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POLICY: While Politicians Battle Over Expanding SCHIP, Children Are Dropped From the Program by Maggie Mahar

At the moment, nearly everyone interested in the S-CHIP debate is focusing on October 18,  the
day the US House of Representatives will try to override the President’s veto of an expanded State Children’s Health Insurance Program (SCHIP).

Unlike many of the critics, I favor the expanded program.  Briefly, here are a few things to
keep in mind: 

First, under the proposal, 70%  to 80% of children in the program would be from
families earning less than twice the poverty level ($20,650 for a family
of four).   

Granted families
of four earning  up to $60,000 a year would qualify for the program
in most states. But given the fact that the average annual premium for
family coverage is now pushing $13,000, it is not at all unreasonable
to suggest that families earning $$60,000 before taxes cannot
afford private insurance.

In theory,
maybe these families could buy private insurance just for their children,
but it’s hard enough to buy individual coverage (when you don’t
belong to a group) –try finding individual insurance that covers
children only.

As for the
notion that families who now have coverage from their employer will
take their children off private insurance and put them on SCHIP—this
ignores the fact that when you have coverage in your workplace, the
additional amount that you pay for your children is quite small. Insuring
kids is cheap. So many people would probably keep their kids on their
employers’ insurance and avoid the administrative hassles of enrolling
in S-CHIP. 

Finally, critics
of the expansion point out that New York State want to expand coverage
to families earning up to $82,000 a year (but only if the Health and
Human Services Department approves a waiver). To someone living in Mississippi
$82,000 no doubt sounds like a handsome sum. But anyone living in the
greater NYC area knows how hard it is to house, feed and clothe a family
of four on $82,000—before paying federal, state and NYC taxes. Moreover,
SCHIP is not free. Families must pay co-premiums.   

       
With these facts in mind, I hope the House can override the President’s
veto. 

    
But even if it the veto stands, this does not mean that Congress has
to give up on insuring poor children. Below, an excerpt from I piece
that I wrote for The Guardian’s “Comment is Free.” It was published on
September 27, and focuses on how easy it is to bump children from SCHIP
and Medicaid. If we can’t expand Schip, at least we should do everything
we can to keep kids who are already in these programs enrolled. 

In July, Health
Affairs published an article explaining "Why millions
of children eligible for Medicaid and S-Chip are uninsured"
.    The author, Benjamin
Sommers, a resident in internal medicine and primary care at Brigham
and Women’s Hospital in Boston also has a Ph.D. in health policy, and
has published widely in medical journals.

Sommers estimates
that, in 2005, 74% of all uninsured children were eligible for public
coverage, but were not enrolled. Many people assume that this is because
parents didn’t know about the programs, or just didn’t bother to sign
up. But the truth is that even if you enroll, it’s easy to be dropped
from the program.

"If families
do not complete the eligibility renewal process, which occurs once or
twice annually depending on the state, then their children ‘disenroll’
– a loss of coverage that is often completely unintentional," Sommers
explains.

The study found
that 34.1% of children insured under Medicaid or S-Chip lost their coverage
by the following year, despite remaining eligible. During that time,
"states took steps that intentionally or unintentionally exacerbated
dropout", Sommers reports. 

For one, "the
majority of states have established separate S-Chip programs rather
than using S-Chip funds to expand their existing Medicaid programs.
… Running a separate program – a more complex administrative structure
– has been linked to significantly higher dropout rates. Furthermore,
several states have responded to budget difficulties by making the renewal
process more cumbersome or by increasing S-Chip premiums, both of which
may exacerbate dropout."

The trend is
likely to accelerate, Sommers says, because of a 2006 federal regulation
requiring increased citizenship documentation for Medicaid renewal.

The solution?
Simplify the renewal process, requiring renewal only once a year, and
use the same application forms for both S-Chip and Medicaid. Another
option is "passive enrollment, in which families are required to
submit paperwork only if their circumstances have greatly changed in
the previous year. Otherwise, children are assumed to still be eligible
as long as parents continue paying premiums. A similar approach for
children in Medicaid is to send preprinted forms completed with the
prior year’s information, which parents can simply sign and return,
as long as their circumstances have remained the same."

While the expansion of S-Chip to include even more children may not be possible, given Bush’s
intransigence, legislators should not give up on the issue. Helping
those who are already eligible from being stripped of coverage would
be a good place to start.

