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State Children's Health Insurance Program and Pediatrics: Background, Policy Challenges, and Role in Child Health Care Delivery

State Children's Health Insurance Program and Pediatrics: Background, Policy Challenges, and Role... One in 4 US children has health insurance through public, government-sponsored programs—Medicaid or the State Children's Health Insurance Program (SCHIP). These public programs are important not only because of the vast number of children they cover but also because children who lack health insurance have worse access to care than those with either public or private health insurance. Public programs also disproportionately serve children with special health care needs. Furthermore, children's health care facilities depend heavily on Medicaid and SCHIP patients and the accompanying reimbursements to maintain programs and services, including programs that also benefit privately insured children. Therefore, Medicaid and SCHIP policies have a tremendous impact on health care delivery to US children, shaping the scope and quality of health care as well as the nature of pediatric practice. This article reviews key aspects of SCHIP, a program whose future is at a crossroads, focusing on issues that are important to pediatricians and others who deliver care to children. What is the goal of schip? The goal of SCHIP is to provide health insurance coverage for uninsured, lower-income children whose family incomes are too high to qualify for Medicaid.1,2 To limit federal outlays and allow state flexibility in SCHIP, the federal government provides states with capped grants that offset the bulk of costs, while states design their SCHIP programs within broad federal rules. Created in 1997, SCHIP was authorized for 10 years and allotted $40 billion in federal funds for 1998 to 2007. If it is to continue, SCHIP must be reauthorized by Congress in 2007. How many children receive health insurance from schip? During 2005, SCHIP provided health insurance to 6 million children over the course of a year, many of whom would otherwise be uninsured.3,4 Around that same period, Medicaid covered 28 million children. Together, these public programs provide insurance coverage to one-quarter of US children. How is schip structured among states? Each state has the option of using SCHIP funds to allow eligible children into the state Medicaid program (ie, a Medicaid expansion), to create a separate SCHIP insurance program, or to create a combined approach (Table). States choosing the Medicaid expansion model must provide full Medicaid benefits to all enrolled children and cannot cap enrollment if allocated SCHIP funds are expended. By contrast, states choosing separate SCHIP programs can create a different set of benefits and may limit enrollment based on availability of funds. Regardless of the type of SCHIP program selected, Medicaid-eligible children must be enrolled in the state Medicaid program. Table. View LargeDownload State-by-State Data for State Children's Health Insurance Program Structure and Percentage of Uninsured Childrena There is great variability among states in eligibility criteria, benefits, premiums, and co-pays under SCHIP. The SCHIP income eligibility thresholds range from 140% of the federal poverty level (FPL) in North Dakota to 350% of the FPL in New Jersey. Overall, 41 states established SCHIP eligibility at or above the congressional target of 200% of the FPL (ie, $33 200 for a family of 3).5 Some states have used waivers to expand SCHIP beyond low-income children to include pregnant women, parents of SCHIP-insured children, and/or childless adults. These expansions are controversial; opponents believe that SCHIP funds should be used to provide insurance coverage for more children, whereas proponents argue that expanding family coverage benefits children as well. What does schip cover? There is variability among states' SCHIP benefits. The SCHIP programs that are Medicaid expansions cover the same services as Medicaid. Separate SCHIP programs have some mandatory guidelines (including provision of preventive well-child care without family cost sharing) but generally have fewer benefits and more family cost sharing than those using Medicaid expansions.3 How is schip financed? The State Children's Health Insurance Program is jointly financed by the federal and state governments through a matching funds program, a system analogous to Medicaid. The proportion paid by the federal government differs among states, with federal contributions provided as finite block grants. Each state's annual allotment is based on a formula that considers the state's share of low-income and uninsured children.6 States have 3 years to spend the allotment, after which unexpended funds can be redistributed by the federal government. Both