- Email: [email protected]
Continuing the Success of Covering Kids Through SCHIP
Department
www.jpedhc.org
Legislation and Health Policy
Section Editor Karen G. Duderstadt, MS, RN, PNP University of California— San Francisco School of Nursing, Family Health Care San Francisco, California
Continuing the Success of Covering Kids Through SCHIP Amy J. Demske, BA
Amy J. Demske is Government Relations Director, Arent Fox, Washington, DC. Reprint requests: Amy J. Demske, Government Relations Director, Arent Fox, 1050 Connecticut Avenue, NW, Washington, DC 20036. J Pediatr Health Care. (2006). 20, 130132. 0891-5245/$32.00 Copyright © 2006 by the National Association of Pediatric Nurse Practitioners. doi:10.1016/j.pedhc.2005.12.014
130
Volume 20 • Number 2
The State Children’s Health Insurance Program (SCHIP) was created 8 years ago as part of the Balanced Budget Act of 1997 (P.L. 105-33) under Title XXI of the Social Security Act. SCHIP was hailed as a bipartisan effort to expand health care coverage to low-income children living in families whose incomes were too high to qualify for Medicaid, but who were largely unable to afford private health insurance. Congress provided almost $40 billion for the program, which is authorized through 2007. Within the parameters of federal regulations, states were given tremendous latitude to design SCHIP programs in a variety of ways. The three models included a Medicaid expansion covering children and their families at slightly higher incomes than standard state eligibility criteria, a state-designed model that could mirror private plan coverage, or a combination of the two. Over the years, states have tested the bounds of federal flexibility by expanding coverage beyond original legislative targets, as well as covering populations and designing benefit packages that might not have been initially envisioned by federal policymakers. Despite program flexibility, states choosing to
enroll SCHIP beneficiaries in Medicaid programs could not cut off enrollment even if their federal allotment was fully expended. In contrast, states that chose a private plan model were not obligated to cover children who tried to enroll after the allotment was expended. Unlike Medicaid, the largest public insurer of children, SCHIP was never designed as an entitlement. This difference was critical to assembling the necessary bipartisan support for the legislation; and as a block grant program, states could decide whether they would participate in SCHIP and at what level. For families who were considering enrolling, it was important that SCHIP appear less like Medicaid and welfare and more like a commercial product, to overcome some of the stigma normally associated with government assistance programs (NHPF, 2005). The federal government also incentivized states with higher federal matching rates with SCHIP than offered under Medicaid ranging from 65% to approximately 82% as of fiscal year 2005 (KFF, 2005). Increased federal dollars made SCHIP an attractive program to states, particularly those states with large numbers of uninsured children. Journal of Pediatric Health Care
States have taken a variety of approaches to enrolling eligible children. Originally, the Balanced Budget Act determined that states cover SCHIP populations up to 200% of the federal poverty level— and these limits were relaxed to allow states to expand income requirements (Dubay, Hill, & Kenney, 2002). Currently eight states have set SCHIP eligibility limits below 200% of the poverty level, including Alaska, Idaho, Montana, North Dakota, Nebraska, Oklahoma, Oregon, and South Carolina. In contrast, 30 states have set SCHIP eligibility levels at 200% of the poverty level, and 13 states have set SCHIP eligibility standards above this amount. New Jersey has the highest income eligibility at 350% of the federal poverty level (NASHP, 2005). Close behind are Connecticut, Missouri, New Hampshire, and Vermont, with eligibility levels at 300% (HHS, 2005). The SCHIP program was also unique in terms of outreach, ease of enrollment, and simplification of the enrollment process—including less paperwork and fewer asset requirements than Medicaid. Increased flexibility has also meant that pregnant women, parents, and caregivers have become eligible under agreements with the Centers for Medicare and Medicaid Services (CMS), to receive SCHIP coverage. Currently 6 states have received federal approval to provide coverage to pregnant women with incomes ranging from 185% to 275% of the poverty level. “Because the coverage is technically tied to the unborn child, this option also allows states to receive SCHIP matching funds for providing coverage to immigrant women whose children will be United States citizens” (Ryan, 2003). States have also been granted permission from CMS to provide coverage to the entire family. As a result, “children covered by Medicaid and SCHIP were about 1.5 times more likely than uninsured children to receive well-child care, office visits Journal of Pediatric Health Care
