Health Insurance Premium Payment (HIPP) Programs:
Assistance Paying for Private Insurance for
Kids with Complex Medical Issues
Most states have a program, sometimes well-hidden and rarely advertised, that will pay for your private insurance premium. While not all children are eligible, most children who have complex medical issues and who are heavy users of doctors, therapists, and hospitals are able to access this program. It may not save every family a bundle, but you can expect to receive at least a few hundred dollars a month.
What is HIPP?
HIPP stands for Health Insurance Premium Payment. It is a program that can save both states and families money by shifting some of the costs for care to private insurance plans. States choose to pay the monthly cost of health insurance premiums for your entire family, knowing that the private insurance will then pick up the majority of costs for your child with complex medical needs.
HIPP is for families who have one or more individuals with expensive health care costs, typically due to complex or chronic medical conditions. The individual who is medically complex must receive Medicaid coverage, either through standard financial eligibility, a Medicaid waiver, a state-based program, or a buy-in program. The family must also have (or have access to) comprehensive private insurance.
HIPP is based entirely on the mathematical cost effectiveness of your care. If the state can save money by paying for your private insurance premium, then it is in the state’s interest to make sure you can keep your private insurance. The state pays for your premium, knowing that your medical costs will then be primarily covered by your private insurance plan instead of Medicaid. As long as the monthly cost of your premium is less than the cost Medicaid would have to pay if you did not have private insurance, the state will save money by using HIPP.
In most cases, HIPP will reimburse or directly pay the premiums for your private insurance plan. If you are receiving extended coverage under the COBRA program, you can also use HIPP to pay your COBRA premiums. HIPP programs typically reimburse for family coverage when the individual who is medically complex is a child. Thus, the state will pay the insurance premium for your entire family.
Finally, even if you don’t have private insurance, if you are eligible to obtain it but can’t afford it, your family can use HIPP to cover your premiums. There are several ways to obtain private health insurance, including the following:
- If you can only afford employer-based private insurance for yourself but you cannot afford to pay the premium for family coverage
- If your child could be covered under a policy from a divorced/separated parent
- If your family is eligible for COBRA coverage
- If your child can obtain health insurance through a settlement or trust
- If you are eligible to sign up for family coverage but you missed your employer’s open enrollment period (obtaining HIPP coverage usually creates a “qualifying event” allowing you to sign up at any time)
A final benefit of HIPP programs is that most states exclude individuals with both private insurance and Medicaid from otherwise mandated managed care programs.
Who is Eligible?
Most states require children to meet three basic requirements to join the HIPP program:
- The child must receive Medicaid coverage
- The child must have or have access to a comprehensive private insurance plan
- The child must have extraordinary health care costs that far exceed the cost of the family premium
In general, any child who receives Medicaid, regardless of how the child became eligible for Medicaid, will be eligible for HIPP. Children who receive Medicaid based on their income, through a Medicaid waiver, through a state-based program, or through certain buy-in programs are all eligible. In some states, children who participate in Medicaid-expansion Children’s Health Insurance Programs (CHIP) may also be eligible.
In order to be eligible, you must have a comprehensive employer-based insurance plan. While states vary in their definitions of “comprehensive,” most states require that your plan cover all basic forms of health care (doctor visits, prescriptions, hospital inpatient care, outpatient care), and pay at least 60-80% of the costs of care. Typically you will need to submit your plan coverage booklet when you apply to a HIPP program.
Finally, the costs of your child’s medical care must be considered extraordinary. Any child who has multiple specialists and frequent hospital stays is likely to qualify. As long as the state anticipates saving money by shifting costs from Medicaid to private insurance, they will likely approve your family.
Families of all incomes are eligible to apply in most states, and children of all ages and diagnoses can apply.
How Do I Apply?
First, you need to make sure your state has a program. In most cases, you can simply Google your state and the term “HIPP” or “Health Insurance Premium Payment.” In some states, the term “Third Party Liability” may also help you to find the relevant program. Some states, such as Texas, have comprehensive websites available to help you through the process. Other states may have little or no information available. You may find contacting your child’s Medicaid caseworker helpful. Sometimes simply calling your state’s Medicaid program and asking to speak with the department that handles Third Party Liability can help you find a program.
States have different methods for applying. Almost all require proof of Medicaid coverage, the private insurance plan coverage booklet, and insurance explanation of benefits documents (EOBs) demonstrating high levels of medical costs.
How Much Will I Save?
Typically, states reimburse the entire cost of the premium you would pay for family coverage on your private health insurance plan. If your employer pays 50% of the total premium cost, the state will reimburse you for the remaining 50%. If your employer only pays for employee coverage, the state will cover the entire cost for family coverage.
Depending on how much your employer pays and the total cost of your health plan, you can expect to be reimbursed anywhere from a few hundred dollars to as much as $4000 a month.
Why Does this Program Work?
HIPP is one of those rare win-win programs. States save money by shifting the costs of care back to private insurers, who should be paying those costs anyway. Families save money by not having to pay private health insurance premiums, which can be extremely costly. In some cases, siblings of children with complex medical needs may also be able to obtain private health insurance coverage since HIPP programs typically pay the premium to cover the entire family.
If your child is eligible, make sure to apply. The extra money you receive each month will be very helpful to your family financially, and you will be helping your state to save money on health care.