Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

One of the biggest challenge facing the public health insurance system for children today is how to reduce the number of uninsured eligible children and increase continuous coverage for children enrolled. Addressing this problem is complicated by the existence of the dual and sometimes competing programmatic structures of Medicaid and SCHIP. Separate SCHIP programs enrolled 72 percent of the SCHIP caseload in 2006, thus switching programs in these state may require a child to change providers, or lead to loss of specific benefits or disenrollment, while leading to new administrative costs to states. Churning in and out of public coverage is a well-documented dynamic in Medicaid. Less well understood is the underlying eligibility dynamics of children, which could be much larger in magnitude than the churning population. As states move to expand coverage to more of the uninsured, the consequences of larger eligibility dynamics could be realized.

In this study we analyze eligibility dynamics in Medicaid and SCHIP for children over period 1996-2000, using data from the 1996 panel of the Survey of Income and Program Participation (SIPP). We used eligibility algorithms based on the Transfer Income Model version 3 (TRIM3) to impute eligibility in Medicaid and SCHIP for all children age eighteen and younger. This algorithm incorporates state-specific rules for Medicaid eligibility under Section 1931, Section 1115, medically needy, Supplemental Security Income, Social Security Disability Income, poverty-related expansions, and SCHIP. The simulation incorporates rules related to family structure, disregards, gross and net income thresholds, and categorical designations. Eligibility for SCHIP included Medicaid-expansion programs under SCHIP and separate SCHIP programs based on rules in place during the wave. We did not model eligibility for SCHIP based on access to employer-sponsored insurance. Therefore, our estimates represent children who are income-eligible for SCHIP.

Our study finds that two-thirds of children in the United States were income-eligible for Medicaid or SCHIP at some point from 1996 to 2000. Thirty-two percent of all eligible children were eligible for both Medicaid and SCHIP during the course of the panel, representing one-fifth of all children, or almost 19 millioin children. Seventy-three percent of children ever eligible for SCHIP were eligible at other times for Medicaid. Interruptions in eligibility were common: 41 percent of all eligible children had multiple spells of eligibility, which does not account for children were eligible for Medicaid and experienced changes in income or family structure that would lead to a change in how they became eligible for Medicaid (ie. welfare- versus poverty-related rules). These changes could lead families to believe that they are no longer eligible for Medicaid or could require new documentation.

As SCHIP is reauthorized, Congress will need to give states the tools and financial commitment to assure that uninsured children are enrolled in and retain the coverage for which they are eligible.