In 1997, Congress passed legislation creating the State Childrens Health Insurance Program (SCHIP), the first major federally funded health program to be established since Medicare and Medicaid were enacted in 1965. SCHIP, authorized by a new Title XXI in the Social Security Act, was designed to extend health insurance to approximately 40 percent of the then-estimated 10 million uninsured children. The SCHIP legislation offered states the option to expand Medicaid, create a separate program, or undertake a combination of both. The separate program option provides states with broad flexibility to adopt many design features of private health insurance, such as premiums, cost-sharing, and mainstream benefit packages.
In the Balanced Budget Refinement Act of 1999, Congress mandated that the Department of Health and Human Services (DHHS) conduct an evaluation of ten states SCHIP programs, and further directed that a wide range of issues be addressed, including, among others, SCHIP enrollment and disenrollment dynamics, the impact of SCHIP and Medicaid enrollment practices on enrollment of children, and coordination between SCHIP and Medicaid. The mandate also required surveys of the target populationenrollees, disenrollees, and children who are eligible for but not enrolled in SCHIP. The evaluation began in January 2000, under the guidance of the DHHS Office of the Assistant Secretary for Planning and Evaluation (ASPE). This Report to Congress is the first from the evaluation and is based on information collected during 2001. Final results from the surveys and additional findings from the evaluation will be available in the final Report to Congress in 2004.
This report draws primarily on findings from case studies in six of the ten states selected for the evaluation, whose early experiences implementing SCHIP have been examined closely: California, Colorado, Louisiana, Missouri, New York, and Texas (Hill et al. 2002). Case study respondents interviewed in the case studies included state officials, advocates, plan staff, and providers. Also, to assess the program from the perspective of the low-income families whose children SCHIP targets, the report draws heavily on findings from focus groups conducted with parents of low-income children who (1) are enrolled in SCHIP and/or Medicaid, (2) are disenrolled from SCHIP and/or Medicaid, (3) would be eligible for SCHIP except that they are privately insured, and (4) who are eligible for public coverage but not enrolled (Bellamy et al. 2002). The findings from these qualitative studies are supplemented by analyses of awareness of and perceptions about SCHIP and Medicaid among low-income uninsured families nationwide, based on preliminary data collected using the State and Local Area Integrated Telephone Survey (SLAITS) (Kenney et al. 2002). The report also includes an analysis of retention and enrollment turnover using SCHIP administrative data from three states. Finally, the report draws on an ASPE-sponsored study of three states (New Jersey, Rhode Island, and Wisconsin) that have introduced coverage for parents under Title XXI (Kaye, Wysen, and Pernice 2001).
The nearly five years since the creation of the State Childrens Health Insurance Program (SCHIP) have witnessed substantial growth in publicly funded health systems for children. All states implemented Title XXI initiatives over this period (one-third solely through expansions of Medicaid, and two-thirds by creating separate programs, either alone or in combination with Medicaid expansions). These programs have increased the national average income eligibility threshold for subsidized coverage of children nearly twofold, to 214 percent of the federal poverty level (FPL). In fiscal year (FY) 2002, 5.3 million children were insured by SCHIP at some time during the year (CMS 2003).
The trends in the six states discussed in this report mirror the overall national trends closely. Except for Texas, the states studied had implemented the major portion of their SCHIP expansions within roughly one year of passage of the SCHIP law. Four states chose to create separate programs, while two expanded coverage of children through Medicaid. The average income eligibility threshold for children now stands at 231 percent of FPL in the six study statesslightly above the national average. Because the six study states include the three largest SCHIP programs in the nation, enrollment in these states makes up a large share of national total enrollment; indeed, in FY 2002, over 2.6 million children were covered by SCHIP in the six study states. (CMS 2002).
Based on the analyses conducted for this first Report to Congress, the following sections highlight SCHIPs successes as well as the challenges that face the program. The data available for this interim report suggest that states have learned much about how to design and operate a successful childrens health insurance program, that they acted quickly to implement their programs and have accomplished much since the program began. At the same time, the analyses reveal disparities and problems that remain to be addressed if the program is going to more fully realize its potential to cover and improve the care and health of uninsured children. The final Report to Congress will provide additional, more rigorous analyses of the issues covered in this report; it is also expected to shed light on emerging new questions concerning SCHIP and Medicaid and low-income children.
