In the last year, we’ve examined the potential impact of proposed premium changes in Florida  and Wisconsin, but a new study in Health Affairs provides some real-world data on what actually happens when premiums rise (not that we in any way condone experiments in children’s coverage of this sort).

Healthy Kids in Los Angeles County is one of a number of county-run programs in California that were designed to expand coverage to children who are not eligible for Medicaid or CHIP. While successful in improving access to care for kids, securing dedicated funding has been a challenge. As a result, in 2008, the program closed to new enrollees between the ages of 6 and 18 and in July of 2010, premiums were increased to $15/child for the older kids that remained in the program.

Before the premium increases, retention rates among these older kids were high, averaging 98%. However, after the increase, the retention rate dropped 5 percentage points, mostly in the first two months. At the end of the study, 59% of those enrolled in June of 2010 were still enrolled, as opposed to the 80% expected without the premium increase. Meaning, that 4,441 (or 20%) fewer children were enrolled in the program as a result of the increase. 

These data confirm what our prior research suggested – that for many low-income families, even modest increases to premium amounts can lead them to drop coverage as they struggle to meet other, often competing, demands on their limited resources.