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

Effective Date:

Approval Date: 57 8.5. Describe how the state will ensure that the annual aggregate cost-sharing for a family does not exceed 5 percent of such family’s income for the length of the child’s eligibility period in the State. Include a description of the procedures that do not primarily rely on a refund given by the state for overpayment by an enrollee: (Section 2103(e)(3)(B)) (42CFR 457.560(b) and 457.505(e)) During the first contract year the carriers’ premiums were not adjusted to reflect the cost share cap of 5%. Therefore the state will employ one or more of the following three methods to ensure enrollees do not exceed the yearly 5% out of pocket maximum:

(1) The state will establish an arrangement with each carrier to track copayments and coinsurance. DHS will provide OPHP with income information (used for eligibility determination) for each family. This will give OPHP the basis for the family’s 5 percent threshold.

OPHP will then calculate the 5 percent maximum for each family approved for Healthy KidsConnect using the family’s annual income. The state will subtract the family’s yearly premium share from this amount. The difference between the 5% maximum and the yearly premium share will be the family’s net liability for cost sharing. Using this calculation, OPHP will determine which enrolled families might exceed their 5% maximum.

The state and carrier will then establish a mechanism to track actual coinsurance and copayments. Oregon will require that all carriers work to ensure that claim payment systems are updated in real time, so that out of pocket costs are not exceeded inadvertently. Carriers will send OPHP a regular accounting of actual family out of pocket costs for tracking purposes;

(2) Insurers will include the enrollee cost sharing maximum in their actuarial calculations and adjust premium costs to account for the increased risk;

(3) The state will adjust subsidy levels to offset the enrollee cost sharing limits.