care services but excludes more costly benefits such as mental health, nursing home, and home health care services. Although inpatient services were originally excluded, they were added to the list of covered benefits in 1997. At the same time, the state extended eligibility in the Child Health Plus program to children up to age 18, thus more than doubling the number of eligible children (Gehshan, 1997).

Among the advantages of New York's Child Health Plus program are its simple application process, which makes it easy for families to enroll in the programs. In contrast to the Medicaid program, providers are reimbursed at private insurance rates established by the plans. In addition, children and families covered under this program are able to avoid the stigma and the administrative burdens that are often associated with the Medicaid program (Hill et al., 1993).

Tenn Care

On January 1, 1994, the state of Tennessee replaced its Medicaid program with a comprehensive health care reform plan called Tenn Care. This program extended health care coverage to approximately 1 million people in the Medicaid population and to 400,000 uninsured people through a system of managed care. To implement the program, the state government contracted with 12 managed care organizations to deliver all Medicaid services and to handle claims processing in exchange for a monthly payment per enrollee.

Tenn Care initially had an enrollment cap of 1.3 million, which was later raised to 1.4 million. By January 1, 1995, Tenn Care reached 90 percent of its target enrollment and closed enrollment to uninsured individuals (The Commonwealth Fund, 1996). It reopened to children in April 1997, and state officials anticipate that about three fourths of the 68,000 eligible children will be enrolled in the program (Gauthier and Schrodel, 1997).

Criticism of Tenn Care has been focused on the inadequacy of the provider networks and the implementation process. According to a 1995 report of the U.S. General Accounting Office, providers receive 20 to 50 percent less than Medicaid payments for some forms of surgery and X-rays, although fees for visits and consultations are slightly higher than those paid by Medicaid. As a result of low levels of state payments, almost half of the managed care companies participating in Tenn Care reported losing money in the first year of the program. The largest participant, Blue Cross/Blue Shield, reported a loss of $8.8 million (GAO, 1995).

After its initial problems with implementation, the proportion of the population with insurance in Tennessee is among the highest of any state. The overuse of emergency rooms and inpatient hospitalization has dramatically decreased. Patients report that it is easier to develop a relationship with their physicians because they now have a regular primary care provider. Some estimates suggest that Tenn Care has saved as much as $1 billion compared with the projected Medicaid costs, which were increasing at an annual rate of 20 percent (Gauthier and Schrodel, 1997).

Private Programs

Privately sponsored programs have been developed by health plans across the country. Among the plans that have been involved in children's health programs are Aetna Health Plan, Atlanta; Blue Shield Plans in California, Colorado, Georgia, North Carolina, and Ohio; Group Health Cooperative of Puget Sound; Harvard Pilgrim Health Plan; Kaiser Permanente in California, Colorado, Maryland, Virginia, and the District of Columbia; Physicians Health Plan of Greater St. Louis; Prudential Health Care Plan of the Mid-Atlantic; US Health care; and others (AAHP, 1998). These programs have included school-based health centers and fitness programs, immunization programs, disease management programs for inner-city asthmatic children, teen substance abuse programs, and AIDS education programs.



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