A little over six months ago, I watched the signing of the Affordable Care Act (ACA) on television. I was filled with hope that as a nation we’d finally taken a giant step forward in ensuring access to high quality health care coverage, especially for children. While I can’t endorse his choice of vocabulary, I agreed whole-heartedly with my fellow Delawarean Vice President Joe Biden when he exclaimed, “This is a big …..deal!” In the time since then, we’ve seen the insurance industry respond to the initial set of consumer protections ACA guarantees. Some of these responses have been encouraging, like the early adoption of coverage for young adults on their parent’s private insurance plan. But others, like the dropping of child-only policies by a number of major insurers who fear the ban on barring children from getting insurance because of pre-existing conditions, have highlighted the continued need for innovative strategies that offer kids, especially those with disabilities or chronic conditions, access to stable, comprehensive and affordable coverage.

Medicaid and CHIP buy-in programs are a particularly effective option for meeting this need. A Medicaid or CHIP buy-in program allow families who meet certain eligibility criteria (often disability-related) but whose income is over the limit for public benefits to purchase coverage through them. Families pay a premium for Medicaid or CHIP coverage, just as they do for private insurance. What’s the advantage of Medicaid or CHIP over private insurance? The benefit package in Medicaid includes the comprehensive child health component known as Early, Periodic Screening, Diagnosis and Treatment (EPSDT) and in several states the CHIP program offers benefits that model those in Medicaid. So the benefits are better and the out-of-pocket costs to families are generally much lower. Most importantly, Medicaid and CHIP have never discriminated against children with pre-existing conditions and there is no loop-hole that will ever allow them to. Medicaid buy-in programs offer a particular advantage that CHIP buy-in programs do not. Privately insured children can buy-in to get coverage for services that are not covered or are covered inadequately by their private plan, generally at a modest premium cost. This policy is aimed at discouraging low-income, privately insured families from dropping their commercial coverage to become uninsured so they can obtain CHIP benefits for their children. When families drop private coverage to obtain public coverage, this is called “crowd out” and it is a major concern that policymakers want to avoid.

A few states have operated Medicaid or CHIP buy-in programs for uninsured and underinsured children for many years. In Massachusetts and Minnesota these programs are limited to children who meet the disability criteria for Supplemental Security Income (SSI), while the New Jersey and Vermont buy-in programs are available to any uninsured or underinsured child, regardless of diagnosis or special needs. With the passage in 2006 of the Family Opportunity Act (FOA), more of these buy-in programs are being created across the country.  Here’s a quick summary of what’s happening in the states:

• Massachusetts’ CommonHealth program, implemented in 1988, is the oldest Medicaid buy-in program in the country. CommonHealth serves both adults and children with disabilities. Participants must meet the SSI disability criteria but family income is disregarded in determining eligibility for children. Families pay a premium on a sliding scale, based on income and on whether the family is purchasing full coverage for a child who is uninsured (and thus receives the full Medicaid benefit package) or partial coverage for a child who has private insurance, and needs Medicaid to wrap-around their existing benefits.
• In Minnesota, the Medicaid buy-in program is called Medical Assistance-TEFRA and is for privately insured children who meet the SSI disability criteria and require an institutional level of care. Parental income is disregarded in determining income eligibility for the program, but families pay an annual fee based on family size and income. There are no co-pays for coverage.
• New Jersey operates a CHIP buy-in program for children in families whose income is between 133% and 350% of the Federal Poverty Level (FPL). It is called New Jersey FamilyCare. There are no disability criteria. Premiums are required for those over 150% of the FPL, with a maximum premium rate of $133 per family, per month. At 350% of the FPL, the income eligibility ceiling for New Jersey’s buy-in program is higher than the ceiling for most CHIP programs.
• Vermont operates a Medicaid buy-in program for children with family income at 225% to 300% of the FPL who are uninsured or have private insurance, but need Medicaid for services such as mental health care, dental care or prescription drugs. The maximum premium cost for children’s coverage is $60 a month.
• North Dakota implemented their FOA Medicaid buy-in option in April 2008. The buy-in program is open to all children who meet the SSI disability criteria and have a net family income of up to 200% of the FPL. The premiums for the program are set at 5% of a family’s gross monthly income.
• Louisiana implemented Medicaid Buy-In programs under the Family Opportunity Act in October 2008 for children whose family income is below 300% of the FPL. Premiums are based on a sliding fee scale, set at $12-$30 per month for families within the 201-250% FPL range and $15-$35 for the 250-300% FPL range. As of February, 2010 there were approximately 550 children enrolled in this program.