Family income and crowd out among children enrolled in Massachusetts Children's Medical Security Plan

To assess whether participation in a state publicly financed health insurance program, Massachusetts Children's Medical Security Plan (CMSP) , which is open to children regardless of income, was associated with disenrollment from private insurance.

A survey of participants in CMSP who were enrolled as of April 1998 was used. We conducted analyses to detect differences in access to and uptake of private insurance between Medicaid-eligible and in eligible children, and between children eligible for the State Children's Health insurance Program (SCHIP) and in eligible children.

A stratified sample of children was drawn from administrative files. the sampling strategy allowed us to examine crowd out among children based on in come and eligibility for publicly funded coverage: those who were Medicaid-eligible (income pound 133 percent of the federal poverty level [FPL]) , those who were SCHIP-eligible (134-200 percent of FPL) , and those with family in comes that exceed SCHIP eligibility criteria (> 200 percent of FPL). The majority of telephone interviews were conducted with the child's parent/guardian between November 1998 and March 1999. The overall response rate was 61.8 percent , yielding a sample of 996 children.

Of the children in our sample whose recent health coverage was employer-sponsored insurance (59 percent), 70 percent were no longer eligible. Few children who had employer-sponsored insurance at enrollment dropped this coverage to enroll in CM SP (1 percent, 4 percent, and 2 percent by income). Compared to Medicaid-eligible children, children with incomes > 133 percent of FPL were significantly more likely to be eligible for employer-sponsored insurance but they were no more likely to have purchased offered coverage. Access to employer-sponsored insurance was limited (19 percent), and uptake was low (13 percent). We found no significant difference between SCHIP-eligible children and those whose family incomes exceeded SCHIP guidelines.

The Massachusetts experience suggests that (1) coverage could be expanded to children with incomes up to 200 percent of FPL with little direct substitution of public coverage for private insurance, and (2) substitution among children with incomes > 200 percent of FPL, who paid a premium that may have restrained crowd out, did not differ from that among SCHIP-eligible children.