Public sector coverage initiatives are those that focus on the expansion of access to public insurance programs--primarily Medicaid and State Children's Health Insurance Program (SCHIP). Medicaid is a federal and state funded program that provides health insurance coverage for several low-income groups: families and children, people with disabilities, and the elderly. SCHIP is also jointly funded and targets uninsured children in low-income families that are not otherwise eligible for Medicaid.
The federal matching funds available under Medicaid and SCHIP make expansions of these programs an attractive option for states. Public sector initiatives include tactics such as expanding eligibility criteria; broadening the target population; increasing coverage through reduced benefit products; providing premium subsidies to purchase private individual or employer-sponsored insurance; allowing public program buy-in options for higher income families; and offering universal coverage for kids.
Many states’ Medicaid and SCHIP initiatives expand coverage beyond the mandatory and optional groups and therefore require a waiver from the federal government.
Public sector initiatives aim to accomplish the following goals:
1. Increase coverage for low income children and adults
2. Reduce costs to states
3. Reduce costs to low-income individuals
4. Maximize federal financial participation
The following are examples of state public sector initiatives that are currently in place. Please visit our State Policy Summaries page for more information about current state initiatives.
High Deductible Medicaid Plan
In 2008, Indiana began to implement Healthy Indiana Plan (HIP), a high-deductible health plan (HDHP) coupled with a Health Savings-type Account (HSA) offered to low-income residents. HIP is the nation’s first Medicaid plan to utilize a high deductible plan and HSA-type product for a low-income population.
Medicaid Expansion and Simplification
Wisconsin implemented the BadgerCare Plus program on February 1, 2008, combining SCHIP, Medicaid, and Healthy Start program dollars to create one streamlined program with simplified enrollment. BadgerCare Plus extends access to health insurance coverage to virtually all Wisconsin children through income eligibility expansions and a sliding-scale premium subsidy for children above 200% FPL and it expands income eligibility limits for parents, other caretaker adults and low-income adults without children.
State-Sponsored Insurance Exchange
The Commonwealth Connector in Massachusetts is an independent state agency created by the Massachusetts legislature as part of the state’s 2006 health reform legislation. The Connector facilitates the purchase of health insurance that is both affordable and meets state minimum coverage standards for small businesses and individuals without access to employer-sponsored coverage.
Public Limited-Benefit Plan for Small Business
ARHealthNetworks is a group health insurance plan for small to medium businesses (two to 500 employees) in Arkansas who do not currently offer health insurance to their employees. The program was authorized through a 2006 Health Insurance Flexibility and Accountability (HIFA) waver and is run by the Arkansas Department of Human Services. The plan is a limited-benefit plan with premiums subsidized for employees with incomes at or below 200% FPL.
Medicaid Employer Sponsored Insurance (ESI) Premium Assistance
In 2006, Kentucky became one of the first states to obtain a state plan amendment (SPA) for its Medicaid program, Kentucky Medicaid, under the Deficit Reduction Act of 2005 (DRA). As part of these changes, Medicaid-eligible individuals who are offered health insurance coverage through their employer may choose to join the employer sponsored plan and receive assistance from Medicaid in paying the premium, rather than receiving direct Medicaid coverage.