The Employer-based Health Care System - Shifting Responsibilities: SCHIP at Reauthorization

1. The Employer-based Health Care System - Shifting Responsibilities:SCHIP at Reauthorization Genevieve Kenney The Urban Institute National Health Policy Conference February 12, 2007

2. Background on the State Children’s Health Insurance Program • SCHIP is up for reauthorization in 2007 • SCHIP was created in August 1997 to address coverage gaps among low-income uninsured children not eligible for Medicaid • SCHIP is a block grant with a higher federal match rate than under Medicaid • Anti-crowd out provisions were included in the statute; no wrap-around benefits, option of creating premium assistance programs • States had flexibility over their program structures, eligibility, benefits, cost sharing, crowd-out prevention, and enrollment limits

3. Share without Health Insurance Coverage at the Time of Interview, by Age Group: 1997-2003 Adults Children Source: JS Schiller, M Martinez, P Barnes. Early release of selected estimates based on data from the 2005 National Health Interview Survey. National Center for Health Statistics. http://www.cdc.gov/nchs/nhis.htm. June 2006.

4. Changes in Health Insurance Coverage of Low-Income Adults and Children, 2000 to 2004 Adults Kids Adults Kids Adults Kids Medicaid/SCHIP Uninsured ESI Source: S Zuckerman and A Cook. “The Role of Medicaid and SCHIP as an Insurance Safety Net.” Washington, DC: The Urban Institute. August 2006. 4

5. Most SCHIP Enrollees Do Not Have Access to ESI Source: G Kenney and A Cook. “Coverage Patterns Among SCHIP-Eligible Children and Their Parents.” Health Policy Online No. 15. Washington, DC: The Urban Institute. February 2007. Source: Kenney and Cook, 2007

6. Insurance Coverage among Children Who Qualify for SCHIP Based on Income Source: G Kenney and A Cook. “Coverage Patterns Among SCHIP-Eligible Children and Their Parents.” Health Policy Online No. 15. Washington, DC: The Urban Institute. February 2007.

7. Gap Between Available Federal Funds and Spending Has Been Growing SCHIP Spending * SCHIP Allotment Source: Congressional Research Service (CRS) analysis and CRS SCHIP Projection Model * Projected Spending Level

8. Looming Federal Funding Shortfalls • Funding problems are more acute in some states than in others; a growing number of states are projected to face shortfalls in the coming years and funding uncertainties may limit state expansions (Peterson 2006) • Despite $4 billion accumulated in unspent funds, a number of states will face federal funding shortfalls by May 2007, and Georgia is slated to face a shortfall even earlier • CBO baseline includes an annual federal funding level of $5.0 billion. At that funding level, SCHIP enrollment is projected to fall from 4.4 to 3.1 million over five years (HHS 2006) • An estimated $12.7 to $14.6 billion in additional funds would be needed to maintain programs at current levels through 2012; even more is needed to cover remaining eligible uninsured children or other groups (e.g. low-income parents), but would require offsetting savings elsewhere in the budget (Broaddus and Park 2006; Peterson 2006)

9. SCHIP at Reauthorization • Federal budget situation • State efforts to reach universal coverage • Federal health care reform proposals to address issues with employer-based coverage