High Enrollee Satisfaction. State officials and advocates responding to case study interviews report that families are satisfied with SCHIP. Focus group participants with children enrolled in SCHIP and Medicaid bear out these reports. Families like the low price, the range of benefits, and the access to providers that the programs offer. While these findings must be considered preliminary, the survey of parents in ten states, whose findings will be reported in the final Report to Congress, will provide richer and more detailed information about enrollee satisfaction.
Millions of Low-Income Children Enrolled. The flexibility afforded by Title XXI allowed states to adopt the program designs that best met their needs. Some states elected Medicaid expansions both as a means of extending Medicaids broad coverage to more children and because it was administratively efficient. Others chose separate programs in order to use features of private insurance, and sometimes to avoid saddling the new program with longstanding negative associations that many had with Medicaid. Regardless of their program choice, however, most states enjoyed strong support for implementing a SCHIP program.
States began implementing their SCHIP programs soon after the law was passed, and enrollment has grown continuously ever since. By the end of 1998, about 1 million children had been enrolled (CMS, 2002). Enrollment grew steadily so that by FY 2002, 5.3 million children were covered under the program at some time during the yeara 15 percent increase over the numbers enrolled in FY 2001. The growth from year to year was fueled both by increases in the number of states operating a program (all but two states had programs up and running by the second anniversary of SCHIPs enactment) and by aggressive outreach to and simpler enrollment processes for families with eligible children. While quantitative evidence is scant, state officials who were interviewed in the study states indicate that Medicaid enrollment has increased as a result of SCHIP outreach.
Streamlined Program Entry. Nearly all states developed simple application and enrollment processes for their separate SCHIP programs. Aspects of typical SCHIP application processes include short, joint applications for SCHIP and Medicaid, mail-in application options, and telephone-based or local hands-on application assistance. Few use an asset test (a common feature of Medicaid applications in the past for families and children on welfare), and many have 12-month continuous eligibility periods and require only minimal documentation to prove eligibility. State officials believe that these features have been crucial to their successful enrollment of children in SCHIP.
Some of the design features of SCHIP have spilled over to Medicaid. For example, due to reforms in California and Texas, children can now apply for Medicaid, too, by mail, and documentation requirements have been reduced. To the extent that such reforms make Medicaid and SCHIP more alike, coordination and family transitions between the two programs become smoother. The cumulative effect of the streamlining has been a reinvention of public health insurancea replacement of the old welfare-style program with a more accessible, consumer- driven program.
Strategic Outreach. Based on their experience, states have continued to adopt new outreach strategies for SCHIP that they expect to be more effective. While the early emphasis in outreach was on statewide mass media campaigns to establish an identity for the new programs, community-based efforts have since played an increasingly important role. Community-based outreach, often conducted by local organizations and trusted community groups, is often used to target hard-to-reach families and subpopulations.
Broad and Affordable Benefits. Medicaid benefits are usually more comprehensive than benefits covered under separate state SCHIP programs. But SCHIP programs, too, offer
broad benefits that were consistently described as much broader than benefits offered in private health insurance. Case study respondents and focus group participants said SCHIP benefits met the needs of the vast majority of children.
Many states require modest cost-sharing, including premiums, enrollment fees, and co- payments in their separate SCHIP programs. According to case study respondents interviewed for this study, as well as most focus group participants, families consider the cost-sharing reasonable and not overly burdensome, financially. Also, many of those interviewed support the cost-sharing requirements in SCHIP because they believe that they encourage pride of ownership and appropriate use of services. An additional reason that states have included cost- sharing is to discourage families with private insurance coverage from disenrolling from that coverage and substituting public coverage. However, the impacts of premiums on SCHIP participation will be rigorously assessed later in this study.
Apparent Good Access to Care. Overall, access to care under SCHIP was described by case study respondents as good, especially in urban areas. In large part, this was attributed to states widespread use of managed care arrangements, which have reportedly helped increase both the supply of participating providers and the number of children with a medical home. Where Medicaid programs use service delivery arrangements similar to those used by SCHIPmost often in urban areasaccess to care for Medicaid enrollees was also described as good.
Positive Attitudes toward SCHIP and Medicaid. The steady growth in SCHIP enrollment confirms that the programs are successful in providing coverage to low-income children. Families want and will enroll their children in affordable health insurance. Analyses of low- income families knowledge of and attitudes toward SCHIP and Medicaid showed that fully 82 percent of low-income uninsured children whose parents had heard of either Medicaid or SCHIP, or both, say they would enroll their children if told they were eligible. In addition, 88 percent of parents of low-income, uninsured children who have been enrolled in Medicaid in the past have positive views about enrolling their children again (Kenney et al. 2002).