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PeterMaggie Mahareric NovackPjBarry Carol Recent comment authors
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Peter
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Peter

“Peter- not in favor of the bill” Thought so. So the funding issue is just your red herring for outright opposition. “I think some kind of support for those with the fewest reources–” Define “fewest” “reduced regulation” What government regulations prevent families from affording healthcare for their children? “more insurance options” From who, the insurance industry? Where are they? “tax code changes… would be beneficial for us all.” Ah yes tax changes, code for tax reduction, funny how that always comes up to solve problems. Yes that would be beneficial to “us all” or to “me all”? Maybe you could… Read more »

eric Novack
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eric Novack

Peter- not in favor of the bill– point is, it cannot be ‘adequatey funded’… and be passable by either party in Congress.
I think some kind of support for those with the fewest reources– reduced regulation, more insurance options, tax code changes… would be beneficial for us all.

Peter
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Peter

Good reasoned answers Maggie despite the grenade launching by Eric. Eric, it still sounds like you are FOR the new SCHIP bill but against it being inadequately funded. Is this correct? Tell us how you see it funded. Liz, I’m not surprized at your story. I have found that disability insurance in the private sector is also largely worthless. Insurance companies may pay for about a year then cut you off arbitrarily and drive you into the financial ground to make you go away. Time is always on their side. Your story is another example of what I have been… Read more »

eric Novack
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eric Novack

Maggie- thank you for your forthright response… that said— your response implies that the ends justifies the means. If democrats are ‘pro-child health’, why would they ‘muddy the waters’ with vague pork that even Pete Stark cannot defend? Are you side-stepping the question of the lack of honesty about budgeting for the expansion? Your response to me suggests your next THCB piece should be an expose on the ACTUAL cost of the passed (yet vetoed) bill over the next 10-20 years— with the justification that all that spending ought to prevent more spending at some point in the future… Accepting… Read more »

Barry Carol
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Barry Carol

Maggie, I appreciate the data about both the cost of living in upstate NY and the cost of health insurance under NY’s community rating system. I certainly agree that family coverage is basically unaffordable in NY for all but the upper middle class and the wealthy. It also highlights what a poor perceived value health insurance is for young, healthy people under a community rating approach, but any system will have both winners and losers. The real source of my frustration, not just with respect to the SCHIP debate, but in trying to get to universal coverage generally is the… Read more »

Maggie Mahar
Guest
Maggie Mahar

Eric & Barry– Eric– I hate to disappoint you, but your questoins don’t admit to yes or no answers. First the “pork” in the bill (favoring certain hospitals) has aboslutely nothing to do with SCHIP or SCHIP payments. This provision affects how much these hospitals will be paid for Medicare patients, and was tucked into the SCHIP bill in hopes that it might pass through unnoticed. Since there has probably never been a spending bill in the history of Congress that hasn’t contained some pork (often unrelated to the main bill), this really doesn’t have anything to do with the… Read more »

eric Novack
Guest
eric Novack

Maggie-
1. should the bill include the hundreds of millions for ‘favored’ hospitals by pretending they exist in locations they don’t? (see NY Times– http://www.nytimes.com/2007/08/12/washington/12health.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1187007504-taEXH3Pp0kQ5dhe5iqdRUA) ?
2. Is it ‘fair’ to the taxpayers and their children (who will be paying the deficits) to promote legislation that is intentionally inadequately funded (http://www.highlighthealth.com/wp-content/uploads/2007/08/schip_spending.gif) ?
in the end, your answer needs to be ‘yes’ or ‘no’…

Pj
Guest

I do not see the bill having the support for the override.

Pj
Guest

I do not see the bill having the support for the override.

Barry Carol
Guest
Barry Carol

With respect to the issue of S-CHIP crowding out private insurance, I don’t think parents will ask to shift their kids from employer coverage to taxpayer coverage for the reason you cited. My understanding, however, is that Medicaid’s spending per child is approximately $1,400-$1,500 per year which is not nothing. I think that, at the margin, employers would have an incentive to redesign their health insurance offering to cover adults only if they knew that children could be covered at taxpayer expense below, say, $80,000 of income. Higher income employees could be required to pay the full cost of covering… Read more »