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Eligibility Options for Children and Families
Moving Forward in an Uncertain World: SCHIP Reauthorization and Implications for State Coverage Initiatives
January 2008
Cindy MannExecutive Director
Georgetown University Health Policy InstituteCenter for Children and Families
ccf.georgetown.edu
Issues
• What are the coverage options for children under Medicaid/SCHIP?– Federal law– August 17th directive
• Strategies to address the August 17th directive– Legal– Legislative
• Eligibility for parents and pregnant women
Why Do We Care?
• Affordability gap is growing• Differences in cost of living• Broader coverage promotes enrollment among
lower income eligible but unenrolled children
Growth in Private Premiums for Families Far Outpacing Growth in Poverty Level
103%
0%
24%
0%
20%
40%
60%
80%
100%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Family Premium Federal Poverty Level
Note: These data represent the cumulative growth in employee premium contributions for employer-sponsored family coverage and the federal poverty level for a family of three.Source: Agency for Healthcare Research and Quality estimates of 1996-2005 Medical Expenditure Panel Survey Insurance Component Tables, generated using MEPSnet/IC (August 21, 2007); and CCF analysis of 1996-2005 Federal Poverty Guidelines.
$59,099
$50,445
$51,128
$34,477$31,078 $31,352$28,552
$0
$10
$20
$30
$40
$50
$60
Houston,TX
DesMoines, IA
Columbia,SC
Salt LakeCity, UT
Newark,NJ
Stanford,CT
San Fran,CA
Thousands
The Cost of Living Varies Widely
Note: In 2007, 200% of the federal poverty level for a family of three was $34,340 annually. Source: Center for Children and Families, “The Growing Health Insurance Affordability Gap For Children and Families,” (October 2007).
The cost of goods and services worth $34,340 in the average city, adjusted for the cost of living.
200% FPL for a family of 3
Children’s Eligibility
• Bottom line: Longstanding federal law grants states flexibility to set eligibility levels in Medicaid & SCHIP
• But– CMS directive imposes new barriers effectively stopping coverage
with SCHIP funds > 250% FPL -G– CMS intent on stopping new coverage in SCHIP and Medicaid– Rollbacks in eligibility levels likely by August ‘08 unless
courts/congress intervene– Bipartisan group of lawmakers concerned, but so far concern
hasn’t translated into action
Key Routes to Eligibility for Children
• Multiple, overlapping eligibility categories in Medicaid– Mandatory minimum income levels– No upper limit; statute allows expansions through use of
deductions/disregards
• Similarly, SCHIP law establishes a minimum income level (no less than a state’s 1997 Medicaid eligibility level) and no upper income limit– Statute allows states to use income deductions and
disregards
“These (eligibility) expansions (for children) have been accomplished because the law gives states great flexibility to define income. Through income disregards, states effectively raise the income eligibility threshold. Under current regulations, we have no authority to disapprove amendment solely based on income disregards.”
-Secretary Michael Leavitt(letter to Senator Grassley, July 31,
2007)
Before Directive 14 States Covered Children Above 250% FPL Under Approved Plans
AZAR
MS
LA
WA
MN
ND
WYID
UTCO
OR
NV
CA
MT
IA
WIMI
NE
SD
ME
MOKS
OHIN
NY
IL
KY
TNNC
VT
PA
VAWV
CTNJ
DE
MD
HI
DC
AK
SCNM
OK
GA
TX
FL
AL
MA
RI
NH
Source: Center for Children and Families, “Moving Backward: Status Report on the Impact of the August 17 SCHIP Directive To Impose New Limits on States’ Ability to Cover Uninsured Children,” (December 2007)
And 10 More States Had Enacted Expansions
AZAR
MS
LA
WA
MN
ND
WYID
UTCO
OR
NV
CA
MT
IA
WIMI
NE
SD
ME
MOKS
OHIN
NY
IL
KY
TNNC
VT
PA
VAWV
CTNJ
DE
MD
HI
DC
AK
SCNM
OK
GA
TX
FL
AL
MA
RI
NH
IL
Source: Center for Children and Families, “Moving Backward: Status Report on the Impact of the August 17 SCHIP Directive To Impose New Limits on States’ Ability to Cover Uninsured Children,” (December 2007)
What Happened?
There Is No $83,000 SCHIP Child
Note: Medicaid, not SCHIP, covers children below 100% FPL. Source: Center for Children and Families, “Coverage of Uninsured Children in Moderate-Income Families Under SCHIP,” (October 2007).
Income RangePercent of
SCHIP Enrollees
Above 350% FPL None
301-350% FPL 0.05%
201-300% FPL 8.65%
100-200% FPL 91.30%
Total SCHIP Children = 6.7 Million
99.95% Below
300% FPL
August 17th Directive
• Issued as a letter by CMS to state Medicaid directors
• Not precipitated by any change in law or regulations
August 17th Directive: What Does it Say?