the formula and the redistribution process are controversial. To encourage state participation, there is greater federal matching for SCHIP spending than for Medicaid spending. How is schip different from medicaid? Although Medicaid and SCHIP are both public programs that provide health insurance to low-income children and are both financed by a combination of federal and state funds, there are major differences in their structure and scope. Different family incomes: By design, children eligible for SCHIP have incomes that exceed Medicaid eligibility for the same age group in each state. Coverage under Medicaid is mandated for children aged 6 years and younger with family income up to 133% of the FPL and for children aged 6 to 18 years with family income up to 100% of the FPL. However, income levels for SCHIP are at state option. Entitlement program vs block grant: Medicaid is an open-ended entitlement program, meaning that every child who meets eligibility criteria can enroll in the program.7 Federal funds for Medicaid are guaranteed with no preset limits. By contrast, federal funds for SCHIP are provided as capped block grants to states. Therefore, SCHIP does not guarantee eligibility for individual children; states with separate SCHIP programs may cap enrollment if SCHIP funds are depleted. If SCHIP is reauthorized with fewer funds than needed to cover current enrollment, states using the Medicaid model could continue to enroll eligible children in Medicaid, drawing on Medicaid matching funds to cover those children; however, states with separate SCHIP models would have to rely exclusively on state funds, which might lead them to limit enrollment. Different levels of federal matching funds: Although determined on a state-by-state basis, the federal government's share of SCHIP spending is enhanced compared with Medicaid (on average, 70% vs 57%, respectively). Scope of coverage: Medicaid law requires a broad range of benefits, including early and periodic screening, diagnosis, and treatment, which provide children with screening and treatment services in a relatively uniform manner across states (although some exceptions to this uniformity may be possible under a waiver process and the Deficit Reduction Act of 2005). State SCHIP programs using Medicaid expansion models must provide SCHIP enrollees with these same benefits. However, states with separate SCHIP programs, although subject to broad guidelines, do not require the full benefits inherent in Medicaid. Benefits vary among these states, but generally, separate SCHIP programs have fewer benefits and additional family cost sharing compared with Medicaid. Program size: The State Children's Health Insurance Program plays a key role in providing insurance coverage to children who would otherwise be uninsured. However, SCHIP covers many fewer children than Medicaid (6 million children vs 28 million children, respectively, in 2005).3 Together, federal and state spending on children under SCHIP and Medicaid programs were $7 billion and $52 billion, respectively, in 2005.3 Whereas the majority of SCHIP spending is for children, only 16% of Medicaid spending is for children (even though 48% of Medicaid recipients are children).7 This is because Medicaid also supports health care coverage for elderly and other sick and low-income adults, and their per capita health expenses are much higher than those of covered children. When total spending is considered (including for both children and adults), SCHIP spending is about 2% of Medicaid spending.7 To what extent do pediatricians participate in schip? Adequate physician participation is key to ensuring that enrolled children have access to services. A national survey conducted by the American Academy of Pediatrics in 2000 found that participation by pediatricians in SCHIP and Medicaid was high overall (89%).8,9 However, only two-thirds of physicians accepted all SCHIP and Medicaid patients, with office-based primary care pediatricians less likely to accept patients than those in safety net settings. Physician participation in SCHIP and Medicaid varied markedly among states, and states with the lower quartile of Medicaid payments had substantially lower physician participation rates. Similar data relating physician participation in Medicaid to reimbursement have been documented by others.10-15 Less is known about physician reimbursement under SCHIP alone and about whether variation in reimbursement rates affect participation, particularly because there is heavy reliance on managed care under SCHIP. However, SCHIP fees for states that use Medicaid expansion models are the same as Medicaid fees and are thus substantially lower than Medicare fees for equivalent services. In addition to low payment, administrative burden and capitated managed care may also interfere with physicians' willingness