Kansas Health Institute | Information For Policy Makers. Health for Kansans.

TOPEKA — State officials will ask the federal government for permission to raise HealthWave premiums.

If approved, the proposed increase — $40 per family per month — would affect almost 14,000 children in more than 7,700 families across the state.

“I think it’s safe to say that if HealthWave premiums went up $40 a month, a lot of families would not be able to stay on the program,” said Lisa Schultz, a health specialist with SEK-CAP, a Girard-based program that oversees Head Start services in 12 counties in southeast Kansas. “People who are paying $20 or $30 now would have to pay $60 or $70 — that’s more than double what they’re paying now. For the families we’re talking about that’s a lot of money.”

HealthWave is the state-run health insurance program for children in low- and modest-income families. It is funded by Medicaid and the Children's Health Insurance Program.

Whether the Centers for Medicare and Medicaid Services (CMS), which oversees those programs, will allow the increase remains to be seen.

The recently enacted federal health reform law requires that states maintain their current eligibility criteria. Whether that would be interpreted to prevents states raising their premiums is not yet known.

“The intent is clear — it’s to at least maintain coverage and not doing anything that’s going to reduce coverage,” said Collene Chapman of the Georgetown University Health Policy Institute’s Center for Children and Families. “But within that intent there is room for interpretation and that’s what’s going on now. There’s a lot of research that shows that when premiums go up by as little as $5 or $10 a month, there’s a drop off in enrollment. The question now is how much of that reduction is within the law.”

CMS, she said, is looking for ways to balance insuring as many children as possible with helping states come up with ways to pay for the coverage.

“At this point, we really don’t know what CMS will do,” Chapman said. “But, still, $40 is a pretty sizable increase.”

The increase, contingent on CMS approval, was ordered by the Legislature during deliberations on the budget for the Kansas Health Policy Authority, the state agency that oversees HealthWave.

“We do anticipate a decrease in participation,” said Peter Hancock, a spokesman for the health policy authority.

Hancock said the agency plans to ask CMS to approve the increase in time for a July 1 implementation.

The request, he said, “is still being worked on, but they’re aware it’s coming. It’ll be a fairly simple amendment.”

By increasing premiums, legislators were able to cut $11 million from the Kansas Health Policy Authority’s budget, including $2.8 million from the State General Fund.

If CMS denies the increase, the directive assumes legislators will restore all or part of the $11 million during the 2011 legislative session, which convenes in January, that the health policy authority will find other ways to cut spending, or a combination of the two.

HealthWave covers more than 40,000 Kansas children.

About 26,000 of them are in families living at or below 150 percent of the federal poverty level, or $2,289 a month for a family of three. They are eligible for Medicaid. Their parents do not pay premiums now and would not be affected by the proposed increase.

Another 14,000 children are in families with incomes between 151 percent and 241 percent of poverty guidelines. Their coverage is funded through the Children’s Health Insurance Program. Their parents would be affected by the proposed increase.

Currently, these families’ monthly HealthWave premiums vary by household income:

• $20 for those between 151 percent and 175 percent of poverty;

• $30 for those between 176 percent and 200 percent of poverty;

• $50 for those between 201 percent and 225 percent of poverty;

• $75 for those between 226 percent and 241 percent of poverty.

The proposed increase would add $40 to the monthly payment in each category.

“We don’t know yet but one of the issues that might come up is that when the $20 premium goes to $60 that’s a 200 percent increase,” Hancock said. “But when you add $40 to the $75 premium that’s considerably less than a 200 percent increase. That may have to be adjusted.”

Sherry Mort, 38, lives in Arkansas City. She and her husband have a teenage daughter who’s on HealthWave.

“If her premium went up $40 — that’s almost as much as what her car insurance is now — there’s no way we could afford that,” Mort said. “My husband’s lost his job. I still work, but there’s a lot we can’t afford and we’re better off than a lot of people.”

Mort said she’s hoping CMS denies the increase.

“There are a lot of people who just can’t make enough money to pay for health insurance," she said. "HealthWave is the only thing that’s out there for their kids. If you take that away, they just won’t take their kids to the doctor because when you start racking up a bunch of medical bills, it gets crazy in a hurry. A lot of parents just won’t put themselves in that situation.”