Consequences of States' policies for SCHIP disenrollment - State Children's Health Insurance Program - Statistical Data Included

Health Care Financing Review,  Spring, 2002  by Andrew W. Dick,  R. Andrew Allison,  Susan G. Haber,  Cindy Brach,  Elizabeth Shenkman

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INTRODUCTION

Congress' primary aim when it passed the Balanced Budget Act of 1997 (Public Law 105-33) was to increase the number of low-income children who had health insurance that were not eligible for Medicaid. Like Medicaid, SCHIP is a Federal and State program, but SCHIP affords States more discretion in the design and implementation of their programs. Among the decisions States have had to make is whether to run a separate freestanding SCHIP program, an expansion of their Medicaid programs, or a combination of the two approaches (Rosenbaum et al., 1998). Medicaid expansions establish an entitlement for eligible children for whom they must provide certain benefits, including Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) services, while separate freestanding programs allow the State more freedom to enact policies that would only be permitted to a Medicaid expansion program under a waiver from the Federal Government. Combination programs allow States to establish an entitlement for certain age or income groups, while maintaining flexibility to implement policy innovations and caseload limits for other groups. Fifteen States and the District of Columbia have created Medicaid expansion programs, 16 have separate freestanding SCHIP programs, and 19 have combination programs (U.S. General Accounting Office, 2001). (1)

Having made the initial decisions regarding their SCHIP program structures and policies, the States' next major challenge has been to enroll children into the program. To do so, they launched multi-prong campaigns using advertising and creative outreach methods to get the word out to families potentially eligible for SCHIP (Mickey, 1999; National Conference of State Legislators, 1999; Perry et al., 2000; Schwalberg et al., 1999; U.S. General Accounting Office, 2000). In addition, the Federal Government, national organizations, foundations, and even corporations have been active in increasing public awareness of SCHIP (Edmunds, Teitelbaum, and Gleason, 2000). Efforts have also been made to streamline the enrollment process by simplifying applications and eliminating requirements (Mickey, 1999; National Conference of State Legislators, 1999; Rosenbach et al., 2001; Ross and Cox, 2000; Schwalberg et al., 1999). As a result of these concerted efforts, 2 million children participated in SCHIP sometime during Federal fiscal year (FFY) 1999, 3.3 million during FFY 2000 and 4.6 million during FFY 2001 (Health Care Financing Administration, 2000).

Attention is now shifting to retention of those children already enrolled in SCHIP (Bachrach and Tassi, 2000; Pernice et al., 2002; Klein, 2001; Rosenbach et al., 2001). Aggregate numbers show that disenrollment in SCHIP is substantial. While 1.96 million different children were enrolled in SCHIP at some time during FFY 1999, only 1.61 million different children were enrolled during the fourth quarter of FFY 1999, indicating a high turnover rate (Rosenbach et al., 2001). Thus, a minimum of 18 percent of children enrolled at some time during FFY 1999 had a disenrollment. In some cases, States' successes in enrolling children into SCHIP have been substantially eroded by disenrollments (Allison, LaClair, and St. Peter, 2001b; Bachrach and Tassi, 2000). As findings from the 1999 National Survey of America's Families (NSAF) demonstrate, the number of uninsured children could be reduced, perhaps by 10 percent, if children who enrolled in SCHIP or Medicaid remained enrolled (Kenney and Haley, 2001).

The phenomenon of disenrollment from public children's insurance programs is not new. Children are frequently enrolled in Medicaid for only a short period of time (Carrasquillo et al., 1998; Czajka, 1999; Ellwood, 1999). For example, in 1991 only 38 percent of new Medicaid enrollees remained on Medicaid a year later (Carrasquillo et al., 1998). Medicaid disenrollees also frequently return to the program after a brief gap in coverage. For example, in FFY 1993 and 1994 one of every five enrollments into the Medicaid program were by children who had been previously enrolled in Medicaid that year but had subsequently disenrolled (Czajka, 1999).

In order to provide some stability of coverage, 31 States have instituted a policy of continuous eligibility in SCHIP (4 for 6 months, 26 for 12 months, and 1 for up to 24 months [(National Conference of State Legislatures, 2000b]). This was designed to reduce the number of short enrollments by disregarding income variations during the defined period of continuous eligibility. As enrollees come up for recertification at the end of the continuous eligibility period, however, States are finding that a large proportion of children are not re-enrolling (Bachrach and Tassi, 2000; Hill, 2001; Holmes, 2001). Furthermore, there have been indications that children are disenrolled from the program before their period of continuous eligibility expires (Allison, LaClair and St. Peter, 2001a; Cooper, 2001).

STUDY QUESTIONS

Although there is growing concern about SCHIP disenrollments, few data exist about the extent of disenrollment and re-enrollments, the variation across States, and the degree to which State policies may affect enrollment patterns of covered individuals. In order to fill in this gap in the literature we begin our analyses by describing two basic features of enrollment in separate freestanding SCHIP programs: (1) how long children enrolled in SCHIP are likely to remain enrolled, and (2) whether children who disenroll from SCHIP are likely to re-enroll at a later time. We next ask whether particular State policies affect those patterns. Specifically, we address five questions regarding the impact of different State policies: