The Health Insurance Premium Payment (HIPP) program is a Medicaid program that pays for the cost of health insurance premiums, coinsurance's, and deductibles.  The Division of Medical Services (DMS) pays for the cost of enrolling an eligible Medicaid recipient in a group health insurance plan when they determine it is cost effective to do so.  This is in accordance with Section 1906 of the Social Security Act.  Division of Family Service staff will determine who may apply for HIPP, initiate the HIPP application, and report changes affecting HIPP to DMS.  This memorandum provides policy for the HIPP Program and authorization to begin using the HIPP-1's initially distributed to county offices in August 1995.



Effective immediately, all Medicaid applicants, Medicaid recipients being reinvestigated, or Medicaid recipients reporting changes in employment MUST be evaluated for HIPP.  Applicants or recipients (excluding spenddown clients) must apply for HIPP if the following criteria are met:

  • The client or members of the household are employed or lost employment within the last thirty (30) days, and
  • The employer or former employer offers group health insurance coverage.

Individuals can choose to apply for the HIPP program if they or a member of their household are applying for Medicaid or are Medicaid-eligible and have health insurance available from sources other than employers (personal policies, credit unions, church affiliations, membership in organizations, etc.).  If DMS determines the health insurance plan is cost effective, Medicaid will pay the premium.

If a Medical Assistance spenddown client inquires about the HIPP program and indicates a diagnosis of HIV+/AIDS, complete the HIPP application and submit to DMS.  DMS has a separate formula for determining HIPP eligibility for these applicants.  All other MA spenddown clients are not eligible for HIPP.


Have the client complete the HIPP-1 using the instructions on the back of the form.  The caseworker should provide assistance completing the HIPP-1 if needed.  Mail the original HIPP-1 to the HIPP section of Division of Medical Services, P.O. Box 6500, Jefferson City, Missouri 65102-6500 as soon as it is completed. Give a copy to the client and file a copy in the case record.   Request the client provide a copy of the insurance policy booklet, summary plan description, employee handbook, enrollment materials, schedule of benefits or summary of coverage that describes the policy as eligibility for the HIPP program cannot be established without this information.  While not required, copies of premium notices and all applicable insurance cards expedite processing the application if available.  Upon receipt of this information forward it to the above address.

If a mandatory applicant fails to complete the HIPP-1, the caseworker should complete the application with the best information available.  The unsigned HIPP application should be sent to the HIPP section of Division of Medical Services to alert them to the possibility of health insurance benefits. DMS staff are responsible for determining if further contact with the applicant in regard to eligibility for HIPP is necessary.

An initial supply of HIPP-1's was sent to county offices in August 1995.  An additional supply of these forms may be obtained by contacting the warehouse.  The HIPP-1 is being revised and the new supply will be carboned with original to be mailed to the HIPP Section, a copy for the client and a copy for the case file. The HIPP Section address and phone number will be included on the revised form.  Additionally, DMS is producing a HIPP Pamphlet that will be available in the future for distribution to HIPP applicants.

To determine the status of a HIPP application, access the HIPP application inquiry screen (MAHI). To access this screen, enter MHAI and the policyholder's social security number.  In the Code Field you will find the status of the HIPP application.  It will reflect pending, approved, or denied.  The third party resource screen (MTPR) will reflect HIPP in the Source Code Field if DMS has approved the applicant for HIPP.  Inquiries concerning HIPP applications should be referred to the HIPP Section, P.O. Box 6500, Jefferson City, MO 65102-6500, telephone number (573)751-2005. 

Failure to cooperate by a mandatory HIPP applicant could result in loss of eligibility for Medicaid for applicants, recipients, parents, guardians, or caretakers.  Failure to cooperate is defined as:  (1) refusal to complete the application; (2) failure to provide information necessary to determine availability and cost-effectiveness of group health insurance; (3) refusal to enroll in a group plan which is available and determined cost effective by Division of Medical Services; (4) or dropping a health insurance plan that was considered cost effective. Division of Medical Services is responsible for all non-cooperation determinations and will notify DFS if non-cooperation has occurred.  If the county office receives a notice of non-cooperation from Division of Medical Services, contact IM Program and Policy in State Office for further instruction.

Medicaid benefits of a child may not be denied or terminated due to the failure of the parent, guardian, or caretaker to cooperate. Additionally, the Medicaid benefits of the spouse of the employed person may not be denied or terminated due to the employed person's failure to cooperate when the spouse cannot enroll in the plan independently of the employed person. 


HIPP clients are required to report any changes in their health insurance coverage within ten days of the change.  Changes that should be reported include:

  • a change in the amount of the premium,
  • a change in the amount of the deductible,
  • a change in the benefits or services covered by the policy,
  • a change in the number of persons covered, or if the insurance is discontinued.
These changes may be reported to the HIPP Section or the local DFS offices.  If these changes are reported to the county office, use the IM-16 (Communication Transmittal) to notify the HIPP Section of changes.  It will be necessary to write in HIPP in the unmarked area of the "TO" section.   Use the "INFORMATION" area to explain the reported change.  Mail the IM-16 to the Division of Medical Services, HIPP Section, P.O. Box 6500, Jefferson City, Missouri 65102-6500.  Changes that may affect cost savings are immediately investigated by the HIPP Section to determine if the health insurance plan continues to be cost-effective.  Staff should continue to use the TPL-1 to report new insurance coverage and discontinuance of insurance coverage.


