Is SCHIP reauthorization enough for now?
The State Children’s Health Insurance Program
Congressional Budget Office
A CBO Paper
May 2007
The State Children’s Health Insurance Program (SCHIP) was established by the Balanced Budget Act of 1997 to expand health insurance coverage to uninsured children in families with income that is modest but too high to qualify for Medicaid. SCHIP is financed jointly by the federal government and the states, and it is administered by the states within broad federal guidelines. Since the program’s inception, the Congress has provided nearly $40 billion for it. Approximately 6.6 million children were enrolled in SCHIP at some time during 2006, as were about 670,000 adults through waivers of statutory provisions. Under current law, SCHIP is not authorized to continue beyond 2007, and the Congress is considering reauthorization of the program this year.
The Effect of SCHIP on Children’s Health Insurance Coverage
SCHIP has significantly reduced the number of low-income children who are uninsured. According to the Congressional Budget Office’s (CBO’s) analysis, among children living in families with income between 100 percent and 200 percent of the poverty level (the group with the greatest increase in eligibility for public coverage under SCHIP), the uninsurance rate fell from 22.5 percent in 1996 (the year before SCHIP was enacted) to 16.9 percent in 2005, a reduction of 25 percent. In contrast, the uninsurance rate among higher-income children remained relatively stable during that period.
Key Issues for Reauthorizing SCHIP
The process of reauthorizing SCHIP gives the Congress an opportunity to reexamine the program’s design and reassess budgetary priorities. A key issue is the level of federal funding for the program and whether funding levels will be adjusted to account for growth in enrollment and health care costs and for possible changes in the design of the program, including eligibility rules and benefit packages.
A number of options to modify the program have been suggested:
- Intensifying efforts to enroll uninsured children who are eligible for SCHIP or Medicaid.
- Redefining the target population — either broadening it or narrowing it — by changing the income levels determining eligibility; changing the rules regarding the eligibility of adults; or expanding eligibility to new groups, such as pregnant women, legal immigrants, and children of state employees.
- Changing the formula that determines the distribution of federal SCHIP funding among states.
- Modifying the rules for the redistribution of unspent funds.
- Changing the matching rates for SCHIP.
- Modifying the benefits that states are required to provide — for example, by requiring that states provide services covered under Medicaid’s Early and Periodic Screening, Diagnosis, and Treatment program.
http://www.cbo.gov/ftpdocs/80xx/doc8092/05-10-SCHIP.pdf
Comment:
By Don McCanne, MD
About two-thirds of Americans now believe that we need comprehensive reform of health care financing to make health care affordable for everyone. Yet incrementalists, those currently in control of Congress, say that we should take care of children first. What politician would go on recored as opposing health care for children, especially when their health care costs are quite low?
Taking care of children has been interpreted to mean that the State Children’s Health Insurance Program (SCHIP) should be reauthorized before it is automatically terminated at the end of this year. Not only should it be reauthorized, several members of Congress believe that it should be modified to make it more effective. What does all of this mean?
First, we should look at how effective this program has been. The targeted population, those uninsured children in families between 100 percent and 200 percent of the poverty level, still has three-fourths of eligible children without coverage. And there has been no decline in the uninsurance rate of eligible children in families with incomes above 200 percent of poverty. Further, this very modest gain in insurance coverage for children has been more than offset by the increases in the numbers of uninsured adults.
Obviously, if we want to insure all children, changes must be made in the program to make enrollment automatic for the uninsured. But look at the proposals for SCHIP reform. At best, these proposals might reduce the numbers of uninsured by maybe 10 percent by shifting the steady state point between enrollment and attrition.
Congress should reauthorize SCHIP, but only because it would be impossible to have in place a comprehensive, universal health insurance program before SCHIP is to be terminated. Members of Congress should not waste much of their time tweaking this program while pretending that this is the only politically feasible reform that we can accomplish at this time.
Although it is unrealistic to expect President Bush to sign a national health insurance act, that does not mean that Congress should walk away from the problem. There is much work to be done. The process can begin with the markup of HR 676, the United States National Health Insurance Act. We can create the final, polished version of this legislation that we desperately need. Then, in 2009, when we have in place a Congress and a President who really do care about the health of all Americans, we can make truly effective health care reform the very first item of business.
Presidential candidates, are you listening?