The SCHIP Football

If ever a government program was a political football on the gridiron of partisan politics, it’s the State Children’s Health Insurance Program (SCHIP — pronounced S-CHIP).

Unfortunately, the football’s unpredictable bounces have the potential to place a hardship on some families that rely on SCHIP to help pay medical bills for their children.

Created by Congress in 1997, SCHIP was intended to provide health insurance for children of families who earn too much to qualify for Medicaid but can’t afford to buy private health insurance.

The program has been an important source of health care for many families served by MDA, notes Annie Kennedy, MDA’s vice president for advocacy. She adds that if the program is not adequately funded or is canceled in the future, it will result in “the loss of critical medical supports and SCHIP-provided care for thousands of people with neuromuscular disorders.”

At the end of 2007, President Bush signed legislation that gives a temporary respite — until March of 2009 — from SCHIP-related hardships for all those currently enrolled in the program.

The rules of the game

States are each allocated a certain amount of federal funds to help run their SCHIP programs, and also must contribute lesser amounts of their own. Some states charge SCHIP enrollees nominal amounts to participate.

In most states, SCHIP programs are called just that, but variations include BadgerCare, Cubcare, Hoosier Healthwise, Peach Care for Kids, Denali KidCare and the HUSKY program.

SCHIP health care benefits for children can include a range of possible services, from doctors’ exams to inoculations, medication and emergency room care; however, each state may offer a combination of whatever services it wishes.

States have differing cut-off levels for family income. In some states, families with incomes up to 150 percent of the Federal Poverty Guideline (FPG) qualify for SCHIP. (In 2007, the FPG in the 48 contiguous states was $20,650 for a family of four; 150 percent of that is $30,975.) Other states have set the maximum income at 200 and even 350 percent of the FPG, well into the middle-class range.

In addition, some states have expanded their SCHIP policies to cover people other than children, such as pregnant women and adults with illnesses and disabilities.

Arguments on the field

The year 2007 held critical significance for SCHIP, because the program was endowed with only a 10-year life span and funding. It lapsed in September and Congress authorized short-term extensions to keep the program temporarily afloat.

On Dec. 29, the president approved a longer-term extension that provides enough funding to maintain each state’s current SCHIP enrollment numbers until spring of 2009.

An extension is not to be confused with a reauthorization of SCHIP. When reauthorizing viable federal programs, Congress comes up with adjusted language and a funding source, forges new legislation, debates it, compromises and sends the final product to the president for signing.

SCHIP’s reauthorization process has been played on a muddy field. Democrats (and some Republicans) argued that SCHIP needed dramatically increased funding because some nine million children in the country still didn’t have health insurance. Republicans (and some Democrats) countered that the nine million figure was wildly inflated, and far less additional funding was needed to adequately run the program.

One bipartisan faction said adults shouldn’t be eligible for SCHIP participation and that poor children have been excluded as a consequence. Another bipartisan group said any SCHIP reauthorization should include safeguards to prevent illegal immigrants from obtaining coverage.

Both the Senate and House eventually came up with (hotly contested) legislation to reauthorize the program, but when the bills reached President Bush he vetoed them, and supporters were unable to muster enough votes to override the vetoes.

President Bush said he was in favor of increasing SCHIP funding, but not to the extent called for in the legislation, some $35 billion over the next five years. Bush challenged the inclusion in SCHIP programs of middle- and upper-middle-class families, equating it with socialized medicine, and said he couldn’t support the tax increase (in one instance, a suggested additional tax of 61 cents on a pack of cigarettes) proposed to fund the expansion.

Laura Weidner, government affairs associate and SCHIP specialist for the Child Welfare League of America, based in Washington, D.C., said it seemed that different “sticking points” within Congress and with the administration seemed to crop up almost daily.

“It turned into a continuous spawn of arguments,” she said.

Keeping the ball moving

In the face of this situation, some states and children’s groups called on politicians to give up, at least for the short term, trying to fully reauthorize SCHIP, and instead obtain more short-term extensions of the program. Basically, that’s what has occurred with Bush’s extension.

The extension makes available enough money for states to continue operating their SCHIP programs at their present levels of enrollment until March 2009.

If some people leave the SCHIP program during that time, state enrollment numbers can be maintained by adding new people.

For some states, the extension will mean a temporary increase in SCHIP funds, as they were in the dire situation of having more enrollees and/or operating costs than money to cover them.

Enrollment and/or operating costs have outpaced funding in 21 states: Alaska, Arkansas, California, Georgia, Illinois, Iowa, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island and South Dakota.

Had SCHIP funding levels been kept the same or only slightly increased, some enrollees in these states would have lost health insurance coverage. Higher-income families and adults likely would have been the first ones to be ejected from the game.

Time out … maybe

Everybody can keep playing — for now.

Two states that could stand to lose enrollees without a serious funding increase once the extension expires are:

• New Jersey: Its Family Care program enrolls children of families who make up to 350 percent of the FPG ($72,275). Parents who earn up to 133 percent of FPG ($27,465) also can enroll. Suzanne Esterman, spokeswoman for the New Jersey Department of Human Services, said the state has nearly 200,000 people in the program and is currently spending about $480 million annually in combined funding for their care.
  
  
• California: The state has more than a million people enrolled in SCHIP-funded programs (800,000-plus children in the Healthy Families program, and another 250,000 kids and 8,000 pregnant mothers in Medi-Cal). In 2006, the state spent more than $1.7 billion on SCHIP programs, and even with some excess funds left over, the state figures it will require $1.2 billion to operate in 2008.

On the other hand, two states in fine financial fettle at current funding levels are:

• Colorado: In 2006, the state spent about $93 million to cover 54,000-plus people in its Child Health Plan Plus (CHP+) program. CHP+ enrolls families earning up to 200 percent of the FPG ($41,300), as well as eligible pregnant women. In mid-2006, the state had about $102 million remaining in federal funds from previous years. CHP+ Public Information Officer Joanne Lindsay said because of the extra bankroll, it’s unlikely the program will run short of money or have to eliminate participants. The extension gives Colorado an additional comfort margin.
  
  
• Florida: Gail Hansen, administrator for the MediKids program, one of three SCHIP components in Florida, said the prognosis there is similar to Colorado’s. In 2006, Florida had a whopping $449 million in left-over SCHIP funds (largely because in 2003 and 2004 the state dropped 130,000 children from coverage). It foresees no difficulty in continuing to cover its approximately 229,000 enrollees at current federal funding levels. Florida spends about $300 million for participants’ care, accepting families with incomes up to 200 percent of the FPG — $41,300 — but providing no coverage for adults.

And the final score is ...

People in nearly half of the states in the union would have stood to feel the economic ax if federal funding for SCHIP hadn’t been extended until 2009. And they still could, a year or so down the road, depending on what Congress and a new president decide to do with the program.

To find out more about SCHIP in your state, visit www.cms.hhs.gov/LowCostHealthInsFamChild/ and select the State SCHIP Directors document. Alternately, check the telephone directory for your state’s health department phone number. Those departments operate the SCHIP programs in most states.

At www.cms.hhs.gov/home/schip.asp, CMS also has descriptions of SCHIP program elements.

Quest readers interested in the SCHIP controversy are encouraged to write their elected representatives to relate their own experiences with SCHIP, and what they think needs to be done.

SCHIP is likely to be a health-care football throughout the 2008 presidential election. That ball has been punted by the president’s extension, and will probably remain aloft for another year, but the SCHIP game isn’t over … and some of the most important players are about to change.