and dental care” (Kenney, Haley, & Tebay, 2003). There have been a number of challenges to SCHIP over the years. Each year, state budget woes put SCHIP programs at risk. However, unlike state Medicaid programs, which continue to consume the largest percentage of most state budgets, SCHIP programs have been largely supported. When SCHIP cutbacks have occurred, they have generally included easing future growth, rollbacks to outreach efforts, and in some cases reducing eligibility and benefits and increasing cost-sharing. Despite state budget challenges, since 1997, the percentage of uninsured has decreased from 13.9% to 9.4% (Cohen & Martinez, 2005). In fact, “in 2004, 69.4 percent of poor children and 43.8 percent of near poor children were covered by a public health plan. From 1999 through 2003, the estimates of public coverage increased among children, but the largest increase was seen among near poor children” (Cohen & Martinez, 2005). Press coverage has largely focused on positive stories indicating the decline in the number of children without health care insurance, despite increases in health care costs and decreases in employer-sponsored health care insurance (Broder, 2005). Increased enrollment and lower uninsured rates among children have certainly strengthened SCHIP reauthorization prospects. Eight years after implementation, 4.4 million children receive coverage under SCHIP nationally (CMS, 2005). Many more family members have been covered as well. States have 3 years to spend their federal SCHIP allocation. Unused funds are redistributed to states that overspend their allocation. These states have a year to spend redistributed funds before they revert back to the U.S. Treasury (Bergman, 2005). “At the end of FY 2004 nearly $1.3 billion in unspent reallocated SCHIP funds
expired. Recently the Administration reallocated roughly $643 million in unspent FY 2002 SCHIP funds among twenty eight states that had exhausted their own FY 2002 allotments, five of which had projected shortfalls in FY 2005” (Herz, Fernandez, & Peterson, 2005). States would likely be supportive of legislation ending the year time period in which they currently have to spend redistributed funds, especially since just over half the states received redistributed funds between FYs 1998 and 2002 (Herz, Fernandez, & Peterson, 2005). “In the early years of SCHIP, the majority of states had not used available SCHIP allotments within applicable time frames, and these unspent funds were on the verge of expiring. In response, Congress passed reallocation legislation that tried to strike a balance between rewarding fastspending states with additional funds, while giving slow-spending states continued access to a portion of their unused funds” (Herz, Fernandez, & Peterson, 2005). Congress will have less money to redistribute in each of the remaining years, as more states have been able to spend their full allotments. States that expend their entire allotment and realize there may not be additional funding for redistribution will need to make critical decisions about how best to allocate resources within their own programs. The National Academy for State Health Policy engaged a group of state SCHIP Directors to talk about some of their suggestions for the SCHIP reauthorization process. The group generally focused their recommendations on enrolling dependents of state employees into separate SCHIP programs; offering supplemental benefits to children who would be eligible for a separate SCHIP program if they did not already have health insurance; and allowing families to choose to enroll their children in a separate March/April 2006 131
SCHIP program even if they are eligible for Medicaid” (Bergman, 2005). Congressional reauthorization of SCHIP is scheduled to occur as we approach FY 2007. It is unclear how Medicaid reform will affect efforts for the second session of the 109th Congress to address continuing a program that is seen as a model by federal and state policymakers. Resources and pressures on the federal budget process will likely determine future funding for SCHIP.
REFERENCES Bergman, D. (2005, June). Perspectives on reauthorization: SCHIP directors weigh in. Washington, DC: National Academy of State Health Policy. Broder, J.M. (2005, December 4). Health coverage of young widens with states’ aid. New York Times.
