Health & Human Services

Can Schip Stay Afloat?

By touting its success, advocates hope to spare the children's health insurance program from the budget ax.
by | January 2003
 

When SCHIP turned five years old this fall, the celebrations were joyous. Here was a federal-state partnership--the State Child Health Insurance Program--that could boast of bottom-line success: The uninsurance rate for near-poor children--the focus of SCHIP--had declined from more than 23 percent to less than 18 percent.

In states that have been particularly aggressive with their programs, the tales are even more triumphant. Vermont Governor Howard Dean, for one, claims bragging rights to being within a hair's breadth of universal health care for children in his state--96 percent of them have insurance.

Nationally, the program hasn't yet accomplished all it set out to do. Although it covers 4.3 million children, 2.7 million kids in SCHIP's near-poor target group are still without coverage. But the good news stands on its own--so far.

Beneath the congratulatory surface, however, run dark ripples of concern. What will happen to SCHIP as states, in their third year of deepening fiscal stress, take out the big budget-cutting knives? With forecasts for state revenues gloomier than ever, all state programs are on the chopping block this year--even ones as popular and successful as SCHIP.

It's not a situation SCHIP supporters like to acknowledge. At an October conference at the Urban Institute about SCHIP's past performance and future--a birthday party of sorts--the consensus was that SCHIP, which had escaped the brunt of state budget cutting in the first two years of fiscal crisis, might muddle through again, with only minimal damage--a few cuts in outreach programs and some limits on adding parents of SCHIP children to the rolls.

The reasons behind that confidence were sound. SCHIP is a politically popular program, widely viewed as successfully addressing a vital need. Legislators and governors tend to like it because it's not an entitlement, allowing states great flexibility in setting eligibility limits and scope of benefits. In addition, Congress gave states a lot of leeway in setting up the program. They could implement SCHIP by simply extending Medicaid benefits to youngsters, designing their own program or doing a combination of both.

Every state signed up for the program. After all, health care for kids is relatively cheap and the federal match was exceedingly generous. The feds pay 65 percent of the program's costs--in contrast to the 50 percent match for Medicaid. The high match should be a protection in today's dangerous fiscal environment. It's extremely difficult to justify major SCHIP cuts since they would have to be very deep in order to save a state any significant amount of its own money.

Last year, SCHIP had additional protection: In an election year, no governor or legislator wants to cut a program that explicitly serves children. But now the elections are over. And state budget difficulties are not just continuing, they are intensifying.

While SCHIP itself is not big enough to be a high-profile focus for cuts, it is nonetheless part of the overall line item for health care, and that is a big and very visible target--30 percent of state budgets, with Medicaid eating up the lion's share at 20 percent. SCHIP is tiny in comparison--roughly 1 percent the size of Medicaid. But when times are tough, everything is on the line.

That's what is important for SCHIP advocates, directors and fans to remember. While the general feeling is that the coming year will see a few squeezes along the lines of last year's adjustments, there's a danger in complacency--in not broadcasting the accomplishments of the program.

Some SCHIPs are already on the case, In Texas, Jason Cooke, director of Medicaid/CHIP Operations, says he keeps his legislators constantly updated on how well the program is working. One statistic he's been touting is the percentage of children using emergency rooms, an indicator of a lack of access to primary care. SCHIP in Texas has lowered that rate of utilization from 19 percent to 1 percent.

In California, which has one of the most dire budget dilemmas of all states, SCHIP advocates are planning ahead. They were part of a team that asked researchers at the University of California, San Diego, and the Children's Hospital of San Diego, to assess results of Healthy Families, as SCHIP is known in California. The researchers will track 6,000 families for three years to find out how they fare after enrolling in the program. Year One's results came in this past November: Among children with the poorest health, there was a 25 percent improvement in their physical condition and a 68 percent improvement in "paying attention in class" and "keeping up with school activities." Healthy Families, working with the California Teachers Association and the California Association of Health Plans, has not been shy about getting those results out--not just to legislators but also to the media.

Making the case for spillover successes--less pressure on emergency rooms, better classroom behavior--is one key way to maintain funding for this simple but effective program.

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