to accept publicly covered patients.8,9 Other questions are the location of physicians who accept SCHIP and Medicaid as well as their proximity to low-income children. These issues raise questions about potential access of SCHIP- and Medicaid-covered children to needed services. How effective is schip? The State Children's Health Insurance Program is widely viewed as a success.1 Together with Medicaid, SCHIP has helped to reduce the number of uninsured low-income children by about one-third, falling from 23% in 1997 to 15% in 2004.3 To date, there is little conclusive evidence of “crowd out” (ie, few families dropped private coverage to enroll children in SCHIP). The State Children's Health Insurance Program has improved the likelihood that a child has a medical home.1,16 Aggregate data are difficult to assess owing to differences among state SCHIP programs, but individual programs have demonstrated improvements in access,1,17,18 quality of care,18 and reduction in ethnic disparities.18 A national study indicated improvements in several access measures following expansions under SCHIP.19 What challenges facing schip can affect child health care and pediatrics? SCHIP Reauthorization There is broad support for reauthorizing SCHIP, which is generally viewed as a successful program. However, the content and scope of a reauthorized SCHIP program are controversial—particularly regarding overall funding, eligibility criteria, and formulas for fund allocations and reallocations among states. Funding Many states already face shortfalls in SCHIP funds. If SCHIP is reauthorized at its current funding level, this would not be adequate to maintain current enrollment levels; more than a million children could lose coverage. In the coming years, it is estimated that more than $12 billion in additional federal funds over the next 5 years (and an additional $30 billion over 10 years) is needed to maintain current SCHIP enrollment levels.20,21 Eligibility There is controversy about whether SCHIP funds should be used only to cover low-income children or whether coverage should be expanded to parents of eligible children, higher-income children, pregnant women, and/or low-income childless adults. Formula for Allocation and Reallocation of Federal SCHIP Funds to States The formula for distribution of federal SCHIP funds across the states is controversial because of concerns about the quality of the data used to derive the formula, the fact that state allotments decrease as the number of low-income uninsured persons declines, and current rules that allow states to retain their allotments for 3 years regardless of current needs. Perhaps even more controversial are methods for reallocating unexpended SCHIP funds from states with surpluses to others facing shortfalls. The complex financing of SCHIP has led to uncertainties among states in predicting available SCHIP funds. Whereas states can all benefit from SCHIP and can pull together to maintain and enhance the program, the formula issue potentially divides states. Medicaid The success of SCHIP rests in part on its function of building on Medicaid by covering children who are ineligible for Medicaid. In this sense, many argue that continued SCHIP success depends on maintaining or strengthening Medicaid. However, a reauthorized SCHIP program will require additional funds to maintain current coverage, and it might be suggested that these funds come from cuts in Medicaid. Indeed, the success of SCHIP has raised questions about whether Medicaid should also have SCHIP-like features such as caps on funding, greater family cost sharing, and/or fewer mandatory benefits. Such measures might reduce costs while providing coverage. However, children with poor health status are more likely to be covered by Medicaid than SCHIP, and SCHIP's capacity to improve their health status may not match the more extensive Medicaid benefits. Also, cost sharing results in reduced use of essential health services, particularly for low-income families. Further, SCHIP has shown that “caps on federal Medicaid spending could leave more children without coverage and that the imprecision of any funding formulas would lead to poorly targeted distribution of funds for states.”7 Quality of Health Care Delivery Most states have reported on at least 1 of 4 quality measures for their SCHIP programs.22 However, inconsistencies in measurement and reporting remain, and these 4 measures are very limited in scope. Further, there is no required reporting for measures of inpatient care. In other areas of health (eg, Medicare), there is a growing impetus to report health care indices and assess the quality of care. Child health programs have been late to enter the quality-reporting and analysis arena in part because reliable and valid measures for children were lacking. However, progress