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EXECUTIVE SUMMARY

BACKGROUND

Congress mandated in the Balanced Budget Refinement Act of 1999 (BBRA) that the Secretary of the U.S. Department of Health and Human Services conduct an independent comprehensive study of the State Children's Health Insurance Program (SCHIP). The evaluation was funded through the $10 million appropriation in the BBRA. An interim report was sent to Congress in 2003 that summarized states' SCHIP designs and their early experiences with program implementation (Wooldridge et al. 2003). This final report presents findings from the congressionally mandated evaluation funded by the Office of the Assistant Secretary for Planning and Evaluation (ASPE). The study focused mainly on SCHIP programs in California, Colorado, Florida, Illinois, Louisiana, Missouri, New Jersey, New York, North Carolina, and Texas. The evaluation drew on case studies and surveys of SCHIP enrollees and recent disenrollees in the 10 states. In addition, nationwide perspectives on SCHIP implementation and uninsured children's access to care were provided by two national surveys—a survey of state SCHIP administrators, conducted as part of the evaluation, and a survey of low-income, uninsured families, separately funded by ASPE in support of the evaluation.¹

Program Design. SCHIP was created by the Balanced Budget Act (BBA) of 1997. To encourage states to implement a SCHIP program, the federal matching rate was enhanced relative to Medicaid. The BBA allowed states to cover children in families with incomes up to 200 percent of the federal poverty level and beyond. It also gave states considerable flexibility in designing their programs. States could introduce a separate program, expand Medicaid, or do both. Separate programs could deviate from Medicaid in several respects. They could have a different benefits package, though benefits package designs were restricted to several "benchmark" plan options. Separate programs could include cost sharing for families of enrollees, including up-front fees to enroll, monthly premiums and deductibles, and copayments for services. They could also impose a waiting period on families who dropped their children's private coverage to discourage families from substituting SCHIP for employer-based coverage. By law, Medicaid expansion programs under SCHIP were subject to all the requirements of Medicaid, except when using Section 1115 demonstration waiver authority. Thus, states that chose the Medicaid expansion model could not use a different benefits package for their SCHIP enrollees, employ cost sharing, or impose waiting periods. To improve continuity of care, all programs could offer continuous coverage up to 12 months.

Study Design. The BBRA specified the issues the evaluation was to investigate, as well as some of the methods to be used. Congress stipulated that the evaluation include 10 states with varied geographical and urban/rural representation, diverse approaches to program design, and a large proportion of the low-income, uninsured children in the United States. It also stipulated that the evaluation should survey SCHIP enrollees and disenrollees and children eligible for, but not enrolled in, SCHIP. The 10 states were drawn from the four census regions, adopted diverse program designs, and included 56 percent of uninsured children with families below 200 percent of the federal poverty level in 1997, when SCHIP began. (See Table 1.) These states included 62 percent of the children who were enrolled in SCHIP at any time during fiscal 2002.

Notes from this section of the report

1. Mathematica Policy Research, Inc. and its partners—The Urban Institute and the MayaTech Corporation—conducted the evaluation under contract to ASPE.

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