HHS Hands Out Bonuses for States That Stepped Up Medicaid, SCHIP Enrollment for Kids

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More states were able to secure federal bonus awards this year for their efforts to encourage and increase enrollment of uninsured children in Medicaid and state child health insurance programs (SCHIP). 

Fifteen states received bonuses totaling $206 million from the Centers for Medicare and Medicaid Services (CMS), the division of the Department of Health and Human Services that oversees federal health insurance contributions. That is up from 10 states in 2009, which earned a combined $75 million in bonus awards. (See below for a list of 2010 winners).

The bonus scheme was part of the Children’s Health Insurance Program Reauthorization (CHIPRA), which President Barack Obama signed in early 2009. It has become part of a larger campaign by Health and Human Services Secretary Kathleen Sebelius to cover more of the 5 million children who are eligible for, but are not enrolled in, public insurance programs. (For more on that effort, click here to read Elaine Korry’s feature story for the January issue of Youth Today).

It does not target extra funding at the best-performing states, which generally have a high percentage of children enrolled and have less potential to increase enrollment. Instead, CMS offers potentially large incentives to states that have historically performed poorly on outreach and enrollment.

States are encouraged by CMS to reinvest the bonus money in insurance programs, but they can statutorily use the money however they choose.

The bonus payments are not easy to get. To qualify for a bonus, states must first adopt at least five of the eight strategies that CMS says are “known to encourage enrollment and retention of eligible children.” These recommended features are spelled out in a guidance letter that was sent to states last year, and include joint Medicaid/SCHIP applications and elimination of in-person interviews.

If a state can demonstrate that it is implementing five of the eight features, CMS measures the increase in child enrollment during the year. This is determined using a complicated formula that compares enrollment increases to a baseline projection, which essentially estimates what enrollment would have been had the state not adopted new strategies.

If the actual increase is more than the projection, a state qualifies for a bonus. If the increase is more than 10 percent higher, the potential bonus grows.

All of the states that received a bonus in 2009 received one again in 2010. States receiving bonuses for the first time this year are Colorado, Iowa, Maryland, Ohio and Wisconsin.

The bonus offer has yet to draw in some of the states with the highest number, or highest percent, of uninsured children. About 40 percent of Medicaid/SCHIP-eligible, uninsured children live in three states (Florida, Texas and California), according to research by the Urban Institute. Of the ten states where 60 percent of eligible, uninsured children live, only Illinois and Ohio received bonuses.

There are 24 states where 10 percent or more of children are uninsured, according to 2009 data from the Kaiser Family Foundation. Despite the fact that it would be mathematically easier for them to make the necessary gains, only seven of those 24 states received a bonus.

Among the winners, seven of the 15 states received more than $10 million, but Alabama stood head and shoulders above the pack for second year in a row. Alabama increased its child enrollment in the two programs by 34.5 percent this year, earning itself a $55 million bonus. Last year the state received $39.1 million for increasing enrollment by 28 percent.

Only 7 percent of Alabama children were uninsured in 2009, according to Kaiser, the fifth lowest percentage of uninsured children in the nation.

States receiving bonuses this year:

Alabama           $55 million 

Alaska              $4.4 million 

Colorado          $13.7 million   

*Illinois             $15 million 

Iowa                $6.8 million 

Kansas             $2.6 million 

Louisiana          $3.6 million 

Maryland          $10.5 million 

Michigan          $9.3 million 

New Jersey      $8.8 million 

New Mexico    $8.5 million 

*Ohio               $12.4 million 

Oregon             $15.1 million 

Washington      $17.6 million 

Wisconsin         $23.1 million 

Winners from 2009:

Alabama        $39.1 million

Alaska            $789,000

Illinois            $9.1 million

Kansas            $1.5 million

Louisiana        $1.5 million

Michigan        $3.7 million

New Jersey     $4.2 million

New Mexico   $5.1 million

Oregon            $1.6 million

Washington    $7.5 million