Although awareness of SCHIP among low-income families still lags behind awareness of Medicaid (55 percent versus 87 percent in early 2001)as might be expected given that SCHIP is relatively newawareness of the program appears to be increasing over time among low- income families with uninsured children. Widespread interest in enrolling their children among parents who had heard of Medicaid and SCHIP, suggests that improving awareness of the programs and understanding of eligibility rules could lead to further increases in enrollment.
Ongoing Support. Support for SCHIP has been strong and steady since the programs inception. The enhanced federal match for SCHIP made it popular with the states, and states have been using their tobacco settlement dollars and general appropriations to fund their portion of the program. Despite the softening economy, most state officials we interviewed pointed to broad-based support for the program and predicted a positive future.
Gaps in Outreach and Awareness. States beginning to implement their SCHIP programs faced the challenge of reaching out to a large and diverse population of low-income families with uninsured children, who may never have been enrolled in a public assistance program. Outreach has not been uniformly effective across states or across subpopulations, and more work is needed to increase program awareness and understanding of SCHIP and Medicaid program rules among families, regardless of race, ethnicity, or age of children.
Among low-income families with uninsured children, those least aware of SCHIP are Hispanic families interviewed in Spanish and the very poorest families (that is, those below 50 percent of the poverty level). Many low-income parents with uninsured children, though they are aware of Medicaid and SCHIP, do not believe that their children are eligible. Confusion about who is eligible is most common among parents of Hispanic children interviewed in Spanish, parents of white children, parents of older children, and parents of children in families with higher incomes.
Application Process Widely Perceived as Difficult. Fewer than half of all low-income uninsured children whose parents had, in 2001, heard of at least one of the two programs have parents who view the Medicaid and SCHIP application processes as easy. Negative perceptions are more widespread for the Medicaid program than for SCHIP (32 versus 22 percent). This result is not surprising given that the application process for Medicaid is not typically as easy as it is for SCHIP. (Focus group participants also reported negative experiences in the past with Medicaid applications.) Less-educated parents and those interviewed in Spanish more often reported difficulties with the application process. Thus, making the application process for the programs easier and more accessible to parents from diverse ethnic backgrounds and educational levels remains as a program challenge.
More Coordination Needed. SCHIP and Medicaid together offer the potential for seamless coverage so that children whose familys income changes can move between the programs without disruption, and families with children in both programs need not navigate two distinct systems. However, coordination has not yet been perfected in states that operate separate SCHIP programs. While separate programs appear to enjoy high levels of support, case study respondents in states with such programs reported that coordinating SCHIP and Medicaid poses significant challenges. These challenges stem from differences between the two programs eligibility rules, administrative structures, and delivery systems. Even minor discrepancies in eligibility policy between the two programs can complicate the screen-and-enroll procedures, required by law to place children into the program for which they are eligible. Likewise, focus group participants found differences between the programs to be confusing.
Understanding Why Children Leave the Program. As state programs mature, an emerging challenge is tracking the retention and disenrollment of eligible children and understanding the reasons for disenrollment of eligible children. No one yet knows what reasonable rates of retention or disenrollment are, and the availability and quality of data on the reasons for disenrollment are limited. Although disenrollment might appropriately result from changes in employment, income, access to employer-sponsored insurance, or other factors, there is a concern among state officials interviewed in the case studies that administrative barriers (for example, redetermination procedures) and confusion among parents of enrolled children are significant causes of disenrollment. This concern is replicated in the statements of some focus group participants who reported that they had not intended to disenroll their children, but did not realize what the renewal process entailed.
Lingering Resistance to Medicaid. Despite the positive views about Medicaid among many families whose children have been enrolled in the program, Medicaid is not always viewed so positively. Providers have often been reluctant to accept Medicaid patients, mostly because of low Medicaid payment rates in the past. Some families are reluctant to enroll in Medicaid; their reasons include past difficulties applying, the stigma arising from Medicaids longstanding linkage to the welfare program, and the concern among immigrant families that receipt of Medicaid could jeopardize their immigration status or their efforts to obtain citizenship. These perceptions were reportedly one of the factors that led some states to choose separate SCHIP programs rather than Medicaid expansions.
