The Impacts of SCHIP on Insurance Coverage for Low-Income Children

1. The Impacts of SCHIP on Insurance Coverage for Low-Income Children Lisa Dubay and Genevieve Kenney The Urban Institute Academy Health Meetings June 2004

2. Background • The State Children’s Health Insurance Program created in August 1997 • All states have expanded coverage under SCHIP • States given latitude over structure of programs • States simplified enrollment process and engaged in unprecedented levels of outreach • Measuring impact of SCHIP is complicated by concurrent changes in the economy and health insurance market

3. Cross-Sectional Studies • Buchmueller and LoSasso (2004) • Dubay, Kenney, Hill (2002) • Cunningham, Hadley, Reschovsky (2002) • Cunningham (2002) • Davidoff et al. (forthcoming)

4. Longitudinal Studies • Shenkman et al. (2002) • Shenkman et al. (2002) • St. Peter et al. (2002)

5. Our Objectives • Develop estimates of impact of SCHIP and other policy changes on insurance coverage • SCHIP/Medicaid coverage • employer-sponsored coverage • private non-group coverage • uninsurance • Estimate the share of increase in Medicaid/ SCHIP coverage attributable to reductions in uninsurance and in employer-sponsored coverage

6. Data • 1997, 1999, and 2002 National Survey of America’s Families (NSAF) • nationally representative household survey • over-samples low-income population • over-samples populations in 13 states • interviews conducted in English and Spanish • includes telephone and non-telephone households • Collects information on range of measures • health insurance coverage and socioeconomic characteristics of children, parents, and families

7. Medicaid and SCHIP Eligibility Model • Three eligibility groups • TANF-related Medicaid • Poverty-related Medicaid • SCHIP • Detailed eligibility model • creates eligibility units • uses state-specific TANF, Medicaid and SCHIP rules regarding income, disregards, assets, and income deeming

8. Methodological Approach to Assessing Impacts of Expansions in Coverage • Examine change over time for two treatment groups: • newly eligible under SCHIP • already eligible for Medicaid under poverty-related expansions • Examine change over time for a comparison population • Use the experience of the comparison population as a counterfactual for what would have happened in the absence of the policy changes • Use multivariate methods to control for: • differences in the composition of the treatment and comparison groups • changes in the composition of the treatment and/or comparison groups between the pre- and post-period

9. There Is No Perfect Comparison Group • Similar to SCHIP-eligible group, but not affected by the policy change • Children with family incomes between 50 and 100 percentage points above the SCHIP eligibility threshold.

10. Control Variables • Child and family characteristics including: age, race, health status of child, education, industry and firm size of working parent, income, marital status of parents, and state of residence. • Two different controls for insurance costs faced by families: • Weighted average ESI premium in the county • Weighted average ESI premium or ESI contribution in the county, depending on whether an offer in the household.

11. Insurance Distribution of SCHIP Eligible Group 1997, 1999, and 2002 Source: 1997, 1999, and 2002 National Survey of America’s Families * Estimate is significantly different than estimate for 1997 at 0.05 level

12. Insurance Distribution of Medicaid Poverty-Related Eligible Group, 1997, 1999, and 2002 Source: 1997, 1999, and 2002 National Survey of America’s Families * Estimate is significantly different than estimate for 1997 at 0.05 level

13. Impacts on Insurance Coverage of Medicaid and SCHIP-Eligible Children: Difference-In-Difference Results Using Premiums as Control SCHIP-Eligible Medicaid/Poverty-Related  Medicaid/SCHIP Employer Uninsured Private Source: 1997, 1999, and 2002 National Survey of America’s Families 13

14. Impacts on Insurance Coverage of Medicaid and SCHIP-Eligible Children: Difference-In-Difference Results Using Premiums, Contributions and Offers as a Control SCHIP-Eligible Medicaid/Poverty-Related  Medicaid/SCHIP Employer Uninsured Private Source: 1997, 1999, and 2002 National Survey of America’s Families 14

15. What Was Expected Under SCHIP? “On the basis of a review of the literature and analyses of participation in the Medicaid program, CBO estimates that 60 percent of the participants in S-CHIP would otherwise have been uninsured. The remaining 40 percent would have had some other form of coverage.” CBO February 1998

16. Crowd-Out Estimates

17. Take-Up Estimates

18. What is going on with take-up? • Preliminary estimates suggest that 80 percent of Medicaid eligible and 70 percent of SCHIP eligible children have parents who would enroll if told their children were eligible • Only about 50 percent of uninsured eligible children have parents who have heard of Medicaid or SCHIP and understand the rules • Among eligible children with employer-sponsored coverage, about 15 percent have parents who would drop their coverage and enroll if told their children were eligible

19. Future Steps • Test for endogeneity of offer rates • Use HIS and NSAF to assess impacts on access and use using DD and instrumental variable techniques • Use SIPP to examine SCHIP impacts

20. Food For Thought About Crowd-Out and Incremental Reform • Private coverage still mainstay for SCHIP- eligible children • Potential financial benefits to families and firms • Potential adverse effects of churning in insurance coverage on continuity of care for children who switch in and out of different types of coverage • Horizontal equity • In light of recent Medicare drug benefit to the elderly, how much should we be concerned about crowd-out among low-income children? • Increasing participation should be the current focus