SCHIP Moves Forward in the Face of Uncertainty
The U.S. Census Bureau reported that the number of uninsured children in 2007 fell from the previous year by 500,000 to 8.1 million. The decrease is primarily attributable to an increase in publicly sponsored coverage of children through Medicaid and the State Children’s Health Insurance Program (SCHIP).[i]
In 2007, Congress and the president failed to agree on legislation that would reauthorize SCHIP. Instead, they extended the current reauthorization until March 31, 2009. In addition, the Centers for Medicare & Medicaid Services (CMS) issued a policy directive on August 17, 2007, that made states ineligible to receive federal SCHIP funds for children with gross family income above 250 percent of the Federal Poverty Level (FPL) unless the following two conditions are met: 1) 95 percent of children with family income below 200 percent FPL are covered; and 2) employer-sponsored insurance for children with family income below 200 percent FPL has not fallen by more than 2 percentage points during the previous five years.
If a state meets these standards, CMS requires additional provisions to prevent crowd-out of private coverage. For children in families earning above 250 percent FPL, the child must be uninsured for at least a year to be eligible for SCHIP coverage, and the state must require the maximum amount of legally permissible cost sharing.[ii] Eight states filed suit again the Bush Administration in October 2007, contending that the new eligibility rules either force out children already in the program or leave many thousands of otherwise eligible children without coverage.[iii] In April 2008, lawyers from the Government Accountability Office (GAO) issued their opinion that the Bush Administration violated federal law with the August 17 directive.[iv]
Despite these challenges, the following eight states enacted or received CMS approval for SCHIP expansions in 2008: Colorado, Indiana, Iowa, Kansas, Louisiana, New Jersey, New York, and North Dakota.[v]
Planned Expansions of 300 Percent FPL and Above
Iowa passed legislation that sets a target of covering all its children by 2010. The law includes an expansion of hawk-i (SCHIP) to 300 percent FPL and 12-month continuous Medicaid eligibility, among other measures.[vi] Iowa needs CMS approval for its expansion.[vii]
New Jersey enacted a law in July mandating coverage of all children through either public or private insurance within one year of the bill’s passage.[viii] Children in families with income above 350 percent FPL may buy into the existing FamilyCare (SCHIP) program and receive the same services available to FamilyCare beneficiaries, with monthly premiums ranging from $137 for a family with one child to $411 for a family with three or more children. The state estimates that 15,000 children could benefit from the program.[ix] The law also increased the FamilyCare income eligibility level for parents from 133 to 200 percent FPL. With the expansion, the number of adults covered under NJ FamilyCare is expected to increase from 97,000 to 153,768 by the end of fiscal year 2011.[x]
New York’s fiscal year 2009 budget allocates $19 million in state funds for a SCHIP eligibility expansion from 250 to 400 percent FPL. After CMS denied New York’s request for expansion beyond 250 percent FPL, New York decided to fund its expansion with state-only money and initiated implementation in September.[xi]
Planned Expansions of 250 Percent FPL and Below
CMS approved an increase for Indiana’s SCHIP up to 250 percent FPL (from 200 percent), which falls short of the state’s enacted 2007 SCHIP expansion to cover children up to 300 percent FPL.[xii]
CMS approved an increase in Louisiana’s SCHIP eligibility level for children from 200 to 250 percent FPL, reflecting a reduction from the 300 percent FPL originally passed by the Louisiana legislature. Implementation of the expansion began in June 2008.[xiii]
Kansas passed an eligibility expansion of HealthWave (Medicaid and SCHIP) for children from the current level of 200 percent FPL to 225 percent FPL beginning in 2009, and to 250 percent FPL by 2010—if more federal funding becomes available.[xiv]
Colorado enacted a SCHIP expansion for Child Health Plan Plus (CHP+) as part of an $18.4 billion operating and capital budget. The expansion covers pregnant women and children in families earning less than 225 percent FPL (up from 205 percent FPL) and, when fully implemented, will provide benefits for an estimated additional 9,040 children and 686 pregnant women. The law also expanded CHP+ mental health benefits to correspond with those offered through Medicaid and allocated funds to provide medical homes to approximately 100,000 Medicaid and CHP+ children. The law permits further expansion to 250 percent FPL if funds are available in the future. Implementation will begin in March 2009.[xv]
In June, CMS approved North Dakota’s request to expand SCHIP eligibility from 140 to 150 percent FPL. Implementation of the expansion began in October, with an additional 800 uninsured children expected to gain coverage during the first year. In North Dakota, however, families may disregard child care expenses, payroll taxes, child support, and other expenses when calculating their income in determining eligibility such that children in some families earning close to 200 percent FPL may qualify for coverage.[xvi]
Beyond Eligibility Expansions
New Mexico and Utah have taken steps to increase enrollment but have not passed eligibility expansions. Utah passed legislation to require the state’s SCHIP to operate under open enrollment. In the past, open enrollment has been irregular, but the law mandates that any child qualifying for the program will be guaranteed coverage.[xvii] New Mexico’s legislature agreed to fund $22.5 million to increase coverage of eligible children through Medicaid and SCHIP.[xviii]
While some states have made SCHIP expansion a priority, approximately 8 million children remain uninsured.[xix] As state officials and other interested stakeholders continue efforts to expand health coverage for children, they will be monitoring the new administration’s and Congress’ consideration of SCHIP reauthorization in 2009.
[i] DeNavas-Walt, C.et al. Income, Poverty, and Health Insurance Coverage in the United States: 2007, U.S. Census Bureau, Current Population Reports, Washington, DC: U.S. Government Printing Office, 2008, pp. 60-235.
[ii] “States Moving Forward: Children’s Health Coverage in 2007-08,” Georgetown University Health Policy Institute, Center for Children and Families, September 2008.
[iii] Kershaw, S. “8 States Plan to Press Bush on Health Bill,” The New York Times, October 2, 2007.
[iv] Pear, R. “President is Rebuffed on Program for Children,” The New York Times, April 19, 2008.
[v] “States Moving Forward: Children’s Health Coverage in 2007-08” op. cit.
[vi] Ibid.
[vii] “Updated Health Care Bill HF 2539,” Iowa House Democratic Research Staff, 82 General Assembly, Bill Summary, April 22, 2008.
[viii] “States Moving Forward: Children’s Health Coverage in 2007-08” op. cit.
[ix] Ibid; “Recent State Updates,” St@teside, State Coverage Initiatives, March 2008, available at www.statecoverage.org.
[x] Ibid; “New Law Expanding Coverage for Children, Adults Signals First Phase of Universal Plan,” BNA’s Health Care Policy Report, Vol.16, No.28, July 14, 2008.
[xi] “States Moving Forward: Children’s Health Coverage in 2007-08” op. cit.
[xii] Ibid.
[xiii] Ibid; “Recent State Updates,” St@teside, State Coverage Initiatives, March 2008, available at www.statecoverage.org.
[xiv] Ibid; “Recent State Updates,” St@teside, State Coverage Initiatives, May 2008, available at www.statecoverage.org.
[xv] Ibid.
[xvi] “States Moving Forward: Children’s Health Coverage in 2007-08” op. cit.; “Recent State Updates,” St@teside, State Coverage Initiatives, June 2008, available at www.statecoverage.org.
[xvii] “States Moving Forward: Children’s Health Coverage in 2007-08” op. cit.
[xviii] Governor Bill Richardson Reacts to Special Session Results op. cit.; “New Mexico Approves Modest Funding Increase to Cover Additional Children,”St@teside, State Coverage Initiatives, September 2008, available at www.statecoverage.org.
[xix] DeNavas-Walt, C. op. cit.
