Premium Subsidy Programs: Who Enrolls, And How Do They Fare?

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Abstract
Little is known about who enrolls in state premium subsidy programs or en- rollees' experiences. This study surveyed parents of children enrolled in two programs with identical income eligibility requirements: Oregon's State Children's Health Insurance Pro- gram (SCHIP) and its premium subsidy program (FHIAP). Parents choosing FHIAP were more likely to be employed, to speak English, to have prior experience with premiums and private health insurance, and to perceive insurance as protection against future health care needs. Despite copayment requirements and more restricted benefits in FHIAP, there were few dif- ferences in access to care between children enrolled in the two programs. A growing n umber o f s tates have begun to explore premium subsidy programs as a means of covering more of their low-income uninsured resi- dents. Premium subsidy (also known as premium assistance) programs al- low states to use public funds to help enrollees purchase employer-sponsored or other private coverage. By leveraging public dollars in this way, these programs al- low states to cover a larger number of the uninsured than they could through tra- ditional Medicaid or their State Children's Health Insurance Program (SCHIP). Premium subsidy programs are also consistent with the goal of many policy- makers to encourage enrollment in private, rather than public, programs. States can adopt several approaches in implementing such programs, and Con- gress has given states increased flexibility over time. The Health Insurance Flexi- bility and Accountability Act (HIFA), passed in 2001, allows states greater lati- tude in using Section 1115 waivers to cover the uninsured using Medicaid and SCHIP funds. The HIFA initiative requires that states coordinate their waiver pro- grams with private coverage, and several states are complying with this require- ment by implementing premium subsidy programs.1 Thirteen states operate such
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