Deterring crowd-out in state children's health insurance programs: How would waiting periods affect children in New York?

Abstract

<italic>Background</italic>. The State Children's Health Insurance Program (SCHIP) provides public coverage to low-income US children who are ineligible for Medicaid. Families may substitute or crowd-out of private plans to enroll in SCHIP. Waiting periods require a specified uninsured period before SCHIP to deter substitution. Waiting periods in most states preclude objective measurement, and substitution in SCHIP is poorly understood. New York monitors substitution and may impose a 6-month waiting period depending on incidence. <italic>Objectives</italic>. Determine the incidence and costs of substitution; describe characteristics, health status, and health care experiences of substituters versus nonsubstituters before SCHIP; identify differences in access, service use, and health status during SCHIP to determine the potential impact of waiting periods on children and effects of substitution on program impact measures. <italic>Population studied</italic>. Random sample, stratified by race, age, and region of NY, of 2644 children ages 0--17 who enrolled in SCHIP between 11/00 and 3/01. <italic>Design</italic>/<italic>Methods</italic>. Retrospective analysis of cross-sectional survey data collected via parent telephone interview six months after SCHIP enrollment. Bivariate analyses and multivariate logistic regression calculated incidence of substitution, described sociodemographic characteristics and experiences of substituters before SCHIP (usual source of care (USC), service use, unmet need, health status) and during SCHIP (USC, USC use, health status), and determined the degree to which experiences before and during SCHIP were associated with substitution versus other factors. STATA was used to provide weighted statewide estimates. <italic>Principal findings</italic>. Incidence was 7.5%, (SE 1.1). Six-month premium costs for substituters represented 7% of total premiums for all enrollees. Health status and prior experiences did not differ by substitution status, but greater parental worry was associated with less substitution. Differences during SCHIP were associated with factors other than substitution. <italic>Conclusions and implications</italic>. Substitution is not occurring frequently in NY, is not associated with differences in prior health status or service use during SCHIP, and is unlikely to have significant impact on premium costs or assessment of program performance. Waiting periods are costly to enforce, and even short gaps in coverage can harm children. Unintended consequences of waiting periods in New York may overshadow intended consequences.