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Model Application Template for the State Children’s Health Insurance Program

Effective Date:

October 1, 2009 27 Approval Date: November 19, 2010 The State of Alabama assures that insurance provided under ALL Kids will not substitute for coverage under group health plans. Alabama implements several measures to minimize the effects of crowd-out in the CHIP program.

The joint application requires that the applicant state whether or not s/he has current health insurance and whether s/he has terminated that insurance within the past 90 days and the reason for this termination.

The ALL Kids program has a waiting period policy to deter crowd-out. Children, whose private coverage is voluntarily dropped, have a 3-month waiting period before they can enroll in ALL Kids. The CHIP Data unit monitors the percentage of enrollees who are subject to the three-month waiting period due to voluntary termination of other coverage through both internal data systems. The data unit also utilizes ongoing enrollee surveys to quantify the incidence of crowd-out. There are 4 exceptions to the waiting period policy which pertain to minimizing crowd-out: (1) children whose previous private coverage is through an individual policy; (2) children whose previous private coverage is through COBRA; (3) children whose previous private coverage is through the Alabama Child Caring Foundation; (4) children whose previous private coverage lifetime benefits limits have been met.

The ALL Kids program also requires a premium contribution for all children with the exception of Native Americans. This family contribution is a disincentive for families to drop group employer coverage for the ALL Kids program. Additionally, since the ALL Kids package was designed to be similar to the standard benefit levels offered through most employers, there is no incentive to drop employer-based dependent coverage in favor of ALL Kids based on benefit levels alone.

In addition, as a final review, Blue Cross Blue Shield reviews all applicants (sent to it) for enrollment in another Blue Cross Blue Shield plan or coverage terminated within the past 90 days. Since Blue Cross Blue Shield currently provides 85% of the private health insurance coverage in the State, ALL Kids should have a high success rate in identifying children with private health care coverage. Approximately 5% of applicants are denied ALL Kids coverage due to having other health insurance currently or in the past three months.

Because enrollment in ALL Kids PLUS is limited to enrollment in the basic ALL Kids Program, all statements above which apply to the basic program also apply to ALL Kids PLUS.

4.4.4.4.  If the state provides coverage under a premium assistance program, describe:

The minimum period without coverage under a group health plan, including any allowable exceptions to the waiting period.

The minimum employer contribution.