In 1997, Congress passed legislation creating the State Children’s 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 population—enrollees, 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 Children’s 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 states—slightly 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 SCHIP’s 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 children’s 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.