has been made in the development of such measures. The reauthorization of SCHIP provides an opportunity to incorporate well-designed quality assessment in a model child health program. Millions of US Children Remain Uninsured Currently, according to the US census, 9 million US children do not have health insurance. Close to three-quarters of these children are eligible for Medicaid or SCHIP but are not enrolled.23 Thus, reducing the uninsured problem among US children hinges on enrolling more eligible children in both Medicaid and SCHIP. Expanding public coverage will require adequate federal funding in both programs and policy changes that address enrollment barriers.24-26 Back to top Article Information Correspondence: Dr Leona Cuttler, The Rainbow Center for Child Health Policy, Rainbow Babies and Children's Hospital, Case Western Reserve University, 11100 Euclid Ave, Room 737, Cleveland, OH 44106 (leona.cuttler@case.edu). Author Contributions:Study concept and design: Cuttler and Kenney. Acquisition of data: Cuttler. Drafting of the manuscript: Cuttler and Kenney. Critical revision of the manuscript for important intellectual content: Cuttler and Kenney. Study supervision: Cuttler. Financial Disclosure: None reported. Funding/Support: This work was supported in part by an award from the Robert Wood Johnson Foundation (Dr Cuttler) and the Rainbow Babies and Children's Hospital Board of Trustees (Dr Cuttler). Additional Contributions: We thank Justin Yee, BA, of the Urban Institute for providing helpful research assistance. References 1. Kenney GYee J SCHIP at a crossroads: experience to date and challenges ahead. Health Aff (Millwood) 2007;26 (2) 356- 369PubMedGoogle ScholarCrossref 2. Kenney GChang DI The State Children's Health Insurance Program: successes, shortcomings, and challenges. Health Aff 2004;23 (5) 51- 62PubMedGoogle ScholarCrossref 3. Kaiser Family Foundation, A decade of SCHIP experience and issues for reauthorization. http://www.kff.org/medicaid/upload/7574-2.pdfAccessed January 20, 2007 4. Kenney GCook A Coverage Patterns Among SCHIP-Eligible Children and Their Parents: Health Policy Online Brief 15. washington, dc Urban Institute2007; 5. Ross DCCox LMarks CKaiser Family Foundation, Resuming the path to health coverage for children and parents: a 50 state update on eligibility rules, enrollment and renewal procedures, and cost-sharing practices in Medicaid and SCHIP in 2006. http://www.kff.org/medicaid/upload/7608.pdfAccessed January 20, 2007 6. Herz EJFernandez BPeterson C State Children's Health Insurance Program (SCHIP): a brief overview. http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/RL3047303232005.pdfAccessed July 20, 2006 7. Kaiser Family Foundation, Health coverage for low-income population: a comparison of Medicaid and SCHIP. http://www.kff.org/medicaid/upload/7488.pdfAccessed January 14, 2007 8. Data raise concerns about Medicaid access. AAP News 2001;18 (4) 143Google Scholar 9. Bucciarelli RL The effect of Medicaid participation by private and safety net pediatricians on incremental expansion of coverage for children. Pediatrics 2003;112 (2) 416PubMedGoogle ScholarCrossref 10. Berman SDolins JTang S-FYudkowsky BK Factors that influence the willingness of private primary care pediatricians to accept more Medicaid patients. Pediatrics 2002;110 (2, pt 1) 239- 248PubMedGoogle ScholarCrossref 11. Zuckerman SMcFeeters JCunningham PNichols L Changes in Medicaid physician fees, 1998-2003: implications for physician participation. Health Aff (Millwood) 2004;Suppl Web ExclusivesW4-374- W4-384PubMeddoi: 10.1377/hlthaff.w4.374Google Scholar 12. Skaggs DLClemens SMVitale MGFemino JDKay RM Access to orthopedic care for children with Medicaid vs private insurance in California. Pediatrics 2001;107 (6) 1405- 1408PubMedGoogle ScholarCrossref 13. Tang S-FAmerican Academy of Pediatrics, Medicaid reimbursement survey, 2001: 50 states and the District of Columbia. http://www.aap.org/research/medreimPDF01/all_states.PDFAccessed April 9, 2007 14. Wang ECChoe MCMeara JGKoempel JA Inequality of access to surgical specialty health care: why children with government-funded insurance have less access than those with private insurance in southern California. Pediatrics 2004;114 (5) e584- e590PubMedGoogle ScholarCrossref 15. Cunningham PMay JH Medicaid Patients Increasingly Concentrated Among Physicians: Tracking Report No. 16. Washington, DC Center for Studying Health System Change2006; 16. Quinn ARosenbach M Beyond coverage: SCHIP makes strides toward providing a usual source of care to low-income children. http://www.mathematica-mpr.com/publications/PDFs/schipstrides.pdfAccessed January 14, 2007 17. Damiano PCWillard JCMomany ETChowdhury J The impact of the Iowa S-SCHIP program on access, health status, and the family environment. Ambul Pediatr 2003;3 (5) 263- 