In premium assistance programs, an agency, usually a public program such as Title V, Medicaid, or CHIP, pays all or part of a family or child’s private health insurance premium. These programs are often implemented for low-income working families who cannot afford the expense of family coverage under an employer-sponsored plan. Premium assistance programs have grown in popularity with the advent of the Children’s Health Insurance Program (CHIP), in part as a strategy to ensure that low-income families do not drop their employer-sponsored coverage in order to obtain less costly CHIP coverage for their children, and also to help support families to maintain employment.
The premium assistance programs we cover here are separate from the premium tax credits offered to those within a specific income eligibility range from the Health Insurance Marketplace. If you would like to know more about Marketplace plans and federal health insurance premium tax credits, visit HealthCare.gov.
A key consideration when implementing a premium assistance program is how information about the program will reach families. In many states, Family-to-Family Health Information Centers and Title V CYSHCN programs refer families to the program. Involving employers and private insurance representatives in the referral process can increase program accessibility.
As of January 2023, 38 states have premium assistance programs that are administered under state Medicaid and/or CHIP programs. Using a formula that determines cost-effectiveness for the state, many of these state Medicaid programs provide a Health Insurance Premium Payment Program for any resident who is eligible for Medicaid and who has access to employer-sponsored insurance, either through their own job or through a family member.
The Massachusetts Medicaid program, MassHealth, provides premium assistance for eligible members who have access qualifying private coverage that meets a minimum set of covered benefits. This private coverage could be purchased through an employer, COBRA administrator, or an unsubsidized child-only individual plan on the Massachusetts Marketplace. For CYSHCN, if qualifying private insurance does not cover a MassHealth covered benefit, Medicaid will pay for that service.
South Carolina Medicaid has a Health Insurance Premium Payment Program (HIPP) for individuals who have private insurance and who are also eligible for Medicaid, including children with disabilities who are eligible for the state’s TEFRA program. The Medicaid agency assesses the cost-effectiveness of paying for private insurance premiums for an individual or family and reevaluates the cost effectiveness of doing so every 6 months. Individuals who are eligible for premium assistance remain under fee-for-service coverage and are not enrolled in a managed care plan.
Title V Funded
The Title V CYSHCN programs in Alabama and Michigan assist families who meet financial eligibility criteria in paying employer-sponsored health insurance premiums. Alabama’s program also covers CHIP premiums for some families.
Other Title V programs provide premium assistance to those with specific diagnoses who meet financial eligibility criteria. The Kentucky, South Carolina, and Virginia CYSHCN programs contract with Accessia Health, formerly Patient Services, Inc., to offer insurance case management and premium assistance to those with bleeding disorders. Additionally, Kentucky’s contract assists individuals with cystic fibrosis.
In addition to premium assistance, some Title V CYSHCN programs use their funds to reimburse families for deductibles and co-pays for services delivered to children.