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Effective Date:

Approval Date:

Updated and amended effective August 24, 2001

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Strategy to limit substitution - children under the age of two: In addition to monitoring for overall level of substitution, we will compare the data for the 0 - 2 year olds with data for 2 – 5 year olds to determine if the no period of uninsurance for the 0 – 2 year olds is significantly increasing the rate of substitution in Pennsylvania. If the rate of substitution in the under-2 year olds approaches one and a half times that for 2 – 5 year olds, Pennsylvania will consider implementing a one or two month period of uninsurance. If the rate of substitution continues to grow in the under-2 year olds to a point of twice that of the 2 – 5 year olds, Pennsylvania will consider increasing the period of uninsurance incrementally up to six months.

Cost sharing requirements (premiums and copayments) also apply to the under age two group.

4.4.4.3. Coverage provided to children in families above 250% FPL: describe how substitution is monitored and identify specific strategies in place to prevent substitution.

Please see 4.4.4.2.

If Pennsylvania finds a significant level of substitution (10% of enrollees dropping or being dropped from private coverage), it will reevaluate the exceptions to the waiting period to determine if they are contributing to substitution and modify them as necessary. We would also consider incrementally increasing the uninsured period up to an additional 6 months to reverse the substitution trend.

Another strategic option that is available is to increase the cost sharing requirements for this target population to deter substitution.

Pennsylvania’s Office of Health Care Reform is nearing the end of its study to develop a strategic, time-phased plan to provide affordable, accessible quality health care coverage for all Pennsylvanians. It is expected that this strategic plan will include viable suggestions on how to best reform Pennsylvania’s overall health care system, negating any incentives for employers or employees to drop employer-based health insurance coverage.