Enrollment, expenditures, and utilization after CHIP expansion: evidence from Alabama

In October 2009, Alabama expanded eligibility in its Children's Health Insurance Program (CHIP), known as ALL Kids, from 200% to 300% of the federal poverty level (FPL). We examined the expenditures, utilization, and enrollment behavior of expansion enrollees relative to traditional enrollees (100-200% FPL) and assessed the impact of expansion on total program expenditures.

We compared unadjusted mean person-month-level expenditures and utilization of expansion enrollees and various categories of existing enrollees and used a 2-part modeling strategy to examine differences after controlling for enrollee characteristics. We used probit models to examine adjusted differences in reenrollment behavior by eligibility category.

Expansion enrollees had higher total monthly expenditures ($10.33, P < .05) than traditional ALL Kids enrollees, including higher outpatient ($5.35, P < .001) and dental ($0.85, P < .01) expenditures but lower emergency department (-$1.34, P < .001) expenditures. Expansion enrollees had marginally lower utilization of emergency department services for low-severity conditions and higher utilization of physician outpatient visits. Expansion enrollees were 4.47 percentage points (P < .001) more likely to reenroll before their contract expiration date than traditional ALL Kids enrollees. As of October 2012, expansion enrollees accounted for approximately 20% of ALL Kids enrollment and expenditures.

The expansion population was characterized by moderately higher health expenditures and utilization, and more persistent enrollment relative to fee group enrollees who are subject to the same levels of cost sharing and annual premiums. Although states are prohibited from changing program eligibility until 2019, the costs associated with the expansion population will be important to future policy decisions.