Centers for Medicare and Medicaid Services. (2005, June 27). FY 2005 second quarter ever enrolled data by state–total SCHIP. [This data does not include data from Vermont, which did not report data via the Statistical Enrollment Data System (SEDS).] Cohen, R.A. & Martinez, M.E. (2005, June). Health insurance coverage, estimates from the National Health Interview Survey, 2004. Portland, ME: Division of Health Interview Statistics, National Center for Health Statistics. Department of Health and Human Services, Office of the Secretary. (2005, February 14). Annual update of the HHS poverty guidelines. Washington, DC: Department of Health and Human Services. Dubay, L., Hill, I., & Kenney, G. (2002, October). New federalism, issues and options for states. Washington, DC: Urban Institute. Henry J. Kaiser Family Foundation. (2005). Federal matching rate (FMAP) for SCHIP. Retrieved November 15, 2005, from the World Wide Web: http://www. statehealthfacts.org/cgi-bin/healthfacts. cgi ? action ⫽ compare & category ⫽
Medicaid⫹%26⫹SCHIP&subcategory⫽ SCHIP&topic⫽Federal⫹Matching⫹Rate. Herz, E. J., Fernandez, B., & Peterson, C.L. (2005). State Children’s Health Insurance Program (SCHIP): A brief overview. Washington, DC: Congressional Research Service. Updated March 23, 2005. Kenney, G., Haley, J. & Tebay, A. (2003, July). Children’s health insurance coverage and service use improve, snapshots of America’s families III, No. 1. Washington, DC: Urban Institute. National Academy for State Health Policy. (2005, July). Income eligibility levels and cost sharing for children in Medicaid and SCHIP and other populations covered with SCHIP funds. Washington, DC: National Academy for State Health Policy. National Health Policy Forum. (2005, November 5). The changing face of Medicaid: Contemplating New Approaches to Benefits and Cost Sharing. Forum Session. Ryan, Jennifer. (2003, November 13). Sailing SCHIP through troubled waters. National Health Policy Forum Issue Brief, Number 795.
WANTED: CHILDREN’S DRAWINGS The Journal is interested in publishing children’s drawings of their responses to illness, treatment, or encounters with the health care system or personnel. Please enclose the child’s assent/consent and parental consent to have the drawing published and commented on when you submit the drawing. Please send the drawing, along with the child’s age, gender, and pertinent information regarding the child’s condition, and the written consents, to: Bobbie Crew Nelms, PhD, RN, CPNP 3133 Barbara St San Pedro, CA 90731
132 Volume 20 • Number 2
Journal of Pediatric Health Care
www.jpedhc.org
Legislation and Health Policy
Section Editor Karen G. Duderstadt, MS, RN, PNP University of California— San Francisco School of Nursing, Family Health Care San Francisco, California
Continuing the Success of Covering Kids Through SCHIP Amy J. Demske, BA
Amy J. Demske is Government Relations Director, Arent Fox, Washington, DC. Reprint requests: Amy J. Demske, Government Relations Director, Arent Fox, 1050 Connecticut Avenue, NW, Washington, DC 20036. J Pediatr Health Care. (2006). 20, 130132. 0891-5245/$32.00 Copyright © 2006 by the National Association of Pediatric Nurse Practitioners. doi:10.1016/j.pedhc.2005.12.014
130
Volume 20 • Number 2
The State Children’s Health Insurance Program (SCHIP) was created 8 years ago as part of the Balanced Budget Act of 1997 (P.L. 105-33) under Title XXI of the Social Security Act. SCHIP was hailed as a bipartisan effort to expand health care coverage to low-income children living in families whose incomes were too high to qualify for Medicaid, but who were largely unable to afford private health insurance. Congress provided almost $40 billion for the program, which is authorized through 2007. Within the parameters of federal regulations, states were given tremendous latitude to design SCHIP programs in a variety of ways. The three models included a Medicaid expansion covering children and their families at slightly higher incomes than standard state eligibility criteria, a state-designed model that could mirror private plan coverage, or a combination of the two. Over the years, states have tested the bounds of federal flexibility by expanding coverage beyond original legislative targets, as well as covering populations and designing benefit packages that might not have been initially envisioned by federal policymakers. Despite program flexibility, states choosing to