Gaps in Access. Despite the broad benefits offered by Medicaid and SCHIP, early success enrolling health plans and providers into SCHIP networks, and reported good access to primary and preventive care, focus group participants and case study respondents indicate that families still have difficulty obtaining some covered benefits, particularly dental and certain specialists services.
Access in rural areas is reported to be more limited than in urban areas. Some states have responded to the limited number of providers in rural areas and provider rejection of capitated managed care by introducing exclusive provider organizations, which recruit and extend to families an identified network of primary care physicians for their children.
Maintaining Provider Payment Levels. Most states employ capitated managed care for the majority of their SCHIP enrollees. Lacking an alternative basis for setting capitation rates, state officials have typically paid health plans participating in SCHIP the same (or nearly the same) rates they pay under Medicaid. Likewise, health plans have most often elected to pay their providers according to the fee schedules they use in Medicaid. In states where providers view these rates as unfairly low, case study respondents were concerned about reduced provider participation and potential reductions in access to care.
The challenges identified earlier are likely to remain central for the foreseeable future. But new issues are also emerging: case study respondents in the six states under study indicated that family coverage under SCHIP is a topic of growing interest. While some states have already obtained approval for such programs, an increase in the number of states proposing both these arrangements and other, new approaches is likely in light of the flexibility recently offered under CMS Health Insurance Flexibility and Accountability (HIFA) initiative. The impact of these programs on the number of low-income, uninsured individuals and also on the profile of the Medicaid and SCHIP programs, will along with operational issues, be of great interest.
The evidence to date suggests that SCHIP is a successful program. It is popular among legislators, families, advocates, and providers alike. As long as state funds remain available, the future of the program appears secure.
Knowledge of the program among eligible low-income families is widespread and growing, due in part to aggressive mass-media and community-based outreach (though some families have been more difficult to reach than others). Enrolling in SCHIP is easier than enrolling in Medicaid, as a result of the more straightforward eligibility rules and application methods adopted by states; but Medicaid enrollment is getting easier too, as SCHIP approaches spill over into this program.
Families access to primary care, once they are enrolled, is judged by case study respondents, including state officials, advocates, plans and providers, to be good, though they raised concerns about the adequacy of access to dental care and specialists services.
While the analyses completed for this first report on the Congressionally mandated evaluation of SCHIP have yielded substantial information, major aspects of the study that are still in progress are expected to enrich the evaluation of the program greatly. The surveys of the target population, the entire body of ten state case studies, and the survey of all SCHIP administrators will provide data critical to understanding enrollment and disenrollment behavior and its determinants, the relationships among utilization, enrollee characteristics and program design, and the context in which programs were conceived and operate. These study components will also illuminate SCHIP enrollees access to care, their satisfaction, and whether they substitute SCHIP for private coverage. The final Report to Congress on the SCHIP evaluation, to be submitted in 2004, will present the findings on this broad spectrum of policy issues.
Bellamy, Hilary, Renee Schwalberg, Dorothy Borzsak, Jennifer Dunbar, Christopher Botsko, Jamie Hart, Michael Perry, and Adrianne Dulio. Findings From The State Childrens Health Insurance Program Focus Group Study. Washington, DC: Health Systems Research, January 2002.
Centers for Medicare & Medicaid Services (CMS). The State Childrens Health Insurance Program Preliminary Annual Enrollment Report for Fiscal Year 2002. Added January 31, 2003. Website: [http://www.cms.hhs.gov/schip/schip02.pdf]
Hill, Ian, Mary Harrington, and Corinna Hawkes. Congressionally Mandated Evaluation of the State Childrens Health Insurance Program: Interim Cross-cutting Report on the Findings from Six State Site Visits. Princeton, NJ: Mathematica Policy Research, Inc., November 25, 2002.
Kaye, Neva, Kirsten Wysen, and Cynthia Pernice. SCHIP Family Coverage in Three States: A Report on the Early Experiences of New Jersey, Rhode Island, and Wisconsin. Report prepared for the Assistant Secretary of Planning and Evaluation, DHHS. Washington DC: George Washington University. December 2001.
Kenney, Genevieve, Jennifer Haley, and Stephen Blumberg. Awareness and Perceptions of Medicaid and SCHIP Programs Among Low-Income Families with Uninsured Children: Findings from Early 2001. Draft Report submitted to OASPE. Washington, DC: The Urban Institute, November 8, 2002.