The State Children's Health Insurance Program Act: $8 Million for Uninsured Children

April 1998

More than 80 Roundtable participants met on April 29, 1998, to listen to a discussion of the State Children's Health Insurance Program (SCHIP). SCHIP was one of the most notable features of the Balanced Budget Act of 1997 and provides the most significant expansion of health care coverage since enactment of Medicare legislation, according to Rob Foreman, Deputy Director of Health Policy, Office of Orrin Hatch (R-Utah). This legislation was proposed by Senators Hatch and Kennedy to provide health insurance coverage to children who did not qualify for Medicaid and whose parents could not afford to buy insurance. The money from the program is available to states in the form of a voluntary block grant in the amount of $24.3 billion over 5 years.

Scope of Benefits Package
Provisions of the legislation give states maximum flexibility in how to use these funds. States can either expand their Medicaid program to accept more children, create a new program, or combine approaches. If states expand Medicaid, they must provide all Medicaid benefits. There are fewer restrictions under the Ònon-MedicaidÓ option, although there are federal guidelines. While managed care organizations can provide preventive services through SCHIP, such entities are not often available in rural areas. Dr. Earl Fox, Acting Administrator of Health Resources and Services Administration, DHHS, suggests that states can use already-recommended standards of care, such as those developed by the American Academy of Pediatrics.

Dr. Fox also noted that, in terms of coverage, states should remember to address important rural childrenÕs health needs, such as dental care, vision and hearing, and adolescent mental health services.
States have until September 30 of this year to submit plans to the Health Care Financing Administration (HCFA) for approval. To date, HCFA has approved 9 of 26 plans it has received.
Implementation Issues

Dr. Fox urged every group with an interest in childrenÕs health to Òget to the tableÓ and express its views regarding the implementation of SCHIP at the state level. The implementation issues he cited include simplification of application processes, outreach, quality of services, and development of useful outcome data for evaluating whether SCHIP is accomplishing program goals. He noted two important options of the program that can provide real opportunities for getting children covered quickly: presumptive eligibility and continuous eligibility. Presumptive eligibility allows states to provide coverage for children from the first day, without waiting for the determination of eligibility. If found ineligible, coverage is not continued; however, children will be covered until that determination is made. Continuous eligibility allows a state program to cover children continuously for one year without redetermination of eligibility within that time frame. An additional goal of the program is to screen and enroll Medicaid-eligible children while screening them for eligibility under SCHIP.
Barriers and Challenges of Outreach

Gregg Haifley, Children's Defense Fund, lists the following issues as important to the success of SCHIP:

• Explore information-sharing between governmental agencies and the private sector to disseminate information about the new program. For example, some community and church groups have already become involved, and schools can be tremendously important marketing partners.
• Bridge linguistic and cultural barriers.
• Overcome stigma issues. The manner in which states present the program is critical to avoiding ÒwelfareÓ stigmas that have developed around Medicaid programs.
• Remove logistical barriers in the application process. This is especially important for rural and frontier areas and includes exploring modified help-desk hours to accommodate parentsÕ work schedules (for example, remaining open during lunch) and devising convenient methods of submitting application materials in order to alleviate transportation problems.
• Simplify the application forms. According to Sarah Shuptrine, President of the Southern Institute, states must not only reduce the length of the application form, they must also simplify the verification process for determining eligibility and the number of documents the family must complete. Parents of eligible participants may not apply because of the difficulty in providing extensive verification information.
• Make available a national toll-free telephone number that links families to help-lines in their own state.

Building a Social Marketing Campaign
Given the importance of effectively disseminating information regarding SCHIP, Sara Shuptrine noted that the Southern Institute on Children and Families has conducted research on how to improve Òinformation outreach.Ó Based on its data, it has designed simple and colorful information brochures that have markedly increased recipient understanding of the complex Medicaid program. Shuptrine indicated that states will need to effectively market SCHIP using similar strategies.
Joan Henneberry, Program Director, National GovernorsÕ Association, added that equally important is designing a case management system to ensure that children are able to obtain the care they need. As important as it is, this aspect of outreach has not been adequately addressed. Colorado is exemplary in providing case managers for other public programs that target similar populations. Case managers use a number of strategies to follow up on cases, including going to the schools and providing transportation to appointments when necessary. Experience with other state programs has shown that good case management and follow-up is critical for program success.

Measuring Success May Be Different for Rural Areas
Measures of success in plans also may have to be tailored for rural and frontier areas, where transportation and distance are important factors. Rural issues of concern include access of families to the primary care provider of their choice, lack of public transportation, and greater travel distance to receive health care services.

