary results. Revised September Subject to further revision. 4 Number of Uninsured Children: Age 0-17 Survey (Years)Uninsured Children Age 0-17 CPS ,215 HHS ,820 SLAITS ,093

17 September 2004Preliminary results. Revised September Subject to further revision. 5 Uninsured Children Age 0-18 by FPL: CPS , 10-Year Average

This research is funded in part through a U.S. Health Resources and Services Administration, State Planning Grant to the Hawaii State Department of Health. Sub-Contract Research Corporation of the University of Hawaii. Research conducted by the University of Hawaii, Social Science Research Institute in collaboration with the Hawaii State Department of Health, Hawaii Institute for Public Affairs: Hawaii Uninsured Project and the Hawaii Health Information Corporation. 6 The Impact of State Children’s Health Insurance Program (SCHIP) Expansion on Health Insurance Coverage in Hawai ` i Gerard Russo, Ph.D. Sang-Hyop Lee, Ph.D. Lawrence Nitz, Ph.D. Thamana Lekprichakul, Ph.D. Abdul Jabbar, Ph.D. Candidate University of Hawai`i at Mānoa Kathleen Baker, Ph.D., Hawaii Department of Health Hawaii HRSA SPG Technical Workshop VI 17 September 2004

Preliminary results. Revised September Subject to further revision. 7 Research Objective: Purpose of this study is two-fold. First, to assess the impact of the initial SCHIP expansion which occurred in Hawaii July 1, 2000 and extended free public insurance coverage to all children aged 0-18 years residing in households with incomes not greater than 200% of the Hawaii specific federal poverty level (FPL). Second, to predict take-up of public coverage and crowd-out of private insurance which may occur under a proposed expansion of eligibility to children aged 0-18 years residing in households with incomes between 201% and 300% of the federal poverty level (FPL).

17 September 2004Preliminary results. Revised September Subject to further revision. 8 Hawai ` i Title XXI Program: SCHIP July 2000 SCHIP Hawaii children aged 0 to 18 years 200% of the FPL effective. Hawaii SCHIP is implemented as a Medicaid/QUEST expansion. The Hawaii Medicaid Program is implemented as a Managed Care & Managed Competition Program under the acronym QUEST: 1115 Waiver Demonstration.

17 September 2004Preliminary results. Revised September Subject to further revision. 9 SCHIP Federal Medical Assistance Percentage: Hawaii Enhanced Federal Medical Assistance Percentage (FMAP): Hawaii Federal Fiscal Year (FFY)Enhanced FMAP: SCHIP % % % % % % Source: Federal Register

17 September 2004Preliminary results. Revised September Subject to further revision. 10 Hawai ` i SCHIP Program Eligibility by Age and Federal Poverty Level

17 September 2004Preliminary results. Revised September Subject to further revision. 11 Population Studied This study analyzes the insurance coverage of Hawaii residents aged 0-18 years residing in households with incomes between 0% and 300% of the Hawaii specific federal poverty guidelines as published by the U.S. Department of Health and Human Services. Weighted population estimates are produced using the Hawaii Health Survey and the Hawaii sample of Current Population Survey

17 September 2004Preliminary results. Revised September Subject to further revision. 12 Population Studied (continued) Three groups are analyzed Children eligible for free public insurance throughout the period (“The Control Group”). Children who began the period ineligible and became eligible in July 2000 (“The Treatment Group”). Children who were ineligible throughout the period. This is the target group for future expansion.

17 September 2004Preliminary results. Revised September Subject to further revision. 13 Hawai ` i Population: Children Age 0-18 by Eligibility, (2-Year Average) Survey Year Medicaid QUEST Eligible SCHIP Eligible SCHIP Proposed Expansion % FPL 301% + FPL CPS ,64574,83764,074105,193 HHS ,19464,60465,847103,758

17 September 2004Preliminary results. Revised September Subject to further revision. 14 Comparison of CPS, HHS and SLAITS-CSHCN (age 0-17) Survey Year Medicaid QUEST Eligible SCHIP Eligible SCHIP Proposed Expansion % FPL 301% + FPL CPS ,64574,83764,074105,193 HHS ,19464,60465,847103,758 SLAITS ,11548,86160,143137,314

17 September 2004Preliminary results. Revised September Subject to further revision. 15 Method of Analyzing SCHIP Expansion Using the Hawaii Health Survey and Current Population Survey Natural Experiment Based on July 1, 2000 SCHIP Expansion Pre-Expansion Survey Years: Before July 1, 2000 HHS 1998,1999,2000 thru June CPS 1998,1999,2000 Post-Expansion Survey Years: After July 1, 2000 HHS 2000 after July, 2001, 2002 CPS 2002, 2003 Difference-in-Differences Approach

17 September 2004Preliminary results. Revised September Subject to further revision. 16 Data is Split Four Ways 1.Treatment Group Before SCHIP 2.Treatment Group After SCHIP 3.Control Group Before SCHIP 4.Control Group After SCHIP Pooled Regression Model Dummy Variables Pick Up Differences

