February 2009

S-CHIP Renewal Signals New Era of Coverage Expansions

President Obama’s signing of the Children’s Health Insurance Bill into law this month signals a new era of cooperation between states and the Federal government in expanding health coverage. Through the expansion of the State Children’s Health Insurance Program (S-CHIP), an estimated 4 million additional children nationwide will be covered. Offered to the children of families who exceed Federal income limits for Medicaid, but who generally do not earn enough income to afford private coverage, S-CHIP targets the population perhaps most affected by the current economic crisis and rising insurance costs.

While there are drawbacks and risks associated with large expansions of government-sponsored health programs—Hawaii’s recent struggles with its own S-CHIP program serve as a cautionary tale—the New York State Health Foundation (NYSHealth) feels that the expanded S-CHIP law represents a significant and positive first step in the area of coverage at a time when it is sorely needed. For those of us in the health care community, we need few reminders that the growing number of uninsured Americans—including more than 2.5 million here in New York State—poses a serious challenge to our health care system.

Reasons for Optimism

While the expansion of S-CHIP will impact less than 10% of the 47 million Americans without health insurance, it is hopefully a sign of what is to come—a coordinated effort by the Federal and state governments to move closer to universal coverage.

Here in New York, the State government has sponsored significant expansions of children’s health insurance since 1992 (five years before Congress passed the original S-CHIP bill). Our Child Health Plus program has had a tremendous impact on reducing the number of uninsured children across the State. Covering children and teenagers whose parents earn less than 400% of the Federal poverty level—the highest eligibility level in the country—Child Health Plus offers New York’s children and teens comprehensive benefits, including primary care services, dental and vision care, hospital and emergency room use, and therapy and out-patient services. The program currently covers 434,000 of the State’s kids and adolescents.

The newest S-CHIP expansion will allow New York, and other states, to grow their coverage pools with additional Federal funding. The law allots an additional $32.8 billion dollars to states during the next four years to fund the expansion of coverage. While the amount directed to New York is still to be determined, the matching funds the State should receive will be a major boost to our program. Additionally, the expansion will permit S-CHIP programs to enroll legal immigrants, allowing states to reach a population that has until now had no access to these programs. These changes are expected to increase enrollment in S-CHIP programs up to 11 million nationwide.

The Road Ahead

Despite the increase in the number of children covered under the expansion, systemic problems—both in New York’s Child Health Plus and in S-CHIP programs nationwide—need to be addressed to truly improve coverage and access. For example, failing to renew coverage for individuals who remain eligible results in massive enrollee churning that undermines stable insurance protection. In New York State, NYSHealth is supporting efforts to address this issue. A forthcoming report by one of our grantees, Lake Research Partners, identifies ways to improve the recertification process.

Boosting retention rates, combined with other simplification and streamlining efforts, will ensure that the S-CHIP expansion succeeds. We are hopeful that this expansion will usher in a new era of cooperation between the Federal and state governments, allowing us to solve the health coverage problems that have left 47 million Americans uninsured. The S-CHIP expansion was a critical step. We look forward to those that follow.

James R. Knickman