COD E R E D

Encouraged by these low rates, Congress funded a number of states to study how they mightdrive the uninsured population even lower. Although the initial focus was on states with highcoverage rates, State Planning Grants were also given to some of the states with high numbersof uninsured, such as Texas. At the same time the economic slow-down since 2000 has had animpact on a number of states and led to cutbacks in SCHIP and Medicaid, as well as in some ofthe more innovative partnerships developed with private insurers and providers.Issues and Options for Extending CoverageStates have adopted a number of strategies in recent years to attempt to extend or guaranteehealth insurance coverage to those who cannot otherwise obtain it for various reasons. Theseinclude the following options. Note that HIPAA requires guaranteed issue of group coverageand guaranteed renewal of individual coverage, but does not address insurer’s rating practicesor the cost of insurance. 191 It is difficult to determine to what extent each of these strategiesmight reduce the number of uninsured, since more than one initiative is usually in place andworking in tandem where these have been implemented, and they are also subject to outsidefactors in the larger political and economic climate that affect industries, employment, andinsurance .Developing premium assistance programs for employees or dependents through SCHIP andMedicaid that reimburse eligible employees for premiums paid for private coverage thatsubstitutes in part for SCHIP or Medicaid coverage. Six states currently have a SCHIPemployer buy-in program (including one inactive), which lets SCHIP funds be used to help payfor employer-sponsored plans for eligible people when they have access to one and the privateplan would be more cost-effective than enrolling them in SCHIP. 192 Ten states, including Texas,have Medicaid HIPP (Health Insurance Premium Payment) programs. These programs areemployer buy-in programs for Medicaid-eligible people with access to employer-sponsoredinsurance and pay for premiums, coinsurance and deductibles when proven cost-effective forthe state. 193Allowing families who do not qualify to buy SCHIP coverage at full price for their children. Fourstates have a full-cost SCHIP buy-in program, including Florida, which lets higher-incomefamilies buy SCHIP coverage for their children by paying the full premiums with no statesubsidy. 194Establishing reinsurance pools to partially subsidize small group insurance coverage or improveindividual access to coverage. Reinsurance pools assume a portion of insurers’ high-costclaims for individuals and/or groups, as well as help to stabilize the market, sometimes bysubsidizing health insurance for small groups or low-income workers. At least 21 states havereinsurance pools, though many have very low enrollments or are inactive. Florida and Texashave active reinsurance pools, and Colorado and Minnesota have inactive ones. 195 The TexasDepartment of Insurance recently recommended that Texas’ reinsurance pool be phased out, asmentioned in the section on Texas below.Passing legislation that permits the sale of limited-benefits policies that exclude a number ofstate-mandated benefits. This lets insurers and thus employers offer lower-cost insurance,though it does not cover all care that might be needed. The plans exclude some benefits andhave high deductibles, limits on the number of doctor visits, and/or annual caps, so enrolleescould develop serious medical conditions that exceed the coverage limits. At least 11 stateshave enacted or are considering legislation to allow insurance companies to sell limited-benefitspolicies, also called consumer-choice plans, to small groups, including Colorado, Florida,C-2