Read the full report on cost sharing here, which includes detailed analysis and sources.
The Department of Healthcare and Family Services (HFS) has proposed imposing cost sharing on families in the MFTD waiver who earn above 150% of the federal poverty line ($28,635 for a family of 3 in 2012). HFS believes that families who are "wealthy" need to show an effort to contribute to their child's care, even though these families have already made countless financial, emotional, and physical sacrifices to keep their children at home.
HFS has proposed imposing copayments on private duty nursing, thereby selectively taxing only the families with the most vulnerable children in the state. Any family earning more than 150% of the federal poverty line ($28,635 for a family of 3) would be forced to pay 5% of their family income in cost sharing.
In principle, MFTD Waiver Families opposes the implementation of cost sharing for the MFTD waiver program based on research that strongly demonstrates that such strategies do not raise sufficient revenues to be worthwhile, and often threaten the medical stability of children with complex medical needs.We urge Illinois to commission a full analysis of the financial, legal and medical consequences of cost sharing before adopting any such plan. Precedent demonstrates the value of such an approach.
When exploring cost sharing in 2007 for another Illinois waiver, the Children’s Support Waiver, Illinois commissioned Navigant Consulting to evaluate the ramifications of such a policy, and based in part on those findings, chose not to impose cost sharing in the Children’s Support Waiver. Florida recently explored the idea of adding cost sharing to its children’s waiver programs and determined cost sharing would result in net losses after commissioning a detailed analytic report. In light of these facts, we feel it would be irresponsible to implement cost sharing without a detailed analysis of the issue.
Cost sharing typically takes the form of either premiums/fees based on family income, or copayments based on service usage. The following issues arrive when cost sharing is imposed.
- Cost sharing does not raise revenue and may actually cost the state more money to implement than it will receive in revenues.
- Families of children with complex medical issues already have extremely high out-of-pocket costs.
- Cost sharing can, if not carefully administered, incentivize families to drop private insurance policies, leading to higher costs to the state. We estimate the state would have to spend an additional $1,005,200 in health care costs if only 10 children drop private insurance, which far exceeds the likely revenues brought in by cost sharing.
- Cost sharing has been shown to decrease usage of healthcare services, leading to increased morbidity and mortality, as well as costly hospitalization of these children. A single 3-month long hospital stay for one child caused by decreased usage of healthcare services will likely cost more than all the revenues the state would gain from cost sharing payments.
We emphatically oppose Copayments and will not agree to any plan that includes copayments for the following reasons:
- Copayments on private duty nursing, regardless of their intent, will impose extreme financial and administrative burdens on nursing agencies. This, in turn, is very likely to prompt agencies to refuse to take MFTD Waiver cases, forcing children into hospitals/institutions to receive their medically necessary care. Rather than alleviating the current nursing crisis in the waiver program, this measure is likely only to exacerbate it and put children at risk.
- No children’s waiver programs in any of the 50 states currently impose copayments.
- No states charge a copayment for private duty nursing for children in waivers or categorically needy children to our knowledge.
- Because copayments are assigned based on utilization of medically necessary care, families with the most vulnerable children are the most likely to be financially burdened, particularly in the lower FPL ranges. These are also the families most likely to abandon jobs and/or insurance if pressed to the economic brink, putting the state at even higher liability for their children’s medical costs.
Family Fees or Premiums represent a fairer cost sharing strategy, mostly because the sharing is administered more perfectly according to means, rather than a child’s utilization of services. However, only 7 states to our knowledge currently impose parent fees or premiums on children in waiver programs through various mechanisms, and precedent suggests that CMS may not approve premiums due to Affordable Care Act regulations.
While we understand that HFS prefers copayments to premiums because of the costly administrative burden collection of premiums poses to HFS, HFS’s plan to shift this administrative burden onto nursing agencies is alarming. As noted above, nursing agencies are already struggling to provide sufficient nurses to staff the current MFTD needs, and the added burdens of both administering copayments and coping with financial losses due to unpaid copayments will further strain already stretched resources. Moreover, such costs have often been the reason that states did not pursue any kind of cost sharing or copayments for these small populations. We believe that it is unwise and shortsighted to further tax the direct care component of the MFTD waiver program in an effort to overcome an inherent basic weakness of the cost sharing approach.
The bottom line: imposing cost sharing will likely cost the state more money to administer than it will bring it, will cause poorer health outcomes, will cause families to drop private insurance, and may not even be allowable by the federal government. Imposing fees on families solely for the sake of "philosophy" provides no financial benefits to the state and hurts families and nursing agencies.