The effect of HIFA waiver expansions on uninsurance rates in adult populations.

One of the goals of the Patient Protection and Affordable Care Act (PPACA) of 2010 is to increase the rate of insurance coverage in the United States, in part, by expanding eligibility for the Medicaid program. Of particular note, PPACA extends coverage to adults—including childless adults—a group that traditionally has been excluded from most Medicaid programs. There is relatively little research on the effect of Medicaid expansions to childless adults because childless adults generally are not eligible for Medicaid. One exception is the Health Insurance Flexibility and Accountability (HIFA) initiative, which extended Medicaid coverage to a variety of typically ineligible populations, including childless adults. Health Insurance Flexibility and Accountability waivers are a variant of Medicaid 1115 waivers designed to encourage new state approaches to increase the number of insured individuals through Medicaid, State Children's Health Insurance Program (SCHIP), and new public–private partnerships (Benjamin 2001; Engquist and Burns 2002; Ryan 2002; Sachs 2003). HIFA waivers provided a high level of policy flexibility and federal matching funds under Medicaid and SCHIP, and allowed states to form partnerships with private industry to address the problem of the uninsured. HIFA targeted individuals with incomes below 200 percent of the federal poverty level (FPL) and allowed expansions in eligibility under existing public programs, but it encouraged premium assistance programs and development of new health plan products. HIFA explicitly allowed the inclusion of childless adults in the program. The HIFA program was begun on August 4, 2001. Under HIFA, states were allowed to subsidize private health insurance premiums for either SCHIP or Medicaid enrollees (the latter under the Medicaid Health Insurance Premium Payment program) (Zabaza 2003). Subsidies for private health insurance premiums were intended to leverage private funds to help cover the uninsured and overcome the “welfare stigma” associated with public insurance programs for low income people. The Centers for Medicare and Medicaid Services (CMS) provided “strong encouragement” to states to further integrate, or at a minimum coordinate, Medicaid and SCHIP funding with private health insurance options (including both group and individual insurance). Flexibility was provided for premium assistance options, in terms of benefits and cost sharing. States also were allowed to use Federal funds to develop and subsidize privately offered health insurance products that groups or individuals might purchase with a public subsidy. A total of fifteen states received HIFA waivers between December 2001 and December 2006 (Table 1). Table 1 Approved Health Insurance Flexibility and Accountability (HIFA) Waivers The purpose of our analysis is to determine whether adult enrollment in HIFA programs had the effect of reducing the uninsurance rate in HIFA states. The HIFA programs would reduce the uninsurance rate as long as HIFA enrollees were drawn from the ranks of the previously uninsured rather than from individuals previously enrolled in public or private health insurance programs. Thus, our analysis addresses whether HIFA “crowded out” public and private health insurance coverage. The unique nature of each state's program means that it is not possible to identify the effect of particular elements of each state's approach that lead to either a successful or unsuccessful expansion, or to infer that what worked in one state would work in another. Instead, the “intervention” in question is the flexibility that states were granted under the HIFA waivers. Because states were not assigned randomly to participation in the HIFA demonstrations, the choice of control groups is particularly important. We compare the postimplementation experience of the target population in HIFA states to (1) the preimplementation experience of the same group in the same HIFA states; (2) the pre- and postimplementation experience of individuals in HIFA states lying just outside the HIFA income eligibility ranges in their states; and (3) the experience of similar individuals in states without HIFA demonstrations. We find that our results are robust to different model specifications.