269PubMedGoogle ScholarCrossref 18. Shone LPDick AWKlein JDZwanziger JSzilagyi PG Reduction in racial and ethnic disparities after enrollment in the State Children's Health Insurance Program. Pediatrics 2005;115 (6) e697- e705PubMedGoogle ScholarCrossref 19. Davidoff AKenney GDubay L Effects of the State Children's Health Insurance Program expansions on children with chronic health conditions. Pediatrics 2005;116 (1) e34- e42PubMedGoogle ScholarCrossref 20. Broaddus MPark E Freezing SCHIP Funding in Coming Years Would Reverse Recent Gains in Children's Health Coverage. Washington, DC Center on Budget and Policy Priorities2006; 21. Peterson CL SCHIP Original Allotments: Description and Analysis. Washington, DC Congressional Research Service2006; 22. Day SKatz ARosenbach M Improving performance measurement in the State Children's Health Insurance Program. http://www.mathematica-mpr.com/publications/PDFs/performmeasure.pdfAccessed January 14, 2007 23. Dubay LHolahan JCook A The uninsured and the affordability of health insurance coverage. Health Aff (Millwood) 2007;26 (1) w22- w30PubMedGoogle ScholarCrossref 24. Dorn SKenney G Automatically Enrolling Eligible Children and Families into Medicaid and SCHIP: Opportunities, Obstacles, and Options for Federal Policymakers. New York, NY Commonwealth Fund2006; 25. Summer LMann C Instability of Public Health Insurance Coverage for Children and Their Families: Causes, Consequences, and Remedies. New York, NY Commonwealth Fund2006; 26. Haley JKenney G Low-income uninsured children with special health care needs: why aren't they enrolled in public health insurance programs? Pediatrics 2007;119 (1) 60- 68PubMedGoogle ScholarCrossref http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Archives of Pediatrics & Adolescent Medicine American Medical Association

State Children's Health Insurance Program and Pediatrics: Background, Policy Challenges, and Role in Child Health Care Delivery

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Publisher
American Medical Association
Copyright
Copyright © 2007 American Medical Association. All Rights Reserved.
ISSN
1072-4710
DOI
10.1001/archpedi.161.7.630
pmid
17606824
Publisher site
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Abstract

One in 4 US children has health insurance through public, government-sponsored programs—Medicaid or the State Children's Health Insurance Program (SCHIP). These public programs are important not only because of the vast number of children they cover but also because children who lack health insurance have worse access to care than those with either public or private health insurance. Public programs also disproportionately serve children with special health care needs. Furthermore, children's health care facilities depend heavily on Medicaid and SCHIP patients and the accompanying reimbursements to maintain programs and services, including programs that also benefit privately insured children. Therefore, Medicaid and SCHIP policies have a tremendous impact on health care delivery to US children, shaping the scope and quality of health care as well as the nature of pediatric practice. This article reviews key aspects of SCHIP, a program whose future is at a crossroads, focusing on issues that are important to pediatricians and others who deliver care to children. What is the goal of schip? The goal of SCHIP is to provide health insurance coverage for uninsured, lower-income children whose family incomes are too high to qualify for Medicaid.1,2 To limit federal outlays and allow state flexibility in SCHIP, the federal government provides states with capped grants that offset the bulk of costs, while states design their SCHIP programs within broad federal rules. Created in 1997, SCHIP was authorized for 10 years and allotted $40 billion in federal funds for 1998 to 2007. If it is to continue, SCHIP must be reauthorized by Congress in 2007. How many children receive health insurance from schip? During 2005, SCHIP provided health insurance to 6 million children over the course of a year, many of whom would otherwise be uninsured.3,4 Around that same period, Medicaid covered 28 million children. Together, these public programs provide insurance coverage to one-quarter of US children. How is schip structured among states? Each state has the option of using SCHIP funds to allow eligible children into the state Medicaid program (ie, a Medicaid expansion), to create a separate SCHIP insurance program, or to create a combined approach (Table). States choosing the Medicaid expansion model must provide full Medicaid benefits to all enrolled children and cannot cap enrollment if allocated SCHIP funds are expended. By contrast, states choosing separate SCHIP programs can create a different set of benefits and may limit enrollment based on availability of funds. Regardless