enroll SCHIP beneficiaries in Medicaid programs could not cut off enrollment even if their federal allotment was fully expended. In contrast, states that chose a private plan model were not obligated to cover children who tried to enroll after the allotment was expended. Unlike Medicaid, the largest public insurer of children, SCHIP was never designed as an entitlement. This difference was critical to assembling the necessary bipartisan support for the legislation; and as a block grant program, states could decide whether they would participate in SCHIP and at what level. For families who were considering enrolling, it was important that SCHIP appear less like Medicaid and welfare and more like a commercial product, to overcome some of the stigma normally associated with government assistance programs (NHPF, 2005). The federal government also incentivized states with higher federal matching rates with SCHIP than offered under Medicaid ranging from 65% to approximately 82% as of fiscal year 2005 (KFF, 2005). Increased federal dollars made SCHIP an attractive program to states, particularly those states with large numbers of uninsured children. Journal of Pediatric Health Care
States have taken a variety of approaches to enrolling eligible children. Originally, the Balanced Budget Act determined that states cover SCHIP populations up to 200% of the federal poverty level— and these limits were relaxed to allow states to expand income requirements (Dubay, Hill, & Kenney, 2002). Currently eight states have set SCHIP eligibility limits below 200% of the poverty level, including Alaska, Idaho, Montana, North Dakota, Nebraska, Oklahoma, Oregon, and South Carolina. In contrast, 30 states have set SCHIP eligibility levels at 200% of the poverty level, and 13 states have set SCHIP eligibility standards above this amount. New Jersey has the highest income eligibility at 350% of the federal poverty level (NASHP, 2005). Close behind are Connecticut, Missouri, New Hampshire, and Vermont, with eligibility levels at 300% (HHS, 2005). The SCHIP program was also unique in terms of outreach, ease of enrollment, and simplification of the enrollment process—including less paperwork and fewer asset requirements than Medicaid. Increased flexibility has also meant that pregnant women, parents, and caregivers have become eligible under agreements with the Centers for Medicare and Medicaid Services (CMS), to receive SCHIP coverage. Currently 6 states have received federal approval to provide coverage to pregnant women with incomes ranging from 185% to 275% of the poverty level. “Because the coverage is technically tied to the unborn child, this option also allows states to receive SCHIP matching funds for providing coverage to immigrant women whose children will be United States citizens” (Ryan, 2003). States have also been granted permission from CMS to provide coverage to the entire family. As a result, “children covered by Medicaid and SCHIP were about 1.5 times more likely than uninsured children to receive well-child care, office visits Journal of Pediatric Health Care
and dental care” (Kenney, Haley, & Tebay, 2003). There have been a number of challenges to SCHIP over the years. Each year, state budget woes put SCHIP programs at risk. However, unlike state Medicaid programs, which continue to consume the largest percentage of most state budgets, SCHIP programs have been largely supported. When SCHIP cutbacks have occurred, they have generally included easing future growth, rollbacks to outreach efforts, and in some cases reducing eligibility and benefits and increasing cost-sharing. Despite state budget challenges, since 1997, the percentage of uninsured has decreased from 13.9% to 9.4% (Cohen & Martinez, 2005). In fact, “in 2004, 69.4 percent of poor children and 43.8 percent of near poor children were covered by a public health plan. From 1999 through 2003, the estimates of public coverage increased among children, but the largest increase was seen among near poor children” (Cohen & Martinez, 2005). Press coverage has largely focused on positive stories indicating the decline in the number of children without health care insurance, despite increases in health care costs and decreases in employer-sponsored health care insurance (Broder, 2005). Increased enrollment and lower uninsured rates among children have certainly strengthened SCHIP reauthorization prospects. Eight years after implementation, 4.4 million children receive coverage under SCHIP nationally (CMS, 2005). Many more family members have been covered as well. States have 3 years to spend their federal SCHIP allocation. Unused funds are redistributed to states that overspend their allocation. These states have a year to spend redistributed funds before they revert back to the U.S. Treasury (Bergman, 2005). “At the end of FY 2004 nearly $1.3 billion in unspent reallocated SCHIP funds
