Citation URL: http://www.urban.org/AmyWestpfahlLutzky

SCHIP lets states subsidize employer premiums for low-income children and, in some cases, their parents. Many states viewed the federal requirements for premium assistance programs to be administratively complex. Consequently, few states have implemented premium assistance programs under SCHIP. This study of Massachusetts, Mississippi, and Wisconsin examines the development and implementation of premium assistance programs under SCHIP. Findings suggest several limitations and challenges: States are faced with the new challenge of augmenting broader outreach campaigns with specific efforts to target employers and working families; the enrollment process is complex and time-consuming, particularly investigating employer benefit packages and comparing it to the SCHIP benchmark; and enrollment in these programs is relatively small, in part due to federal SCHIP eligibility criteria.

This analysis of the SCHIP and Medicaid application processes in 8 states finds that states have implemented similar strategies for simplifying SCHIP enrollment, but simplifications to Medicaid are less extensive. Inconsistencies between SCHIP and Medicaid eligibility requirements and procedures can make the enrollment process confusing for families. While less than 50 percent of applications were approved for SCHIP in many states, a large proportion appeared eligible for Medicaid and were referred to that program. Large proportions of SCHIP applications are denied for procedural reasons. SCHIP programs ask families about existing health insurance coverage, but only a small proportion already have insurance. State data systems cannot precisely report on the outcomes of the eligibility process.

This analysis of the SCHIP and Medicaid eligibility redetermination processes in 8 states finds that redetermination processes have not been simplified to the same extent as initial enrollment processes. Less than 50 percent of children appeared to retain SCHIP eligibility at redetermination. Between 10 and 40 percent of children were "lost" at redetermination because their parents never responded to renewal notices or submitted renewal applications. Failure to pay premiums may reflect several possible outcomes besides affordability. State data systems are unable to report precisely on the outcomes of the eligibility redetermination process.

[© Health Affairs] This cross-state analysis of 13 states found that states generally did not reduce or freeze payments to health care providers, limit efforts to promote enrollment in public health insurance programs, or cut benefits in response to the economic downturn. The states generally did not reduce eligibility in their Medicaid and SCHIP programs. Even if states continue to face budget pressures, eligibility cuts are unlikely because of the loss in federal matching funds that would result, minimum federal standards for eligibility, and the political strength of providers and beneficiaries. The researchers caution that the funding pressures on SCHIP and Medicaid -- rising healthcare costs and lower savings from managed care -- are long-term problems that are likely to continue even after the economy rebounds.

The past five years have given states new opportunities in health policy for low-income people, with many changes increasing states' flexibility. However, new pressures on state policy also have arisen from a variety of factors, most recently from the economic downturn that has reduced revenues and increased demand for spending. This paper analyzes recent changes in health policy in the thirteen states that are the core of the Urban Institute's Assessing the New Federalism project, focusing on state fiscal conditions, health care coverage, acute care, and long-term care. The paper concludes that the economic slowdown places severe pressure on state health policy but that these pressures will not end with the recession. Many problems are long term in nature – rising drug expenditures, the erosion of managed care's impact, quality of nursing home care and workforce shortage issues. These will all affect Medicaid spending and make it difficult for states to continue expanding coverage. (Health Affairs Web Exclusive 2002 May: 187-218)

Based on site visit interviews with state officials, consumers, providers, and reviews of public documents and web sites, this report summarizes what happened to health care policy over the last few years in each of the following states: Alabama, California, Colorado, Florida, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Texas, Washington, and Wisconsin. Among some of the general patterns found: Medicaid rolls dropped between 1995 and 1998 because of the improved economy and welfare reform, but have increased in more recent years. Welfare reform also allowed states to expand Medicaid eligibility to families with much higher incomes than previously. States responded to the enactment of SCHIP in 1997 by expanding coverage for children in families with relatively high incomes.

Since 1997, California expanded public health insurance coverage and increased provider and health plan payments in a fiscally responsible way. The state enacted moderate Medi-Cal expansions for adults, significantly expanded children's coverage through the Healthy Families program, and is planning to expand Healthy Families further to include parents. California addressed consumer concerns about managed care through the creation of the Department of Managed Health Care, where consumers can go for assistance in dealing with their health plan. California decreased fragmentation in long-term care programs and improved quality of services through the establishment of the Long-Term Care Council. The state also achieved wage increases for nursing home staff and home health workers, and reduced patient-to-nurse staffing ratios in nursing homes.

During the late 1990s, New York began to address the state's large and growing uninsured population. The state expanded coverage to children through the Child Health Plus program and Medicaid expansions. More recently, New York expanded coverage to adults through the Family Health Plus and Healthy New York programs. New York has been phasing in enrollment of over two million Medicaid recipients into managed care on a mandatory basis. As of May 2001, approximately 34 percent of those eligible for Medicaid managed care were enrolled. Implementation of mandatory managed care has moved more slowly than anticipated for several reasons. These include: sensitivity around past marketing abuses in New York City, the exit of several Medicaid managed care plans, and lack of support from hospitals-related to plans' and hospitals' perception that the Medicaid capitation rates are too low. New York is faced with the important challenge of enrolling and retaining eligible populations in the new insurance coverage programs. Rising Medicaid expenditures, the current recessionary environment, and the impact of the September 11th attacks on the World Trade Center are likely to complicate this challenge.

Under the Medicaid Demonstration Project for Los Angeles, Los Angeles County agreed to fundamentally restructure its Department of Health Services (LACDHS) and its approach to delivering indigent care in return for federal funds. LACDHS attempted to reduce its traditional emphasis on emergency room and inpatient care by building an integrated system of communitybased primary, specialty, and preventive care. As part of the Centers for Medicare and Medicaid Services (CMS) evaluation of this waiver, the Urban Institute conducted site visits in 1997 and 2001. This report is based on findings from both of these site visits.

This analysis of Denver, Houston, and Los Angeles finds that the degree to which financial and organizational flexibility and managerial agility can be combined with a mission of public service under the constraints of public financing appears to be key to a successful ambulatory care safety net. An ability to strictly define the eligible population and to enforce eligibility standards also strongly influences success. The assets of the Denver system include strong leadership, the integration of ambulatory care with inpatient and specialty care, strong local financial and political support, and a geographically limited service area. Los Angeles has some of the assets of the Denver system, but is currently in a state of transition. Houston has fewer assets but has an opportunity for change under its new system leadership.

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