One bright spot in the bleak picture of the growing number of uninsured
Americans has been the State Children's Health Insurance Program (SCHIP).
That program, enacted as part of the Balanced Budget Act of 1997, helped
reduce the national percentage of poor children without insurance from 22.4
percent in 1997 to 15.4 percent in 2003.
SCHIP is targeted to families with incomes between 100 percent and 200
percent of the poverty level and was designed to build on the Medicaid
For the SCHIP-eligible population, the decline in the number of uninsured
was even more dramatic than for all low-income children. While 22.8 percent
were uninsured in 1997, only 14.7 percent were in 2003.
As of December 2003, more than 3,927,000 children were enrolled in the
Data for the six-month period prior to that date, however, show that
enrollment declined for the first time in the program's history.
In late July, the Kaiser Commission on Medicaid and the Uninsured sponsored
a briefing to discuss issues related to that decline and a commissioned paper,"
SCHIP Program Enrollment: December 2003 Update," prepared by
Vernon K. Smith, Ph.D., of Health Management Associates.
Smith told the audience that "SCHIP had enjoyed great support among
state policy makers, hospitals, doctors, and among families who see the
program as very mainstream health care coverage for their children."
"The program with its enhanced matching rate [70 percent federal
funds], relatively low cost per enrollee, and its success in lowering the
number of uninsured children, was largely spared during early [state] budget
cuts," he noted in his paper.
But, he pointed out, beginning with the states' FY 2003, officials began
using a variety of strategies to save money and limit growth. They included
reduced spending on outreach, enrollment caps, increased premiums and cost
sharing, changes in eligibility, intensified eligibility verification, and
changes in enrollment procedures, such as a move to allow enrollment only at
specified times of the year.
He told the audience that despite those changes, "the story of 2003
is really a story of two different groups of states."
In 41 states, enrollment increased. Texas, Maryland, and New York accounted
for almost all of the decline in enrollment, with more than half of the
decline attributable to Texas enrollment figures (see related story on page
The story is also about the complicated and often unintended consequences
of policy decisions and about the effects of administrative procedures and
Conni Wells, director of the Florida Institute for Family Involvement, told
the audience that Florida had realized an "incredible success" in
its SCHIP program, called Kid Care. But the success "imposed an
incredible burden upon the state, which has been transcended down into an
incredible impact on the families we serve."
As a result of state budget problems, officials established a waiting list
for enrollment. That list ultimately grew to 90,000 children and "became
an embarrassment." Program officials recorded a 40 percent increase in
the number of calls from families wanting help.
"Families were confused, and families were scared," said
The legislature decided to get rid of the waiting list by allowing
enrollment only twice a year and by tightening procedures for eligibility
Federal law stipulates that a child can not be enrolled in SCHIP if he or
she is eligible for Medicaid or employer-sponsored insurance. Florida passed
legislation making it a felony if a person applied for Kid Care on behalf of a
child who was eligible for employer-sponsored insurance.
The legislature also established new requirements for income verification,
such as the submission of W-2 forms and payroll stubs for every member of the
family over age 17, as well as income-tax records.
Wells said, "The closed enrollment remains a real mystery to
families. How is it going to happen? When is it going to happen? We're talking
massive pieces of paper and marketing that are going to have to go on in order
to educate families and get them prepared for what they have to do."
The result has been an increase in calls from families wanting help of 20
percent over the initial 40 percent. "The only change we saw,"
said Wells, "is that there is no longer a wait list."
Katie Humphreys, former secretary of Indiana's Family and Social Services
Administration, said that Hoosier Healthwise combines SCHIP and Medicaid
programs in Indiana producing one program with different income eligibility
The major policy shift in response to budgetary problems was the decision
to stop continuous enrollment and to require that families reapply for
coverage when information becomes available to the state that their employment
status has changed.
Some families mistakenly were dropped from coverage, Humphreys said,
because of rigid application of policies related to welfare reform.
Outreach efforts were also curtailed.
After the shift, growth in enrollment
occurred in counties and communities with higher socioeconomic demographics,
while declining in counties with high rates of unemployment.
Texas also reported that the greatest declines in SCHIP enrollment occurred
among the poorest families after officials instituted a number of changes.
In Oregon, when premiums were added for the Oregon Health Plan, the poorest
beneficiaries were most likely to lose coverage (Psychiatric News,
Humphries told the audience that evaluation will be required to learn"
which children are most impacted by the policy changes.. .and the
John Folkemer, M.P.A., executive director of the Office of Planning and
Finance in the Maryland Department of Health and Mental Hygiene and Medicaid
Director, said that Maryland's decrease in enrollment was "more illusion
than reality." (The data show a 21 percent decrease from June to
In 2003, the legislature imposed a $37 month premium for families with
incomes between 185 percent and 200 percent of the FPL. Those with higher
incomes always had a premium charge. Legislators also froze enrollment for
those between 200 percent and 300 percent of FPL.
In the course of checking eligibility, the state moved 15,000 children from
SCHIP to Medicaid. Only a quarter of the children in the group with the new
premium dropped coverage. State officials worked closely with the managed care
companies administering the program to persuade parents of the importance of
paying the premium.
A survey revealed that "most" of those who disenrolled found
other insurance programs.
A transcript of the briefing on SCHIP and related materials are
posted online at<www.kaisernetwork.org/health—cast/hcastindex.cfm?display=detail&hc=1226>.▪