Effect of Subsidized Premiums on Family Insurance Choices
*Names in bold indicate Presenter
Study Design: Medicaid and CHIP programs often impose premiums upon low income eligible parents and children. We estimate total family premiums for public coverage across all family members eligible for public insurance. We analyze the effect of public premiums, controlling for private premiums, on the choices of whether parent and child: 1) are both insured privately, 2) are both insured publicly, 3) have mixed coverage, or 4) remain jointly uninsured. Using the Current Population Survey (CPS) from 2000 through 2013, we create child/parent ‘dyads’ that include demographic and work related controls. Private premiums are imputed from the MEPS-IC using work status/firm size, adjusting offer rates by firm size; families without workers are assumed to face full individual market premiums. We control for health status and demographics; multinomial logistic regression models include state/year fixed effects and clustered (state/year) standard errors.
Population Studied: Random parent/child dyads for all parents eligible for public coverage with or without a premium between 1999 and 2012 (n=100,901).
Principle Findings: Among all families eligible for public coverage, mean family premiums are $383 per year. Considering only families eligible for public coverage with a premium, mean annual family premiums are about $1,300 with 50% of families paying between $250 and $1,600. These are comparable to contributions for coverage in the marketplace for families with 3 persons and incomes under 200% of FPL (2.0-6.3 % of MAGI). . Increases in public premiums reduce the likelihood of joint public coverage and increase the likelihood of joint private, mixed, or uninsured status among all parent/child combinations. Among families without a worker, a modest increase in public premiums ($20 per month) results in a decline of 2.9 percentage points (pp) in the share of families enrolled jointly in a public plan (baseline 50 percent), and an increase of 1.3 pp in the share of families with no coverage (baseline 16.5 percent). Private premiums do not affect coverage choices for families without a worker. However, large ($2000) increases in private premiums for working families with children (the approximate effect of the family ‘glitch’) are associated with a 6.2 pp decline in private coverage and 2.4 pp increase in the likelihood of all members being uninsured.
Conclusion: Findings indicate the potential for declines in joint family coverage in public plans if public premiums are increased (subsidies reduced), especially among non-workers. Changes similar to the family ‘glitch’ have significant effects on coverage for working families.
Implications for Policy or Practice: Among low-income families with children, especially those without a worker, public insurance options, including CHIP, will continue to play an important role in ensuring coverage for all. States may consider implementing a Basic Health Plan or subsidizing Qualified Health Plans through Medicaid expansion waivers, while the Federal government could address employer plan affordability for the family.
Funding Source(s): Robert Wood Johnson’s HCFO program.