“This increased enrollment is attributable to expanded outreach by the Department of Human Services (DHS) and our community partners, and to our raising of income eligibility for Medicaid,” DHS Director Lillian Koller said.

The Lingle-Aiona Administration raised income eligibility for Medicaid by 50 percent in October 2006 after securing new Federal funds to expand coverage.

Income eligibility was raised by another 50 percent in January 2008 as part of a three-year pilot project to provide health coverage for uninsured “gap group” children who do not qualify for Medicaid, typically because their family incomes are too high. The State Legislature approved the pilot project and Governor Linda Lingle signed it into law in June 2007.

Under the new Medicaid eligibility guidelines, families with incomes up to 300 percent of the Federal Poverty Level (FPL) can now obtain free and comprehensive health coverage for their children. A family of four, for instance, can earn over $73,000 annually and qualify.

Due to this progress in increasing Medicaid enrollment, the Administration is phasing out one portion of the health coverage pilot project. As of Nov. 1, the Administration will discontinue state funding for the “Keiki Care Plan,” a basic health insurance program operated by HMSA as a public-private partnership. The state pays HMSA $25.50 per month for each child enrolled in the plan. With the Keiki Care Plan, no federal matching funds are available.

In addition to a lack of federal funding, the Administration is concerned about the Keiki Care Plan’s enrollment process, which does not assure that children are ineligible for Medicaid and its superior benefits. The Keiki Care Plan, by contrast, has many hidden costs for parents through co-payments and coverage exclusions.

As an example, physician office visits are free and unlimited for Medicaid clients. Under the Keiki Care Plan, the cost is $7 per visit with a limit of just 12 visits per year. Also, hospital visits are free and unlimited for Medicaid patients. Under the Keiki Care Plan, hospital visits cost $100 per day with a limit of just five days per year.

“During these uncertain economic times, it is important for the state to prioritize its spending by helping families with the greatest needs,” Koller said. “We also want to optimize our limited resources by leveraging state funds to bring in additional federal funds, which we can do by enrolling more children in Medicaid.”

Another reason the Administration decided to discontinue state funding for the Keiki Care Plan is because the pilot program only had limited success in achieving the goal of covering so-called “gap group” children. These children do not have health insurance and are ineligible for Medicaid, typically because their family incomes are too high.

An estimated 85 percent of the 2,000 children enrolled in the Keiki Care Plan previously had coverage through HMSA’s Children’s Plan, which parents can now purchase for $55 per month.

“Since these children already had insurance, they were never a ‘gap group’ that needed state funding for HMSA to cover them,” said Linda Smith, Governor Lingle’s senior policy advisor.

DHS has directly contacted all families participating in the Keiki Care Plan, informing them that Medicaid’s income eligibility is now 300 percent of the FPL and encouraging them to apply for free and comprehensive Medicaid coverage for their children.

In addition, DHS is urging HMSA to continue offering the Keiki Care Plan by giving families who are ineligible for Medicaid the option of paying $25.50 monthly premiums to cover their children.

“If HMSA agrees to this request, the only change from the current Keiki Care Plan would be that parents, not the state, would share the premiums with HMSA,” Koller said. “That way, families who earn too much to qualify for Medicaid, or are ineligible for any reason, could receive basic health insurance for their children at a more affordable cost.”

STATE FUNDING CONTINUES FOR OTHER PARTS OF PILOT PROJECT While state funding will stop next month for the Keiki Care Plan, the Administration will continue supporting the other two portions of the three-year pilot project to expand health coverage for children.

Accordingly, the Administration will still provide free Medicaid insurance for children from families earning between 251 and 300 percent of the FPL. These families previously had to pay modest monthly premiums to obtain Medicaid coverage for their children.

The Administration will also continue offering free Medicaid insurance for children of legal immigrants who earn up to 300 of the FPL. Under Federal guidelines, these children would not have qualified for Medicaid, so the State decided to pay their insurance premiums.

“Because of these expanded income limits, many families may not realize their children can now receive free and comprehensive Medicaid coverage,” Koller said. “We urge parents to contact DHS so we can determine if their children are eligible.”

To learn more, residents can call 524-3370 on Oahu, or 1-800-316-8005 or 2-1-1 statewide to obtain a Medicaid application form and consult with an outreach worker who determines eligibility. Information is also available online at www.med-quest.us and at www.coveringkids.com.

Toni Schwartz is a spokesperson for the state Department of Human Services'

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