• Two preconditions before a state can receive SCHIP funds to cover children with incomes above 250% FPL (gross)– 95% participation rate in Medicaid/SCHIP among low-
income children
– ESI for low-income children cannot have dropped by more than two percentage points over the past 5 years
Medicaid/SCHIP Participation Rates Among Low-Income Children Under 19, 2005-2006
AZAR
MS
LA
WA
MN
ND
WYID
UTCO
OR
NV
CA
MT
IA
WIMI
NE
SD
ME
MOKS
OHIN
NY
IL
KY
TNNC
NH
MA
VT
PA
VAWV
CTNJ
DE
MD
RI
HI
DC
AK
SCNM
OK
GA
Note: The Medicaid/SCHIP participation is calculated as the number of children enrolled in Medicaid or SCHIP as a percentage of the sum of these enrollees and the number of uninsured children. Low-income is defined as below 200 percent of the federal poverty level. Data is averaged over two years to improve the reliability of the estimates. The sample size however is still small particularly for smaller states and the only available data (CPS) does not account for children eligible for Medicaid or SCHIP due to immigration status.Source: Center for Children and Families, “American Families Face Harsh Reality: 2,000 Children Join the Ranks of Uninsured Each Day,” (October 2007).
TX
IL
FL
AL
< 70% 13 states
70%-79.9% 19 states
80%-85.9% 13 states
86%-90% 6 states
including D.C.
> 90% 0 states
• If a state meets the two preconditions, it must:– Force eligible uninsured children who had ESI to
remain uninsured for 12 months (no exceptions?)
– Charge maximum cost sharing (5% of income; alternative posed but not practically possible)
August 17th Directive: What Does it Say?
• States that already have approved plans must comply by August ‘08– Eligibility levels would be rolled back
– CMS says children already enrolled could still be covered, but even those children could lose coverage (if coverage gap)
August 17th Directive: What Does it Say?
Impact So Far
• No state expansion has been approved – Missouri snuck in (?)
• Coverage denied (4 states)– Ohio (200-300% FPL)– New York (250-400% FPL)– Louisiana, Oklahoma (250-300% FPL); 200 - 250% expansions
pending
• Coverage expanded, but only with state funds (2 states)– Illinois (200-300% FPL)– Wisconsin (250-300% FPL)
Responses
• Broad, strong opposition• Letter to CMS signed by 30 Governors• Letter to President Bush signed by 44 Senators• Letter to Congress signed by 40 Senators• Litigation filed by several states
CHIPRA 1: No Income Cap
• CHIPRA 1 maintained state flexibility to set eligibility levels– Regular Medicaid match for coverage above 300% FPL
– Replaced August 17th directive with studies, data collection, new requirements beginning in 2010 for expansions over 300% FPL
CHIPRA 2: 300% Income Gap
• CHIPRA 2 included 300% FPL income cap for coverage financed with SCHIP funds – Replaced August 17th directive similar to CHIPRA 1
SCHIP Extension
• Directive not addressed• Other opportunities will arise over next few
months
23 States Currently Affected by The August 17th Directive
AZAR
MS
LA
WA
MN
ND
WYID
UTCO
OR
NV
CA
MT
IA
WIMI
NE
SD
ME
MOKS
OHIN
NY
IL
KY
TNNC
NH
MA
VT
PA
VAWV
CTNJ
DE
MD
RI
HI
DC
AK
SCNM
OK
GA
TX
IL
FL
AL
Expansion states already negatively impacted: 6 states
Expansion states with 2008 implementation
dates: 4 states
States with approved plans that must comply by Aug. 2008: 14 states
including DCSource: Center for Children and Families, “Moving Backward: Status Report on the Impact of the August 17 SCHIP Directive To Impose New Limits on States’ Ability to Cover Uninsured Children,” (December 2007)
Parent Eligibility
• As with children, federal Medicaid law sets minimum eligibility standards with state option to expand; no upper income cap– Minimum standard much lower than for children
• No option under SCHIP; some states had waivers– CHIPRA would have stopped future waivers and
transitioned current waivers out of SCHIP with reduced match
– Secretary Leavitt: no new waivers or waiver renewals
Some Renewed Interest in Parent Expansions
• Logical next step for many states
• Restoration of coverage
• Recent advances
Pregnant Women Eligibility
• Federal Medicaid minimum standard with option to expand; no upper income cap
• “Unborn child” option under SCHIP
– CHIPRA also would have allowed a pregnant woman coverage option
• SCHIP waivers still available• Beware of CMS: Wisconsin
SCHIP Timeline
10 states adopt expansions over 250% FPL
14 states have implemented plans covering children over 250% FPL
PA plan approved
House adopts SCHIP bill - no income cap
Senate adopts SCHIP bill - no income cap
Secretary Leavitt informs Sen. Grassley that he has no
authority to deny state income expansions
CMS effectively imposes an income cap on SCHIP at 250% (gross)
CMS denies NY’s plan; by December, 6 states either halt expansions, or state-
fund them
Bipartisan group of Senators from 19 of the states affected
call on Congress to end the directive
Congress extends SCHIP to March
‘09, fails to address the directive
NY et al. file suit, NJ files suit
Governors from 30 states send letter to Secretary Leavitt regarding the
directive