The bill would create a new public health insurance program (new title XXII of the Social Security Act), modeled after Medicare, called MediKids that would be available to all children born after 2008. These children would automatically be enrolled in Medikids but could transfer to equivalent or better insurance programs, including private insurance, SCHIP, or Medicaid. Eligibility for older children in Medikids would be phased in over five years.
Name of new program
MediKids
Target Population(s)
Children
Eligibility
Children born after December 31, 2009 would be eligible until they reached age 23. Eligibility would be phased-in for children born before December 31, 2009, beginning with children under 6 years of age in the first year; up to 11 in the second year; up to 16 in the third year; up to 21 in the fourth year; and up to 23 in the fifth and all subsequent years. The child would have to be a citizen or legal, permanent resident of the U.S. Children would be automatically enrolled at the time of birth. The bill includes provisions to coordinate coverage for those eligible who are also eligible for Medicaid or SCHIP coverage.
Type of Coverage
The benefit package would be specified by the Secretary of HHS, but at a minimum would have to include benefits available under Medicare; all benefits required under Medicaid (including early periodic screening, diagnostic and treatment services); and prescription drugs and biologicals which are not less than the benefits for such drugs and biologicals under the Blue Cross Blue Shield standard option offered under the Federal Employees Health Benefits Program (FEHBP) during 2007. Cost-sharing (deductibles, coinsurance, and copayments) would have to be substantially similar to the cost-sharing applicable under the health benefits coverage in any of the four largest FEHBP plans, including an out-of-pocket limit for catastrophic expenditures for covered benefits. However, no cost-sharing could be imposed on early periodic screening and diagnostic services. In addition, no cost-sharing could be imposed on children in families with incomes at or below 150% of the federal poverty level. Cost-sharing would be reduced by 75% for children in families with incomes below 200% of poverty; and by 50% for children in families with incomes below 300% of poverty.
There would be a refundable tax credit equal to any excess over five percent of the family’s adjusted gross income that is paid to cover cost-sharing requirements. (This excess amount could not then also be taken into account in computing the individual medical expense tax deduction or the tax deduction for health insurance premiums paid by the self-employed.)
Benefits could be provided through enrollment in private health plans, similar in concept to Medicare Advantage. Enrollees could also receive MediKids benefits through a care coordination program established by the Secretary.
Premiums
There would be a monthly MediKids premium established each year in an amount computed to cover 25% of average per capita MediKids’ costs. There would be a total exemption from the premium requirements for children in the lowest income families (incomes below $20,535 with 1 MediKid; $25,755 with 2 MediKids; $30,975 with 3 MediKids; and $35,195 with 4 or more MediKids). Families with incomes up to twice the exemption amounts would pay premiums reduced proportionately by the amount by which their income exceeded the exemption levels. Income amounts would be increased annually for inflation. Premiums would be collected through the federal tax system, and families receiving earned income tax credits would pay any premiums due through an adjustment to those credits.) In no event would any taxpayer be required to pay a Medikid premium in excess of an amount equal to five percent of the family’s adjusted gross income.
Government subsidies
The government would subsidize the premiums for children in lower income families (see above).
Financing
MediKids coverage would be financed by enrollee premiums and general federal revenues. A MediKids Trust Fund would be established similar to the Medicare Part B Trust Fund. Within one year after enactment, the Secretary of Treasury would be required to propose a gradual schedule of progressive tax changes to fund Medikids as the number of enrollees grew. The bill includes a state maintenance of effort requirement whereby states could not reduce their eligibility standards for Medicaid or SCHIP below those in effect on the date of enactment.
Effective date
Medikids benefits would first become available January 1, 2010.
Administration
Would be administered by the federal government in a manner similar to the Medicare program.
Other provisions in bill
The bill provides for the development of child health improvement activities including the establishment of quality measures, promotion of best practices and funding for related activities.
The Secretary, with assistance from the Medicare Payment Advisory Commission (MedPAC) and input from appropriate child health providers and experts, would develop and implement payments and reimbursement methodologies consistent with those applied under fee-for-service (original) Medicare.
The bill would add two members to MedPAC who would have to be experts in children’s health care.
The GAO would be required to periodically submit to Congress reports on the operation of Medikids, including on the financing of coverage provided under the program. In addition, the Medicare Payment Advisory Commission would be required to report periodically to Congress on the program.