17 September 2004Preliminary results. Revised September Subject to further revision. 17 Econometric Model: Multinomial Logit Multinomial Logit to Estimate the Probability of Coverage Three Categories Uninsured Private Insurance & Other Medicaid QUEST SCHIP Predictor Variables Age Sex Income (FPL) County of Residence Race/Ethnicity Health Status Adult Employment Status Adult Educational Attainment Number of Children

17 September 2004Preliminary results. Revised September Subject to further revision. 18 Differences before and after July 1, 2000: CPS (percentage point changes) Difference in Treatment Group (SCHIP Eligible) Difference in Control Group (Medicaid Eligible) Difference in Differences Uninsured -3.21%-0.29%-2.92% Public Insurance %+0.93%+10.05% Private Insurance -7.77%-0.64%-7.13%

17 September 2004Preliminary results. Revised September Subject to further revision. 19 Difference-in-Differences Estimates of Insurance Coverage Change due to SCHIP Expansion July 1, 2000 Coverage Percentage Point Change CPS Uninsured-2.9% Public Insurance +10.0% Private Insurance -7.1%

17 September 2004Preliminary results. Revised September Subject to further revision. 20 Summary Results: Selected Studies StudySurveyTake-UpCrowd-Out Cutler & Gruber 1996 CPS23%30%-40% Yazici & Kaestner 2000 NLSY19% Blumberg et al SIPP6.3%4.4% LoSasso & Buchmueller 2002 CPS4%-10%18%-50% Card & Shore- Sheppard 2003 SIPP, CPS, NHIS 10%-13%0%-50% Russo, et al CPS10%70%

17 September 2004Preliminary results. Revised September Subject to further revision. 21 Difference-in-Differences Estimates of Insurance Coverage Change due to SCHIP Expansion July 1, 2000 Coverage Change in Children Covered CPS Uninsured-2185 Public Insurance Private Insurance -5334

17 September 2004Preliminary results. Revised September Subject to further revision. 22 SCHIP Enrollment: Med-QUEST Administrative Data CPS HHS Source: DHS Enrollment Data, Hawaii Covering Kids

This research is funded in part through a U.S. Health Resources and Services Administration, State Planning Grant to the Hawaii State Department of Health. Sub-Contract Research Corporation of the University of Hawaii. Research conducted by the University of Hawaii, Social Science Research Institute in collaboration with the Hawaii State Department of Health, Hawaii Institute for Public Affairs: Hawaii Uninsured Project and the Hawaii Health Information Corporation. 23 POLICY SCENARIO: SCHIP EXPANSION Expand the eligibility requirement for the State Children’s Health Insurance Program for children aged 0-18 years from an upper limit of 200% to 300% of the Federal Poverty Level.

17 September 2004Preliminary results. Revised September Subject to further revision. 24 Estimated Impact of SCHIP Expansion from an Upper Limit Eligibility of 200% FPL to 300% FPL Coverage Change in Children Covered CPS Uninsured-1871 (29.1%) Public Insurance (100%) Private Insurance (70.9%)

17 September 2004Preliminary results. Revised September Subject to further revision. 25 Principle Findings Based on the CPS estimates, the initial SCHIP implementation of July 1, 2000, which brought public insurance eligibility to 200% FPL, crowded-out private insurance at the rate of 2.4 children for every one child previously uninsured. The proposed further expansion to 300% is projected enroll 6440 additional children. Of these approximately 1870 would have been previously uninsured, while 4570 would be drawn from privately insured families.

17 September 2004Preliminary results. Revised September Subject to further revision. 26 Conclusion Because of a number of factors, including Hawaii’s Pre-paid Health Care Act of 1974, which mandates private sector employment-based coverage, middle-class families are typically well insured. Of the approximately 65,000 children aged 0-18 years residing in families with incomes between 201% and 300% of the FPL, only are without health insurance coverage. As a result, a generous public expansion which takes all comers up to 300% FPL is likely to yield a large number of privately insured along with the uninsured.

17 September 2004Preliminary results. Revised September Subject to further revision. 27 Policy Implications A Hawaii SCHIP expansion to 300% of the FPL will result in crowd-out of private insurance on a 2.4-to-1 basis for every newly insured child. Whether viewed from the broad federal perspective or the narrow state budgetary perspective, such an expansion would generate high public expenditures per newly insured child and should therefore be pursued with caution. A successful and sustainable expansion of eligibility criteria must be accompanied by safeguards against excessive private insurance crowd-out.

17 September 2004Preliminary results. Revised September Subject to further revision. 28 Limitations Program participation and crowd-out are estimated imprecisely. Estimates only cover SCHIP through Unable to estimate the extent to which SCHIP prevents Medicaid spend-down. HHS and CPS subject to Medicaid Under Count.

17 September 2004Preliminary results. Revised September Subject to further revision. 29 Mahalo! This research is funded in part by U.S. Department of Health and Human Services Health Resources & Services Administration State Planning Grant Hawaii State Department of Health.