of the type of SCHIP program selected, Medicaid-eligible children must be enrolled in the state Medicaid program. Table. View LargeDownload State-by-State Data for State Children's Health Insurance Program Structure and Percentage of Uninsured Childrena There is great variability among states in eligibility criteria, benefits, premiums, and co-pays under SCHIP. The SCHIP income eligibility thresholds range from 140% of the federal poverty level (FPL) in North Dakota to 350% of the FPL in New Jersey. Overall, 41 states established SCHIP eligibility at or above the congressional target of 200% of the FPL (ie, $33 200 for a family of 3).5 Some states have used waivers to expand SCHIP beyond low-income children to include pregnant women, parents of SCHIP-insured children, and/or childless adults. These expansions are controversial; opponents believe that SCHIP funds should be used to provide insurance coverage for more children, whereas proponents argue that expanding family coverage benefits children as well. What does schip cover? There is variability among states' SCHIP benefits. The SCHIP programs that are Medicaid expansions cover the same services as Medicaid. Separate SCHIP programs have some mandatory guidelines (including provision of preventive well-child care without family cost sharing) but generally have fewer benefits and more family cost sharing than those using Medicaid expansions.3 How is schip financed? The State Children's Health Insurance Program is jointly financed by the federal and state governments through a matching funds program, a system analogous to Medicaid. The proportion paid by the federal government differs among states, with federal contributions provided as finite block grants. Each state's annual allotment is based on a formula that considers the state's share of low-income and uninsured children.6 States have 3 years to spend the allotment, after which unexpended funds can be redistributed by the federal government. Both the formula and the redistribution process are controversial. To encourage state participation, there is greater federal matching for SCHIP spending than for Medicaid spending. How is schip different from medicaid? Although Medicaid and SCHIP are both public programs that provide health insurance to low-income children and are both financed by a combination of federal and state funds, there are major differences in their structure and scope. Different family incomes: By design, children eligible for SCHIP have incomes that exceed Medicaid eligibility for the same age group in each state. Coverage under Medicaid is mandated for children aged 6 years and younger with family income up to 133% of the FPL and for children aged 6 to 18 years with family income up to 100% of the FPL. However, income levels for SCHIP are at state option. Entitlement program vs block grant: Medicaid is an open-ended entitlement program, meaning that every child who meets eligibility criteria can enroll in the program.7 Federal funds for Medicaid are guaranteed with no preset limits. By contrast, federal funds for SCHIP are provided as capped block grants to states. Therefore, SCHIP does not guarantee eligibility for individual children; states with separate SCHIP programs may cap enrollment if SCHIP funds are depleted. If SCHIP is reauthorized with fewer funds than needed to cover current enrollment, states using the Medicaid model could continue to enroll eligible children in Medicaid, drawing on Medicaid matching funds to cover those children; however, states with separate SCHIP models would have to rely exclusively on state funds, which might lead them to limit enrollment. Different levels of federal matching funds: Although determined on a state-by-state basis, the federal government's share of SCHIP spending is enhanced compared with Medicaid (on average, 70% vs 57%, respectively). Scope of coverage: Medicaid law requires a broad range of benefits, including early and periodic screening, diagnosis, and treatment, which provide children with screening and treatment services in a relatively uniform manner across states (although some exceptions to this uniformity may be possible under a waiver process and the Deficit Reduction Act of 2005). State SCHIP programs using Medicaid expansion models must provide SCHIP enrollees with these same benefits. However, states with separate SCHIP programs, although subject to broad guidelines, do not require the full benefits inherent in Medicaid. Benefits vary among these states, but generally, separate SCHIP programs have fewer benefits and additional family cost sharing compared with Medicaid. Program size: The State Children's Health Insurance Program plays a key role in providing insurance coverage to children who would otherwise be uninsured. However, SCHIP covers many fewer children than Medicaid (6 million