SCHIP Passes its Physical

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Just in time to celebrate the 10-year anniversary of the State Children’s Health Insurance Program (SCHIP) – and to weigh in on the program’s debated funding reauthorization – Mathematica Policy Research and the federal Centers for Medicare & Medicaid Services (CMS) have released the most comprehensive evaluation of the program. The report, National Evaluation of the State Children’s Health Insurance Program: A Decade of Expanding Coverage and Improving Access “underscores what a clearly defined federal program can achieve,” CMS Acting Administrator Kerry Weems said in a prepared statement. “We want to see those successes continue.”

Weems: SCHIP’s evaluation “underscores what a clearly defined federal program can achieve.”

Photo: U.S. Department of Health and Human Services.

Just who is being covered is one of the main sticking points in the debate. In August, the Bush administration passed guidelines requiring states to insure 95 percent of eligible children in low-income families that earn 200 percent or less of the Federal Poverty Level (FPL) before extending coverage to families with higher earnings. (See “Stunting SCHIP’s Growth,” October.)

It’s clear that the administration is unhappy with the number of families that substitute free or low-cost SCHIP coverage for the private insurance available to them at a cost through their employers.

This evaluation addresses these issues and more, finding that from 1997 to 2003, the number and rate of uninsured, low-income children (under 200 percent of FPL) declined by a greater margin than did the uninsured number and rate for all children under age 19. It found that most states have already implemented strategies to discourage families from voluntarily dropping private coverage.

Big Job, Big Toolbox

When Congress enacted SCHIP in 1997, it mandated the evaluation of the resulting programs on several levels. States were required to submit an initial state evaluation to CMS in 2000, and annual reports thereafter, on their progress. Congress also contracted with Mathematica to conduct the national evaluation of the program.

The national evaluation covers 1997 through 2003, and utilizes a wide variety of data sources to measure a series of multifaceted outcomes, including SCHIP enrollment, “disenrollment” and re-enrollment patterns; the number and rate of uninsured children; retention, substitution and access to care in SCHIP; program implementation; and outreach.

It includes a focus on the required reporting of four “new” core performance measures introduced by CMS in 2003 (well-child visits at age 15 months, well-child visits from ages 3 to 6, use of appropriate medications for asthma, and visits to primary care providers) and an original examination of “enrollment outbreaks” at the state and local levels using a public health model normally used to track disease outbreaks.

Reaching the Neediest Kids

The evaluation documents nearly a decade of work by the states to boost SCHIP enrollment within the neediest eligible population: low-income children who remain chronically uninsured.

By fiscal 2006, SCHIP enrollment had reached 6.6 million children.

Mathematica researchers found that from 1997 to 2003, the number of children under age 19 who were uninsured decreased from 11.7 million to 9.9 million, or from 15.5 percent of the total youth population to 12.8 percent. At the same time, the uninsured rate among children in households earning below 200 percent of the federal poverty level fell even more: from 25.2 percent to 20.1 percent.

Another positive development: While children living between 100 and 150 percent of the FPL had the highest uninsured rate in 1997, their rate by 2003 was comparable with other income groups.

These decreases occurred at a time when the number of states with eligibility thresholds at or above 200 percent of the FPL rose: from 25 in September 1999, to 36 by September 2001, to 39 by July 2005.

The evaluation raises the possibility that, through targeted outreach, it is possible to increase the insured rate among low-income children while eligibility thresholds continue to rise.

Mathematica found that after an initial outreach focused on creating a broad awareness of SCHIP, states gradually began to target only the neediest children who were eligible but not enrolled. Most states eventually discovered the power of local in-person outreach, and focused on building partnerships with specific community-based organizations that had access to “hard-to-reach” populations.

Using a public health surveillance model for disease outbreaks, researchers quantitatively identified “enrollment outbreaks” at state and local levels in Kentucky, Ohio and Georgia, then explored the potential causes using qualitative methods, such as interviews.

At the state level, enrollment simplifications (such as online applications) and statewide campaigns (such as annual back-to-school sign-ups) were associated with enrollment spikes. At the local level, enrollment outbreaks generally followed involvement by health care providers, county social service agencies, community-based organizations and faith-based groups.

The analysis also underscored the importance of grants to fund outreach efforts, including the Covering Kids and Families program administered by the Robert Wood Johnson Foundation and the Community Access to Child Health grants administered by the American Academy of Pediatrics.

For the first time ever, researchers used data on voluntary and involuntary “disenrollees” to estimate that most states have retention rates that exceed 75 percent, which is similar to retention rates for private insurance and Medicaid. Retention rates are defined as the percentage of children who stay enrolled in the program through annual renewals, among all children who remain eligible for SCHIP.

Disenrollment rates varied widely among the states, ranging from a low of 6 percent in Colorado to a high of 88 percent in Oregon.

In-depth studies of 22 states revealed that certain policies help to boost retention, including simplified renewal procedures (especially passive renewal), policies that allow children to continue SCHIP coverage despite fluctuations in household income, and grace periods for premium payments.

Preventing ‘Crowd Out’

The Bush administration says that continuing expansion of SCHIP eligibility to higher income levels will encourage middle-income families to forgo private insurance at government expense. That practice, referred to as “substitution” or “crowd out,” effectively increases federal spending on the uninsured without actually decreasing the number of uninsured children.

In an effort to reduce that phenomenon, new federal guidelines released in August require youth to be uninsured for a period of one year before becoming eligible for SCHIP coverage. States have employed other methods, including searching for other coverage during a family’s eligibility determination process, instituting premiums on enrollees and putting new limits on their benefits.

The evaluation confirms that crowd out does occur. Mathematica estimates the rate of crowd out ranges from less than 10 percent to 56 percent of any given SCHIP population. For the purpose of evaluating the reauthorization of SCHIP, Congress and the administration are using a recent substitution estimate by the Congressional Budget Office of 33 percent for both SCHIP and Medicaid – a low-end figure already deemed unacceptable.

Mathematica researchers theorize that some amount of substitution is unavoidable. The report says variations depend largely on how substitution is defined and measured, and on the state’s perspective regarding the circumstances under which substitution may be acceptable on an applicant-by-applicant basis (such as job loss, divorce, death of a parent or the unaffordability of private coverage). The company suggests that the more salient policy questions are “how much” and “what kind of” substitution is acceptable.

It appears that most states are already taking a hard line on crowd-out rates. The evaluators found that 33 states have implemented waiting periods of one to 12 months to go without health insurance. Of the 39 states with separate child health programs (S-SCHIP), all but nine had a waiting period. Notably, 10 of the 13 states with income thresholds above 200 percent of the FPL have waiting periods to discourage parents from voluntarily substituting public coverage for private insurance.

Contact: Mathematica Policy Research, (617) 491-7900,