Medicaid and SCHIP Participation Rates

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Abstract

In August 2007, the Centers for Medicare and Medicaid Services (CMS) issued a directive requiring that states reach participation rates of 95 percent among children in families with income below 200 percent of the federal poverty line in Medicaid and the State Children’s Health Insurance Program (SCHIP) before using SCHIP funds to cover higher-income children. In this brief, Genevieve Kenney shows that there are serious methodological challenges involved with obtaining valid and policy-relevant state-level participation rate estimates. Kenney also reviews recent trends in Medicaid and SCHIP participation rates and comments on participation estimates just released by CMS.

Introduction

In August 2007, the Centers for Medicare and Medicaid Services (CMS) issued a new directive that required, among other things, that states achieve public health insurance participation rates of 95 percent among children living in families with income under 200 percent of federal poverty level (FPL) as a prerequisite for using State Children’s Health Insurance Program (SCHIP) funds to cover children with family incomes above 250 percent of the FPL (Smith 2007). This brief provides background on Medicaid and SCHIP participation rates, discusses methodological issues related to measuring participation at the state level, and assesses recent statistics released by CMS. It shows that achieving 95 percent participation will be very difficult under current program rules and financing levels and indicates that there are serious methodological challenges associated with obtaining valid state-level participation rate estimates given the currently available data. Finally, it also shows, that while there is ambiguity about how CMS will be defining participation rates, the state-level estimates recently released by CMS are lacking in face validity and are methodologically flawed.

In an effort to reduce uninsured rates among low-income children, unprecedented outreach and enrollment simplification efforts were made following the 1997 enactment of SCHIP (Dubay et al. 2007; Kenney and Chang 2004)¹. As a consequence, participation in public health insurance programs increased among children since the late 1990s, reaching over 75 percent overall and over 80 percent in Medicaid (Hudson and Selden 2007; Dubay et al. 2007)². Despite this progress, the national participation rate in Medicaid and SCHIP falls short of the 95 percent threshold³. Participation rates in public health insurance programs are below 100 percent, not because people are not interested in enrolling in them—in fact, research consistently shows a very high willingness to enroll uninsured children in Medicaid and SCHIP—but because of knowledge gaps and administrative barriers to enrollment and retention (Haley and Kenney 2007; Kenney, Haley, and Tebay 2003, 2004; Sommers 2005). Moreover, programs that have achieved substantially higher participation are ones that use automatic or default enrollment strategies, which are not currently available to Medicaid and SCHIP programs (Dorn forthcoming; Dorn and Kenney 2006).

In addition, a number of federal policies present obstacles to participation (for example, the citizen documentation and identity requirements in the 2005 Deficit Reduction Act have made it more costly and time consuming to enroll in Medicaid). A number of federal policy changes are being proposed as part of SCHIP reauthorization that would provide states with new tools and sufficient federal resources to achieve higher participation among the low-income children who are eligible for Medicaid and SCHIP coverage but not yet enrolled (Congressional Research Service [CRS] 2007; Center for Children and Families [CCF] 2007a, b). Without those changes, very few states are likely to achieve participation rates close to 95 percent.

¹ States introduced numerous simplifications to their enrollment and renewal processes and invested in both mass media and community-based outreach.
² The increases in Medicaid and SCHIP participation, in turn, contributed to declines in uninsured rates among children, particularly among those in low-income families, at a time when uninsured rates were rising for adults (CBO 2007; Kenney and Yee 2007).
³ This is not surprising given past experience in other means-tested government programs like Food Stamps and WIC, which have had even lower participation rates compared to public health insurance programs (U.S. GAO 2005).

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The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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