Model Outreach Programs
Many states with large rural populations have designed SCHIP plans that are particularly effective in meeting the needs of rural families. For example, Utah uses a hotline, and parents have the flexibility to submit applications via mail or phone. Broad-based community coalitions have been developed to help with marketing SCHIP. Utah also has a built-in mechanism to follow up on children in the plan. Finally, the state has a special information campaign to reach out to Native American populations and employ bicultural and bilingual workers.
Another state, Oklahoma, has successfully redesigned its 14-page form into a simple one-page, two-sided application form. It also has designed attractive information posters and tailored information for rural versus urban populations. Other examplary state programs include those in Vermont and Arkansas.

Finally, Brian Webb, Deputy Director, Office of Governor Pete Wilson (California), described CaliforniaÕs approach to covering a very large population of 580,000 SCHIP-eligible children. The California plan mandates that all childrenÕs health needs be  covered. The state has made extensive outreach efforts and pays a finders fee of $25 for each child someone brings into the program.

Policy Recommendations
To assist in the implementation of SCHIP, speakers suggested the following federal policy actions to support state efforts:

1. Change the cap on outreach. Outreach is recognized as a critical component of the program but is currently classified under administrative costs, which are capped at 10 percent of all costs. Most states struggling with the 10-percent cap are those that have chosen the non-Medicaid approach to SCHIP. These states incur significant start-up costs that consume limited funds under the 10-percent cap. Brian Webb recommends that exempting these costs from the cap would free up money for more outreach without shifting all of those costs to the state. Alternatively, Title XXI could be amended to exempt outreach costs from the 10-percent cap.
2. Promote outreach through information-sharing via a check box on other federal program applications. To assist in the outreach effort, Shuptrine suggests requiring that applications to the school lunch program, WIC, food stamps, housing, low income energy assistance, and the Head Start program contain a check box for parents to request information on child health insurance coverage.
3. Allow a grace period for eligibility errors to encourage states to develop more user-friendly eligibility policies and procedures. Typically, states require families to provide verification of numerous statements made on the application for which self-declaratory statements should be sufficient. There is evidence to indicate that a reduction in verification requirements does not result in increased errors.

Helpful Resources:

1. Advocates Toolkit. Available from the ChildrenÕs Defense Fund (CDF). Contact: the CDF Publications Department at (202) 628-8787.
2. Southern Regional Initiative to Improve Access to Benefits for Low Income Families with Children. Contact the Southern Institute on Children and Families at (803) 779-2607.
   3. How States Can Increase Enrollment in the States ChildrenÕs Health Insurance Program. To order, call Emily Cornell at the National Governors' Association, (202) 624-7879. The publication also may be viewed on NGAÕs website at www.nga.org.
3. Non-Enrolled Children: GAO Report NHEHS98-93
   

Stat Bites

Rural children are much more likely to be uninsured for health care as urban childrenÑwith a rate of 21 percent uninsured versus 14 percent insured (Maine Rural Health Research Center).

Uninsured children obtain care half as often for acute earache, recurrent ear infection, pharyngitis, and asthma as do children with public or private coverage (Stoddard, jj, St. Peter, R.F., and Newacheck, P.W. ÒHealth insurance status and ambulatory care for children. New England Journal of Medicine, 1994, 330: 1421-25).

Children's Health Fact Sheet: (excerpted from A Quantitative Profile of Rural Maternal and Child Health. Clark, S.J., Randolph, R.K., Savitz, L.A., and Ricketts, T.C.) This report was funded by the federal Office of Rural Health Policy.

Overall, the profile of rural children in the United States has changed very little in the past 10 years. Many aspects of children's health status cannot be determined due to inadequacies in available data. However, the health of rural children appears to be worsening with regard to crime, substance abuse, AIDS, and fatal injuries, which continue to affect a disproportionate number of rural children.

• Approximately 3.1 million rural children are uninsured (Project Hope).
• Overall, rural children are more likely to need but not receive dental care,
  and are more likely to experience a delay in receiving care due to cost.
• Fatal injuries are 44 percent higher among rural children aged 1 to 19 years than among their urban counterparts. Fatal injuries are associated primarily with motor vehicle crashes, firearm injuries, drowning, burning, suffocation, and poisoning.
• Rural youths are experiencing crime at a level and in ways similar to youths from the cities and suburbs: 71 percent report that drugs are available at their school, 7 percent report being a victim of property crime, and 20 percent fear being attacked at school.
• The percentage of births to teenage mothers is higher in rural areas (15.5 percent versus 11.7 percent).
• The incidence of AIDS in rural areas is lower than in urban areas. However, the gap between urban and rural cases narrowed substantially during this period. The increasing incidence of AIDS among women is an area of great concern, as more than 90 percent of new cases of pediatric AIDS were transmitted from mother to infant since 1990.

For more information about the Sheps Center (Tom Ricketts, Director), see www.shepscenter.unc.edu. The North Carolina Research Program, Sheps Center for Health Services Research, University of North Carolina, Chapel Hill, has been funded by the federal Office of Rural Health Policy.
 

Capital Area Rural Health Roundtable
Center for Health Policy Research & Ethics
George Mason University
Fairfax, Virginia
703-993-1907