Long-awaited reauthorization of SCHIP: But is it too late?
Many state Medicaid programs had to put programs on hold to provide coverage to uninsured children, as a result of an impasse when Congress and President Bush could not agree on details of reauthorization of The State Children's Health Insurance Plan.
In addition, an Aug. 17, 2007, Centers for Medicare & Medicaid Services (CMS) informal policy memorandum imposed conditions on states and limited their options to provide coverage to uninsured children. This explicitly required states to put SCHIP coverage expansions on hold. The uncertainty about SCHIP reauthorization also put states in a precarious position from a budgetary perspective.
Now, those two obstacles are gone: In February 2009, the Children's Health Insurance Program Reauthorization Act (CHIPRA) of 2009 was signed into law, allowing states to cover children and families with income up to 300% of the federal poverty level (FPL). The legislation expands federal funding for children's coverage by $33 billion over the next four and a half years, and it is expected to cover 4.1 million children who otherwise would have been uninsured. In addition, states are allowed the option to expand coverage to legal immigrant children and pregnant women during their first five years in the country. In addition, the Aug. 17 CMS directive was withdrawn.
The SCHIP reauthorization gives states "some much-needed stability" in terms of funding levels for children's coverage, according to Jennifer Ryan, a principal policy analyst with the National Health Policy Forum.
"Now that the expansion in federal SCHIP funding is set, states can feel a bit more secure in moving forward with coverage expansions, that, by definition, always involve additional enrollment in Medicaid," she says. "This once again clears the path for states to pursue coverage expansions. It remains to be seen whether states will decide to go ahead with their plans, but the barriers that existed are no longer in place."
But is it too late for states?
Due to severe budget cuts, there is a worry that many states can't go through with their plans now that they finally have the "green light." "It is possible that, given the dire economic situations in the states, the coverage expansions that have long been planned and promoted by governors and state legislators alike will continue to be put on hold," says Ms. Ryan.
The increases to the Medicaid FMAP that are included in the economic stimulus package will help shore up the states' budgets, she says, but it's not yet known whether those infusions in federal funding will be enough to make states feel comfortable expanding coverage.
"The federal government will also have a role to play in encouraging states to take the necessary steps to access the new funding that is available," says Ms. Ryan.
In implementing CHIPRA, CMS has an opportunity to quickly develop policies and procedures that will help the states enhance their CHIP programs, she says, and to start reaching out to children who are currently eligible but unenrolled.
"There is certainly no impediment to moving forward," says Judy Solomon, a senior fellow at the Center on Budget and Policy Priorities specializing in Medicaid and SCHIP. "Both the reauthorization and the President's action in rescinding the directive take away any uncertainty about what the rules are for covering more children and for states to know that the funding is there and what they are going to get," she says.
The other issue, however, is the impact of the change on the economy, since states originally planned to expand children's coverage. "A lot of those expansions were done a couple of years ago when things looked a lot better," Ms. Solomon says. "It will depend on each state's circumstance. But I don't think any state is going to go backwards."
If states do cut back on Medicaid eligibility, they would not receive the temporary increase in FMAP dollars. "It's also important to note that the maintenance of efforts also covers changes in methods and procedures used to determine eligibility," says Ms. Solomon.
Bonuses for simplifying enrollment
The CHIPRA bill also includes incentives. States could qualify for bonus payments if they implement five out of eight simplification measures and show an increase in the number of children actually enrolled in Medicaid.
"So, there are incentives to enroll more children, and I think that is going to happen anyway because of the worsening economy," says Ms. Solomon. "What is not clear to me is whether states are going to expand on what they are doing now, at least over the next year or so. Or maybe they can't do it this year, but they will when things get better."
It's good news that the reauthorization is for a long-enough period of time, 4½ years, says Ms. Solomon, who also points to new options for simpler documentation of citizenship, and an "express-lane" option that allows states to borrow findings of other agencies for verification of income.
"There are a lot of things in this legislation that are going to be helpful to states," she reports. "Obviously, we would be looking at an even rosier picture if we didn't have the economic downturn. But I think all things considered, there have been a lot of good policy changes in the past two months."
According to a January 2009 50-state survey done by the Kaiser Family Foundation, Challenges of Providing Health Coverage for Children and Parents in a Recession, although 10 states did things that would restrict access to health coverage for low-income children, pregnant women, and parents in 2008, one-third of states took actions to increase access, either by eligibility expansions or other kinds of simplification measures to make it easier for kids to enroll.
"Now, I think it's a mixed bag: A number of states either did move forward or are moving forward now" with expanding coverage, says Ms. Solomon. "There are a few states where their plans have remained stalled."
Efforts were blocked
At least one of those states is now able to move forward with its long-awaited plans. Oklahoma's "All Kids Act," signed by Gov. Brad Henry in 2007, directed that the state offer access to affordable health coverage for children in families that have income up to 300% of the FPL.
However, Mike Fogarty, CEO of the Oklahoma Health Care Authority, says the state's efforts to implement the directive have been blocked by the uncertainty of continued SCHIP federal funding and the provisions of the CMS memorandum.
Along with the rescinded CMS memo, the SCHIP reauthorization is "very welcome news in Oklahoma," he says. "It clears the way for us to further reduce the number of uninsured children in our state. Providing access to affordable health coverage for children has become one of Oklahoma's highest priorities."
Now, the planned expansion program can go forward, funded in part by an existing dedicated tax on tobacco products. "Coverage will be available through the Insure Oklahoma program," says Mr. Fogarty. "It will include premium assistance for commercial group coverage and through our public individual product."
SCHIP 'good news'
The SCHIP reauthorization bill is "good news for Kentucky," says Department of Medicaid Services commissioner Elizabeth Johnson. "The federal reauthorization is in line with Kentucky Gov. Steve Beshear's plan to provide health insurance coverage to all eligible children," she says. The plan is focused on identifying eligible children not enrolled in KCHIP (the state's SCHIP program), enrolling those children, and retaining them.
There is no immediate impact to the state, as Kentucky's KCHIP currently provides coverage to children whose family income is below 200% of the FPL.
The reauthorization bill allows states to receive outreach and enrollment grants if the state has five enrollment and retention measures in place. These outreach and enrollment grants are intended to incentivize states to streamline and simplify outreach and enrollment, which Kentucky has already begun under Gov. Beshear's plan, adds Ms. Johnson.
"Kentucky already has three of the enrollment and retention measures in place, so we would only have to implement two additional measures," she says
Contact Mr. Fogarty at (405) 522-7300 or [email protected], Ms. Johnson at (502) 564-4321 or [email protected], and Ms. Ryan at (202) 872-3974 or [email protected].
Many state Medicaid programs had to put programs on hold to provide coverage to uninsured children, as a result of an impasse when Congress and President Bush could not agree on details of reauthorization of The State Children's Health Insurance Plan.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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