States Unhappy With Final SCHIP Registration

When Congress established the State Children’s Health Insurance Program (SCHIP) in 1997, lawmakers hoped it would cover millions of children across the country. To reach that goal, federal officials kicked in $24 billion over the first five years, and gave states flexibility to design what works best. If a state wished to expand its Medicaid program, so be it. If another state wanted to build an entirely new program, that was okay, too. Want to combine the two choices? Go for it. But all the creativity and thinking outside the box may soon come to a screeching halt, say many state officials, thanks to the Jan. 6 release of final SCHIP regulations. 

Three years and a few months later, more than 3.3 million children who would otherwise be without health insurance are enrolled in SCHIP, according to the U.S. Dept. of Health and Human Services (DHHS).

The numbers alone speak volumes about the work that states have done, says the National Governors Association’s (NGA) Joan Henneberry. “States’ innovation is evidenced in the number of kids enrolled, and that data is already six months old,” she says.

The creativity of the states in things like marketing and outreach–or actually getting out there and getting kids enrolled in SCHIP–has also spilled over into Medicaid, Henneberry says.

Many states have streamlined applications, so what used to be a 12-page form is now down to one. Offices that used to close at 5 P.M. now have staff on duty after-hours, so working parents can sign up for SCHIP in the evenings or on weekends. States have also advertised SCHIP programs in non-traditional ways: by attaching flyers to pizza delivery boxes or by sending home information with kids at the start of the school year.

But all the creativity and thinking outside the box may soon come to a screeching halt, say many state officials, thanks to the Jan. 6 release of final SCHIP regulations.

When DHHS published the regs last month, the document was billed as “preserving states’ flexibility” in the SCHIP program design. Policies outlined in the regulations include: basic rules in kid’s eligibility; procedures for screening and enrolling children (if eligible) for Medicaid; and limits on out-of-pocket costs for families with kids enrolled in SCHIP. “It’s nice to see some flexibility, but in most cases, states are disappointed that our suggestions to the proposed regulations weren’t addressed,” says Chad Westover, administrator of Utah’s SCHIP program.

Many of the added requirements will, instead of helping states, just create more paperwork. “If someone comes in and applies for SCHIP, we’re now required to send them Medicaid information. Even if the person is ineligible, you still have to explain Medicaid rules,” Westover says. “SCHIP was intended to give states flexibility, but unfortunately, the Health Care Financing Administration (HCFA) would like it to look more and more like Medicaid. We’ve lost an opportunity” here, he adds.

Even in a state like Tennessee, which doesn’t use a lot of federal SCHIP funds because of the unique structure of its TennCare program for the uninsured, officials are not happy with what they see.

“The biggest issue with those changes is that we believe states should not be capped or limited in the amount of spending, but should be able to use unused money for other services,” says John Tighe, deputy commissioner of the Dept. of Finance and Administration. “We’re struggling in our state with inadequate reimbursement and a lack of dental coverage, and believe we should be able to use those dollars” but our hands are tied, he adds.

States now have 90 days to incorporate the new regulations into SCHIP programs, but officials hope the new Administration will make good on a promise to review recently-released regulations like this one, and that perhaps they’ll see some changes.

“HCFA and the states have the same goal, which is to insure kids, but the means right now to achieve the goal is umpteen pages” long, says Utah’s Westover. “The means to getting to the goal could be much more efficient. We’re hoping the administration will take a look at the regs, and will possibly allow more flexibility.”