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PEDIATRICS Vol. 104 No. 3 September 1999, pp. 507-513

Crowd Out: Evidence From the Florida Healthy Kids Program

Received Nov 23, 1998; accepted Mar 30, 1999.

Elizabeth Shenkman*, Dagger , Richard BucciarelliDagger , Donna Hope Wegener*, Rose Naff§, and Steve Freedman*

From the * Institute for Child Health Policy; the Dagger  Department of Pediatrics, University of Florida; and the § Florida Healthy Kids Corporation, Gainesville, Florida.

Objective.  To determine the percentage of children who had insurance coverage in the 12 months preceding enrollment in a state-subsidized program; the percentage of parents who had access to employer-based family coverage; and the cost of the families' share of the premium per month.

Methods.  We randomly selected 930 families whose children were enrolled in the Florida Healthy Kids Program for a period of between 1 and 3 months and conducted telephone interviews with them in 1998 about their children's insurance coverage before program entry and their access to employer-based family coverage. There were 653 families in the final sample.

Results.  Only 5% of the children had employer-based coverage before program enrollment. However, 26% had access to family coverage through their employers with the family share of the premiums representing on average 13% of their incomes. Access to employer-based coverage varied significantly by family income.

Conclusions.  Throughout the development of the State Children's Health Insurance Program legislation, policy analysts expressed concern that families may crowd out or substitute a subsidized state plan for employer-based coverage. This substitution could result in fewer improvements in access to care and health status than were anticipated, because families are simply moving to a different form of health insurance. There is some degree of crowd out in the Healthy Kids Program. The economic burden to near-poor families to purchase employer-based coverage is significant. Some degree of substitution may need to be tolerated to ensure that children receive needed health insurance.  Key words:  children's health insurance, managed care, Title XXI, crowd out.




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