children vs 28 million children, respectively, in 2005).3 Together, federal and state spending on children under SCHIP and Medicaid programs were $7 billion and $52 billion, respectively, in 2005.3 Whereas the majority of SCHIP spending is for children, only 16% of Medicaid spending is for children (even though 48% of Medicaid recipients are children).7 This is because Medicaid also supports health care coverage for elderly and other sick and low-income adults, and their per capita health expenses are much higher than those of covered children. When total spending is considered (including for both children and adults), SCHIP spending is about 2% of Medicaid spending.7 To what extent do pediatricians participate in schip? Adequate physician participation is key to ensuring that enrolled children have access to services. A national survey conducted by the American Academy of Pediatrics in 2000 found that participation by pediatricians in SCHIP and Medicaid was high overall (89%).8,9 However, only two-thirds of physicians accepted all SCHIP and Medicaid patients, with office-based primary care pediatricians less likely to accept patients than those in safety net settings. Physician participation in SCHIP and Medicaid varied markedly among states, and states with the lower quartile of Medicaid payments had substantially lower physician participation rates. Similar data relating physician participation in Medicaid to reimbursement have been documented by others.10-15 Less is known about physician reimbursement under SCHIP alone and about whether variation in reimbursement rates affect participation, particularly because there is heavy reliance on managed care under SCHIP. However, SCHIP fees for states that use Medicaid expansion models are the same as Medicaid fees and are thus substantially lower than Medicare fees for equivalent services. In addition to low payment, administrative burden and capitated managed care may also interfere with physicians' willingness to accept publicly covered patients.8,9 Other questions are the location of physicians who accept SCHIP and Medicaid as well as their proximity to low-income children. These issues raise questions about potential access of SCHIP- and Medicaid-covered children to needed services. How effective is schip? The State Children's Health Insurance Program is widely viewed as a success.1 Together with Medicaid, SCHIP has helped to reduce the number of uninsured low-income children by about one-third, falling from 23% in 1997 to 15% in 2004.3 To date, there is little conclusive evidence of “crowd out” (ie, few families dropped private coverage to enroll children in SCHIP). The State Children's Health Insurance Program has improved the likelihood that a child has a medical home.1,16 Aggregate data are difficult to assess owing to differences among state SCHIP programs, but individual programs have demonstrated improvements in access,1,17,18 quality of care,18 and reduction in ethnic disparities.18 A national study indicated improvements in several access measures following expansions under SCHIP.19 What challenges facing schip can affect child health care and pediatrics? SCHIP Reauthorization There is broad support for reauthorizing SCHIP, which is generally viewed as a successful program. However, the content and scope of a reauthorized SCHIP program are controversial—particularly regarding overall funding, eligibility criteria, and formulas for fund allocations and reallocations among states. Funding Many states already face shortfalls in SCHIP funds. If SCHIP is reauthorized at its current funding level, this would not be adequate to maintain current enrollment levels; more than a million children could lose coverage. In the coming years, it is estimated that more than $12 billion in additional federal funds over the next 5 years (and an additional $30 billion over 10 years) is needed to maintain current SCHIP enrollment levels.20,21 Eligibility There is controversy about whether SCHIP funds should be used only to cover low-income children or whether coverage should be expanded to parents of eligible children, higher-income children, pregnant women, and/or low-income childless adults. Formula for Allocation and Reallocation of Federal SCHIP Funds to States The formula for distribution of federal SCHIP funds across the states is controversial because of concerns about the quality of the data used to derive the formula, the fact that state allotments decrease as the number of low-income uninsured persons declines, and current rules that allow states to retain their allotments for 3 years regardless of current needs. Perhaps even more controversial are methods for reallocating unexpended SCHIP funds from states with surpluses to others facing shortfalls. The complex financing of SCHIP has led to uncertainties among states in predicting