That tax expires next year just as the biggest federal health care changes in generations will be rolling out nationwide for adults and children alike.
Healthy Kids director Cathy Kaufmann says the program serves as a model for the changes ahead. And that her office remains key to the state’s goals.
“It should be easy for us to reach out now and enroll their parents too,” she says.
So what becomes of Healthy Kids and how successful has it been?
Kaufmann characterizes the program as an unvarnished triumph, and Healthy Kids has made it easier for more than 100,000 low-income kids to sign up for state-funded insurance. But an analysis by The Oregonian also shows a mixed picture:
- A key goal — signing up uninsured middle-income kids — has largely been a bust;
- an outreach program paying nonprofits $5 million has faced frequent questions over spending;
- and Healthy Kids compared disparate studies improperly, exaggerating its success.
The tax that funded Healthy Kids raised about $65 million a year. The money qualified for federal matching funds and paid for increased advertising. The new Office of Healthy Kids merged existing state programs for children, including the Oregon Health Plan. It also offered subsidized commercial insurance.
The new law funded 112 hires, which included more than a dozen administrators and outreach managers.
Healthy Kids streamlined applications and loosened eligibility. Applications were mailed to parents getting food stamps, proof of income was eased, and maximum earnings for a family of four increased to about $44,000 for state coverage. Healthy Kids provided standard medical care, including prescriptions, dental, vision and mental health for children under 19.
The program launched just as the recession drove more people to seek government help. Many states reported large gains of low-income kids on state insurance — 3.5 million nationally — following a 2009 federal law that increased matching funds and paid states to cut red tape.
When Wendy Miller of Portland was laid off as a marketing manager in 2010, she found Healthy Kids. Her son Noah, 8, had care for everything from strep throat to an infected finger, and “knowing he had insurance was a huge relief,” she says.
Healthy Kids vowed to sign up 80,000 kids by the end of 2010, and did. Since, enrollment numbers have swelled further for a net gain of about 110,000. To pay for the gains, the federal government awarded Oregon more than $30 million in performance bonuses.
But signing up low-income kids was just one goal of Healthy Kids. A major selling point was extending insurance to middle-income children as well.
Three years in, this push — called Healthy Kids Connect — has signed up about 6,000 children, compared to the 34,000 the state initially projected.
The state contracted with private insurers to offer the Healthy Kids Connect policy, for a subsidized rate of around $35 to $50 a month; families of four could earn between $44,000 and $66,000. More affluent families pay full cost, which runs as much as $475 per child per month.
This was the truly new part of Healthy Kids. When Kaufmann was hired, a major goal was boosting enrollment “especially in Healthy Kids Connect,” according to an auditor‘s interview with her last year. Now, Kaufmann blames cost — even of subsidized coverage — and also suspects uninsured middle-income kids dropped into poverty during the recession.
In 2009, supporters used the prospect of hefty enrollment in Healthy Kids Connect to pitch private insurers on the new tax to fund it. Insurance executive Ruth Bauman tracked Healthy Kids Connect while working for Clear One Health Plans. She says it was poorly designed and marketed, and had too much red tape.
“People are disappointed it wasn’t more successful,” she says.
Healthy Kids has paid more than $5 million to 34 nonprofits that directly helped with about 9,000 applications since 2009. The nonprofits paid outreach workers and expenses to promote Healthy Kids at public events and assist with enrollments.
Twelve nonprofits have landed in hot water. While Healthy Kids didn’t seek repayment, it terminated contracts with at least three, put two on probation and at least three others resigned under scrutiny:
- Progressive Options of Newport, paid $23,000, dropped out within months when a state audit found a small amount of misspending and falsified records; the manager was fired.
- Strengthening Rural Families of Philomath, paid $61,000, claimed credit for applications not turned in; was terminated for not backgrounding an employee.
- YWCA Salem, paid $167,000, was terminated for not backgrounding an outreach worker with a history of forgery; the worker was arrested for theft while having access to personal information through Healthy Kids.
- Ecumenical Ministries of Oregon, paid $126,000, was terminated for non-performance, including only four verified applications.
In addition to EMO, several other Portland nonprofits that focus on African Americans have signed up few kids: Urban League (paid $154,000; assisted with 158 applications; SEI ($71,700; 20 applications), Black Parent Initiative ($40,500; 15 applications), the African American Health Coalition ($154,700; 160 applications) and Oregon Action ($182,600; 179 applications).
Moreover, other groups report more success, like Roseburg’s United Community Action Network ($237,000, 569 applications) and Washington County’s Youth Action, Inc. ($237,000, 804 applications). Adding further contrast, Healthy Kids’ “application assisters” get paid $75 per family they enroll.
Urban League leaders have said it’s hard to find and enroll uninsured African Americans.
These nonprofits may be hitting a point of diminishing returns, says Sandra Peterson, a recently retired Multnomah Education Service District official who worked with Healthy Kids. Her read of school statistics indicates the bulk of African American children in Multnomah County are insured. A 2010 Census Bureau survey supports that. It counts only 253 uninsured African American kids in the county.
Rep. Kim Thatcher, R-Keizer, has questioned Healthy Kids officials at oversight hearings. She wonders whether the program is getting the best bang for its outreach buck, and is skeptical of its claims of success: “Like any other agency they want to justify their existence.”
Nonetheless, Healthy Kids director Kaufmann says the program is paying off, and outreach must continue.
“It’s important that we always continue to reach out to enroll eligible kids,” she says. Otherwise, “it doesn’t take long for enrollment numbers to go down.” Besides, she says, Healthy Kids has ramped up oversight and is eliminating disparities.
While the numbers of kids on state-funded insurance has climbed significantly, Healthy Kids has exaggerated its impact on the overall rate of kids’ insurance, whether state or private.
At the start in 2009, a U.S. Census Bureau survey estimated 104,000 Oregon kids were uninsured, or 11.3 percent. Healthy Kids officials promised to cut it to 5 percent.
Their news release declared victory last year: “Healthy Kids Program Cuts Percentage of Uninsured Oregon Children in Half.” It reported 52,000 kids or 5.6 percent uninsured. The press picked it up, and Health and Human Services Secretary Kathleen Sebelius repeated it.
The claim, however, skews the statistics, according to experts and to state documents. While the 104,000 number comes from the federal census survey, the figure Healthy Kids cites to claim success comes from a state-funded survey with a different methodology, which experts say likely led to the lower estimate.
“You can’t compare the two in that way. They aren’t apple-to-apple comparisons,” says Kathleen Call, an expert at the University of Minnesota’s State Health Access Data Assistance Center familiar with both studies. “The kind of comparison that they’re making is just sloppy.”
Last summer a state Office of Health Policy Research analysis agreed the surveys can’t be compared and the state survey likely resulted in a lower number.
Kaufmann sticks by the claim and calls the surveys “very similar.”
An apples-to-apples comparison doesn’t exist yet. A 2010 federal survey counted 84,000 uninsured children, or 9.2 percent, a 2.1 percentage-point drop. The 2011 federal survey will be released in September.
In January, lawmakers will take up the tax on insurance premiums that funds Healthy Kids, and decide whether to renew it at a time insurance costs will be under more pressure than ever, thanks to the federal health reforms. Kaufmann says Healthy Kids’ job isn’t finished.
“We need to make sure that they have access to care, that they have quality of care and that their health outcomes are improved — and we do that as cost-effectively as possible.”