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Government News
Proposal to End SCHIP Generates Anxiety, Optimism
Psychiatric News
Volume 44 Number 23 page 23-23

The version of health care reform passed by the House of Representatives last month would replace a national children's health insurance program with Medicaid or private insurance coverage. The provision has drawn concerns over its potential negative impact on children's health.

The health care reform measure (HR 3962) passed by the House on November 7 would phase out the State Children's Health Insurance Program (SCHIP) by 2014 and move its 7 million beneficiaries to Medicaid or private insurance plans. Children whose family's income is less than 150 percent of the federal poverty level would move to Medicaid, while those in families with higher incomes would be eligible for coverage through a new health insurance marketplace, or exchange, that would include private and public insurance plans.

The coverage provisions of the House bill would have a mixed impact on children, according to mental health advocates. Both Medicaid and private insurance plans may offer some improvements in coverage of health care services, but there may be treatment breaks during the transition and lack of coverage for so-called wraparound services, which benefit many children with mental illness.

The expected lack of wraparound services in private insurance plans "remains a concern, especially when you have kids with serious emotional disturbances who need the auxiliary support systems" that wraparound programs provide, Lizbet Boroughs, associate director of APA's Department of Government Relations, told Psychiatric News.

Those auxiliary benefits are available to some SCHIP beneficiaries through the Early and Periodic Screening, Diagnosis, and Treatment program or state programs that provide similar services, usually including case management, which can be crucial for children with mental illness.

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Another area of concern involves transition complications that could lead to a lapse in services as children move from SCHIP to Medicaid or private exchange plans.

To address the concerns, House leaders supported the addition of a requirement that the secretary of Health and Human Services certify that private insurance plans to which children may be shifted provide comparable benefits before any children are moved from SCHIP, as well as measures to streamline the transition process.

Another area of concern for some children's health advocates is that benefits offered through the new insurance exchanges might include higher cost sharing than is the case in SCHIP.

"Before moving children out of these successful programs, Congress should ensure that children will receive comparable or better benefits, cost-sharing protections, and access to care under any new program," wrote more than 200 organizations, including the Bazelon Center for Mental Health Law, in a letter to lawmakers in July.

However, the House bill includes subsidies for families with low-to-moderate incomes and requires some cost sharing. While the bill structures cost sharing differently for moderate-income families in insurance exchange plans than cost sharing in SCHIP, advocates who have studied the legislation say the financial impact on beneficiaries' families would remain unchanged.

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The potential impact of SCHIP changes has become greater because of a reauthorization measure signed by President Obama in February that is expected to expand the program to an additional 4 million children by 2013. That expansion also sought to improve mental health benefits by requiring SCHIP plans that offer mental health benefits to do so at parity with other medical/surgical benefits, as required of private insurers under the 2008 parity law (Psychiatric News, March 6).

However, the House health care reform bill could further improve access to mental health services for SCHIP beneficiaries who move into the plans offered through the insurance exchange because—unlike SCHIP plans—all of the exchange plans must include mental health care as part of the minimum benefits package.

"In the past, when things have gotten tough, there have been cases of states not including mental health benefits within their [SCHIP] health care package," said Kirsten Beronio, senior director of government affairs at Mental Health America. "So [the House bill] is a positive thing."

Another potential benefit of including former SCHIP beneficiaries in insurance exchange plans is that their parents could obtain coverage through the same insurance plan. Research has found that children are more likely to receive needed health care if they share their parents' insurance policy, due to the parents' greater familiarity with the plan's paperwork and coverage.

The legislation is expected to undergo significant changes when it is eventually combined with a health care reform bill that the Senate was debating at press time, according to health care advocates. A bill approved by the Senate Finance Committee in October chose to preserve SCHIP as currently structured.

Sen. Jay Rockefeller (D-W.Va.) was among the Finance Committee members who opposed moving SCHIP enrollees into private plans for fear it would result in inferior coverage.

"As health reform moves forward, we need to make sure children can keep their SCHIP coverage and not be forced into untested private coverage," Rockefeller said. "Health care reform should improve the coverage children have—not take their coverage away."

The Affordable Health Care for America Act can be accessed at <http://thomas.loc.gov> by searching on the bill number, HR 3962. Information on the Senate Finance Committee bill is posted at <http://finance.senate.gov/sitepages/legislation.htm>.blacksquare

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