expired. Recently the Administration reallocated roughly $643 million in unspent FY 2002 SCHIP funds among twenty eight states that had exhausted their own FY 2002 allotments, five of which had projected shortfalls in FY 2005” (Herz, Fernandez, & Peterson, 2005). States would likely be supportive of legislation ending the year time period in which they currently have to spend redistributed funds, especially since just over half the states received redistributed funds between FYs 1998 and 2002 (Herz, Fernandez, & Peterson, 2005). “In the early years of SCHIP, the majority of states had not used available SCHIP allotments within applicable time frames, and these unspent funds were on the verge of expiring. In response, Congress passed reallocation legislation that tried to strike a balance between rewarding fastspending states with additional funds, while giving slow-spending states continued access to a portion of their unused funds” (Herz, Fernandez, & Peterson, 2005). Congress will have less money to redistribute in each of the remaining years, as more states have been able to spend their full allotments. States that expend their entire allotment and realize there may not be additional funding for redistribution will need to make critical decisions about how best to allocate resources within their own programs. The National Academy for State Health Policy engaged a group of state SCHIP Directors to talk about some of their suggestions for the SCHIP reauthorization process. The group generally focused their recommendations on enrolling dependents of state employees into separate SCHIP programs; offering supplemental benefits to children who would be eligible for a separate SCHIP program if they did not already have health insurance; and allowing families to choose to enroll their children in a separate March/April 2006 131
SCHIP program even if they are eligible for Medicaid” (Bergman, 2005). Congressional reauthorization of SCHIP is scheduled to occur as we approach FY 2007. It is unclear how Medicaid reform will affect efforts for the second session of the 109th Congress to address continuing a program that is seen as a model by federal and state policymakers. Resources and pressures on the federal budget process will likely determine future funding for SCHIP.
REFERENCES Bergman, D. (2005, June). Perspectives on reauthorization: SCHIP directors weigh in. Washington, DC: National Academy of State Health Policy. Broder, J.M. (2005, December 4). Health coverage of young widens with states’ aid. New York Times.
Centers for Medicare and Medicaid Services. (2005, June 27). FY 2005 second quarter ever enrolled data by state–total SCHIP. [This data does not include data from Vermont, which did not report data via the Statistical Enrollment Data System (SEDS).] Cohen, R.A. & Martinez, M.E. (2005, June). Health insurance coverage, estimates from the National Health Interview Survey, 2004. Portland, ME: Division of Health Interview Statistics, National Center for Health Statistics. Department of Health and Human Services, Office of the Secretary. (2005, February 14). Annual update of the HHS poverty guidelines. Washington, DC: Department of Health and Human Services. Dubay, L., Hill, I., & Kenney, G. (2002, October). New federalism, issues and options for states. Washington, DC: Urban Institute. Henry J. Kaiser Family Foundation. (2005). Federal matching rate (FMAP) for SCHIP. Retrieved November 15, 2005, from the World Wide Web: http://www. statehealthfacts.org/cgi-bin/healthfacts. cgi ? action ⫽ compare & category ⫽
Medicaid⫹%26⫹SCHIP&subcategory⫽ SCHIP&topic⫽Federal⫹Matching⫹Rate. Herz, E. J., Fernandez, B., & Peterson, C.L. (2005). State Children’s Health Insurance Program (SCHIP): A brief overview. Washington, DC: Congressional Research Service. Updated March 23, 2005. Kenney, G., Haley, J. & Tebay, A. (2003, July). Children’s health insurance coverage and service use improve, snapshots of America’s families III, No. 1. Washington, DC: Urban Institute. National Academy for State Health Policy. (2005, July). Income eligibility levels and cost sharing for children in Medicaid and SCHIP and other populations covered with SCHIP funds. Washington, DC: National Academy for State Health Policy. National Health Policy Forum. (2005, November 5). The changing face of Medicaid: Contemplating New Approaches to Benefits and Cost Sharing. Forum Session. Ryan, Jennifer. (2003, November 13). Sailing SCHIP through troubled waters. National Health Policy Forum Issue Brief, Number 795.
WANTED: CHILDREN’S DRAWINGS The Journal is interested in publishing children’s drawings of their responses to illness, treatment, or encounters with the health care system or personnel. Please enclose the child’s assent/consent and parental consent to have the drawing published and commented on when you submit the drawing. Please send the drawing, along with the child’s age, gender, and pertinent information regarding the child’s condition, and the written consents, to: Bobbie Crew Nelms, PhD, RN, CPNP 3133 Barbara St San Pedro, CA 90731
132 Volume 20 • Number 2
Journal of Pediatric Health Care