State Experiences
Illinois
When Illinois first designed its CHIP program, called KidCare, the state imposed a three-month waiting period as an anti-crowd out strategy. However, there was a concern, primarily among Republican state legislators, that a waiting period would create an inequity for low-income families who had “done the right thing” by purchasing private health insurance. 1 In response to this concern, the state created a state-funded premium assistance program, called KidCare Rebate, to help families pay for private premiums and deter them from dropping private coverage for CHIP. In 2006, when Illinois was designing its universal children’s coverage program, called All Kids, crowd out was again a concern since children in families with income up to 300 percent of the FPL are eligible for a subsidies under the program. 2 The state employed three anti-crowd out strategies:
- Retention of the premium assistance (“Rebate”) program for low-income families;
- A 12-month waiting period for children in families with income above 200 percent of the FPL, with exceptions (e.g., underinsured children and children who lost private coverage due to a job loss are exempt from the waiting period); and
- Cost sharing that is comparable to commercial plans, with premium and copayment amounts based on family income.
Pennsylvania
When Pennsylvania implemented its expansion of CHIP coverage to 300 percent of the FPL in early 2007, it imposed a requirement that children be uninsured for six months before enrolling in coverage (with exemptions for good cause reasons for losing private coverage). In response to the concerns of pediatricians and child health advocates, the state opted to exempt children under the age of two from the six-month uninsured waiting period. The rationale for the exemption was that it is possible to change the trajectory of a child’s life if they receive preventive care and screenings for developmental and physical issues in the first few years of life. For example, it was pointed out that it is sometimes possible to improve outcomes for children with autism if the condition is identified and treated at a very young age.
Other States
Since originally implementing their CHIP programs, a number of states have reduced their waiting periods, usually in response to their experience with crowd out. For example, since they implemented their CHIP programs, Arizona, Connecticut, Montana, New Jersey, New Mexico, and Virginia have reduced the length of their waiting period, and Iowa, Kansas, Louisiana, Mississippi, North Carolina, and Rhode Island have completely eliminated their waiting period. (See Waiting Periods for Children in Medicaid/CHIP.)
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 Resources
Footnotes
1. I. Hill, et al., “Congressionally Mandated Evaluation of the State Children’s Health Insurance Program: Final Cross-Cutting Report on Findings from Ten State Site Visits,” Mathematica Policy Research Inc. (December 2003, revised June 2004). Back
2. T. Coughlin & M. Cohen, “A Race to the Top: Illinois’ All Kids Initiative,” Kaiser Commission on Medicaid and the Uninsured (August 2007). Back
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