States step up effort to use child support to cover uninsured
Uninsured / Child Support
September 30, 1997
In the drive to get more children on health insurance and to reap Medicaid savings whenever possible, several states are becoming more aggressive in getting divorced parents to pay for their children’s health insurance.
Medical support orders—a little-known feature of the child support system—are not only being more strictly enforced by some states, but a few child support agencies are going one step further: They are negotiating with insurance companies to make affordable health insurance premiums available to parents.
Following the lead of Sacramento County in California, Montana last month signed a contract with Security Continental Insurance in Downers Grove, IL., to provide affordable health care policies for children covered under medical support orders. Minnesota and Massachusetts are among several other states actively investigating whether to set up similar programs with insurers.
Of the 6.2 million children covered by child support orders, recent census figures show that only 40%—or 2.5 million—are covered by medical support orders and only 27%—or 1.7 million—actually have health insurance. That number is likely to grow. Last year’s federal welfare reform contains an unambiguous requirement that all child support orders include a provision for health-care coverage.
Affordability is one of the key loopholes in the federal requirement that states impose medical support orders, according to Richard Williams, Sacramento bureau chief of the office of child support for California’s Department of Social Services.
Federal law stipulates that health insurance has to be available to the non-custodial parent at a "reasonable price.
"Where it was breaking down was the reasonable cost’ thing," said Mr. Williams.
If medical support is ordered and premium costs are high, there may be a reduction in child support payments. Though the reduction is not on a dollar-for-dollar basis, from the custodial parent’s perspective, it might be preferable to forgo medical support if it means a smaller child support check.
The lower premium costs negotiated by Sacramento County obviously make the trade-off between health coverage and fewer child support dollars less of an issue, according to Mr. Williams.
Affordability is one of the key loopholes in the federal requirement that states impose medical support orders.
Sacramento County has contracts with Kaiser Permanente Health Plan and Blue Shield of California. The per month, per child premium price is $67 for Kaiser Permanente Health Plan coverage and $79 for a Blue Shield of California policy. The benefit packages are comparable to those offered by large employers and there is no restriction on pre-existing conditions.
David Henka, strategic accounts manager for Kaiser Permanente in Sacramento said the $67 premium is possible because Kaiser has chosen to subsidize the program. However, Deborah Stipcich, who negotiated the medical support contract for the state of Montana’s Department of Health and Human Services at a rate of $77 per month, per child, said that, for all but a tiny number of children, medical care tends to be routine and rarely involves hospitalization. "It is usually just shots, cuts and bruises, check ups for school."
The promise of Medicaid savings
While not all children covered by medical support orders are eligible for Medicaid, many are, and enforcing medical support orders has always held out the promise of significant Medicaid savings. Massachusetts officials say they have saved the Medicaid program $30 million by enforcing medical support orders.
But, so far, the promise of big savings hasn’t been borne out in Sacramento County.
The Sacramento County program remains tiny despite all the interest in it. A total of 1,389 children— a small fraction of the county’s 35,000 active child support orders— have been enrolled in the county program as of June 1997, but that is a cumulative figure. The current enrollment of 300 children means the Medicaid savings for a year are closer to $150,000, rather than the millions projected. Originally, the county expected that 200 children would leave the Medicaid program each month in Sacramento County, but that number has been ratcheted down to just 40 per month, according to Fred Shelton, a fiscal analyst for the California Department of Health Services.
"The Medicaid savings have never materialized," said Mr. Shelton. "I think they are always overly optimistic about getting these parents to cooperate."
But enrollment figures don’t tell the full story, Mr. Williams noted. Just the prospect of being forced to pay premiums through a county plan leads some parents to make their own arrangements for their children’s coverage. "When they realize that they are going to pay for it one way or another, they volunteer to put the kids on their plan," Mr. Williams said.
With parents moving and changing jobs, "it is a very labor-intensive process to establish a medical support order and sometimes it doesn’t stay in place very long," said Laura Kadwell, director of the child support enforcement division of Minnesota’s Department of Human Services. Minnesota has had an aggressive medical support enforcement program for several years, but, so far, officials have generally sought to get coverage of children through the non-custodial parent’s health plan.
Mr. Williams said Kaiser and Blue Shield hired Pacific West Administrators hired a West Lake Village, Ca.-based company, to run the Sacramento County program, which means keeping tabs on the premium payments and working to avoid any lapses in coverage. "That is the best part of it—we don’t administer the program," said Mr. Williams. "Basically, we privatized this medical support thing."
—Peter Wehrwein
Contact Mr. Shelton at 916-657-3737; Mr. Williams at 916-654-1549; Mr. Kadwell at 612-297-8232; and Mr. Stipcich at 406-442-7278.
States step up effort to use child support to cover uninsured
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content
