Are new SCHIP provisions too hard for states to meet?

June 1, 2008

Senators are concerned about the new child state health insurance rules mandated by the Centers for Medicare and Medicaid Services in an August 17, 2007.

The Aug. 17 letter also set other rules: the children in question must be uninsured for a year before they get SCHIP, and states must ensure that the number of privately insured children in the target population has not decreased by more that 2% over the past five years.

Defending the administration's policy was Dennis Smith, director of the CMS Center for Medicaid and State Operations. Smith told the senators that over the last two years, there has been new interest among states in raising the eligibility level above 250%. "It became apparent," he said, "that further action was necessary to remind states of their obligation for preventing crowd-out."

Crowd-out seems to have occurred in the federal-state children's health coverage, Smith argued. Sixteen million children have been added to Medicaid and SCHIP over the past decade, he said. For children between 100% and 200% of poverty, he noted, the percentage of those with private health insurance declined from 55% in 1997 to 36% to 2006, according to the National Health Interview Survey.

Despite the fact that more children are being enrolled in SCHIP and Medicaid, according to the CBO there have been only moderate reductions in the percentage of uninsured children below 200% of poverty since 1996.

Smith, who was leaving CMS the week of the hearing, said the District of Columbia and 16 states have SCHIP eligibility above 250% of the poverty level. Based on the guidance CMS has given the states, he said, at least nine of those will meet the 95% level for children under 200% of poverty.

According to CMS, SCHIP enrollment expanded from 660,000 to 6.7 million in 2006. The preliminary number for 2007 is 7.1 million. The federal government's matching rate of SCHIP varies among states from 65% to 83%.

CBO says that even in those states with eligibility up to 250%, the great majority of SCHIP-covered children are below 200%.

KATHRYN FOXHALL is a contributing editor to Contemporary Pediatrics.