Though states made early headway in enrolling eligible children into SCHIP, anecdotal evidence emerged as early as mid-1999 that many SCHIP enrollees were losing eligibility, or disenrolling, at the end of their initial period of coverage. It became clear during this study that states had not necessarily anticipated this issue; they had, after all, focused much of their attention on getting their programs up and running and on facilitating initial enrollment. They devoted less time to thinking about retention rates or policies to simplify children's renewal of coverage. However, three years into the program, the study states had realized that the challenge of keeping eligible children covered required their attention, and they were beginning to adapt the measures that had proved so successful for initial eligibility determination and apply them to redetermination procedures.
In addressing retention, state officials recognized that they could not easily define what an "appropriate" or "ideal" rate of retention for SCHIP enrollees might be. Rather, it is apparent that the SCHIP population is a dynamic one in which parents of enrollees move in and out of employment, and in and out of employer-sponsored health insurance coverage. Therefore, some attrition in the program is appropriate--as families obtain private coverage through new jobs, lose jobs (and income) and become Medicaid eligible, move out of state, or their children reach age 19. Some causes of disenrollment, however, are inappropriate; these include administratively complex redetermination procedures, and parental confusion regarding the steps they must take to retain their children's coverage in SCHIP and/or Medicaid. The lack of current germane research also contributes to the uncertainty about appropriate retention rates and strategies. In March 2002, the National Academy for State Health Policy published findings from a telephone survey of parents in seven states and focus groups in three of the states (Pernice et al. 2002). This study showed that two-thirds of the children who were disenrolled either had private coverage or had parents who believed they were no longer eligible.