DMS will contact employers and past employers upon receipt of the HIPP-1 form if inadequate information has been received to determine if the insurance available is cost effective.  When DMS receives an application (HIPP-1) the following steps are taken:

  • Establish whether the assistance group has been approved for Medicaid;
  • Run cost-savings determination;
  • If cost effective, approve, send notice to policyholder and copy to DFS caseworker;
  • Make payments of premium, coinsurance's and deductibles;
  • Complete a cost-savings redetermination at reported changes or on a semi-annual basis on active HIPP cases;
  • If not cost effective, deny the HIPP application and notify client and DFS staff.
If denied, the client may have their eligibility evaluated further by completing the medical history questionnaire sent to the policyholder with the denial notice.  The completed questionnaire is to be resubmitted to DMS.  By researching Medicaid claims history, the cost-savings are then reviewed on an individual basis.  If the case is still not considered cost-effective, a claim history for the past twelve (12) months is requested from the insurance company and cost-savings again reviewed.  If cost-savings cannot be justified, the case is denied with no further action.


Notice of appeal and hearing rights are provided for by the Division of Medical Services.   If an applicant for HIPP contacts the county office to request a hearing concerning their HIPP  eligibility, refer them to the HIPP Section at 573-751-2005 or take the information and contact the HIPP Section to advise of the request for a hearing.


The effective date of premium payment for the HIPP program is determined as follows:  premium payments for cost effective health insurance plans shall begin with the month the HIPP program application is received by the HIPP Section, or the effective date of eligibility, whichever is later.  If the person is not currently enrolled in the cost-effective health insurance plan, premium payments shall begin in the month in which the first premium payment is due after enrollment occurs.

Whenever possible the HIPP Program will pay the premiums directly to the insurance company.  If the premium is deducted from the policyholder's pay check, HIPP will pay the employer.  If the employer does not agree, the HIPP Program will reimburse the policyholder directly for the payroll deductions made for health insurance.  DMS will coordinate with the client for any reimbursement of HIPP premiums, copays, and /or deductibles.  Any inquiries concerning these issues should be referred to the HIPP Section at (573)751-2005.

Premiums will not be paid for health insurance plans under any of the following circumstances:

  • The insurance plan is designed to provide coverage only for a temporary period of time (for example, thirty to one hundred days);
  • The insurance plan is a school plan offered on the basis of attendance or enrollment at the school;
  • The premium is used to meet spenddown obligations(except HIV/AIDS individuals), when all persons in the household are eligible or potentially eligible only under the spenddown program.  When some of the household members are eligible for full Medicaid benefits, the premium shall be paid if it is determined to be cost-effective when considering only the persons receiving full Medicaid coverage. In these cases, the premium shall not be allowed as a deduction to meet the spenddown obligation for those persons in the household participating in the spenddown program;
  • The insurance plan is an indemnity policy which supplements the policyholder's income or pays only a predetermined amount for services covered under the policy; or
  • When more than one health insurance plan or policy is available, DMS shall pay only for the most cost-effective plan. However, in situations where DMS is buying-in to the cost of Medicare Part A or Part B for eligible Medicare beneficiaries, the cost of premiums for a Medicare supplemental insurance policy may also be paid if DMS determines it is likely to be cost-effective to do so.  This does not apply to QMB or SLMB recipients as they are not Medicaid eligible. 
When it is determined to be cost-effective, DMS shall pay for health insurance premiums for non-Medicaid eligible family members if a non-Medicaid eligible family member must be enrolled in the health plan in order to obtain coverage for the Medicaid eligible family members.  However, the needs of the non-Medicaid eligible family members are not taken into consideration when determining the cost-effectiveness.  Payments for deductibles, coinsurance's, or other cost-sharing obligations are not made on behalf of family members who are not Medicaid eligible.

Payment of HIPP premiums will be discontinued when all Medicaid eligible members covered under the health plan lose Medicaid eligibility.  The last HIPP payment will be for the last month of Medicaid eligibility.  When only some of the Medicaid eligible members covered under the health insurance plan lose Medicaid eligibility, a review will be completed to ascertain whether payment of the health insurance premium continues to be cost effective. 

  • Review this memorandum with all appropriate staff.
  • Begin using the HIPP-1 form when appropriate and forward to Division of Medical Services, HIPP Section, P.O. Box 6500, Jefferson City, MO  65102-6500.
  • Forward reported changes in health insurance coverage via IM-16 to the HIPP Section.
  • File HIPP-1 in Forms Manual
Distribution #2

[ 1997 Memorandums ]