available SCHIP funds. Whereas states can all benefit from SCHIP and can pull together to maintain and enhance the program, the formula issue potentially divides states. Medicaid The success of SCHIP rests in part on its function of building on Medicaid by covering children who are ineligible for Medicaid. In this sense, many argue that continued SCHIP success depends on maintaining or strengthening Medicaid. However, a reauthorized SCHIP program will require additional funds to maintain current coverage, and it might be suggested that these funds come from cuts in Medicaid. Indeed, the success of SCHIP has raised questions about whether Medicaid should also have SCHIP-like features such as caps on funding, greater family cost sharing, and/or fewer mandatory benefits. Such measures might reduce costs while providing coverage. However, children with poor health status are more likely to be covered by Medicaid than SCHIP, and SCHIP's capacity to improve their health status may not match the more extensive Medicaid benefits. Also, cost sharing results in reduced use of essential health services, particularly for low-income families. Further, SCHIP has shown that “caps on federal Medicaid spending could leave more children without coverage and that the imprecision of any funding formulas would lead to poorly targeted distribution of funds for states.”7 Quality of Health Care Delivery Most states have reported on at least 1 of 4 quality measures for their SCHIP programs.22 However, inconsistencies in measurement and reporting remain, and these 4 measures are very limited in scope. Further, there is no required reporting for measures of inpatient care. In other areas of health (eg, Medicare), there is a growing impetus to report health care indices and assess the quality of care. Child health programs have been late to enter the quality-reporting and analysis arena in part because reliable and valid measures for children were lacking. However, progress has been made in the development of such measures. The reauthorization of SCHIP provides an opportunity to incorporate well-designed quality assessment in a model child health program. Millions of US Children Remain Uninsured Currently, according to the US census, 9 million US children do not have health insurance. Close to three-quarters of these children are eligible for Medicaid or SCHIP but are not enrolled.23 Thus, reducing the uninsured problem among US children hinges on enrolling more eligible children in both Medicaid and SCHIP. Expanding public coverage will require adequate federal funding in both programs and policy changes that address enrollment barriers.24-26 Back to top Article Information Correspondence: Dr Leona Cuttler, The Rainbow Center for Child Health Policy, Rainbow Babies and Children's Hospital, Case Western Reserve University, 11100 Euclid Ave, Room 737, Cleveland, OH 44106 (leona.cuttler@case.edu). Author Contributions:Study concept and design: Cuttler and Kenney. Acquisition of data: Cuttler. Drafting of the manuscript: Cuttler and Kenney. Critical revision of the manuscript for important intellectual content: Cuttler and Kenney. Study supervision: Cuttler. Financial Disclosure: None reported. Funding/Support: This work was supported in part by an award from the Robert Wood Johnson Foundation (Dr Cuttler) and the Rainbow Babies and Children's Hospital Board of Trustees (Dr Cuttler). Additional Contributions: We thank Justin Yee, BA, of the Urban Institute for providing helpful research assistance. References 1. Kenney GYee J SCHIP at a crossroads: experience to date and challenges ahead. Health Aff (Millwood) 2007;26 (2) 356- 369PubMedGoogle ScholarCrossref 2. Kenney GChang DI The State Children's Health Insurance Program: successes, shortcomings, and challenges. Health Aff 2004;23 (5) 51- 62PubMedGoogle ScholarCrossref 3. Kaiser Family Foundation, A decade of SCHIP experience and issues for reauthorization. http://www.kff.org/medicaid/upload/7574-2.pdfAccessed January 20, 2007 4. Kenney GCook A Coverage Patterns Among SCHIP-Eligible Children and Their Parents: Health Policy Online Brief 15. washington, dc Urban Institute2007; 5. Ross DCCox LMarks CKaiser Family Foundation, Resuming the path to health coverage for children and parents: a 50 state update on eligibility rules, enrollment and renewal procedures, and cost-sharing practices in Medicaid and SCHIP in 2006. http://www.kff.org/medicaid/upload/7608.pdfAccessed January 20, 2007 6. Herz EJFernandez BPeterson C State Children's Health Insurance Program (SCHIP): a brief overview. http://www.law.umaryland.edu/marshall/crsreports/crsdocuments/RL3047303232005.pdfAccessed July 20, 2006 7. 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Journal

Archives of Pediatrics & Adolescent MedicineAmerican Medical Association

Published: Jul 1, 2007

References