Facts About CHIP

The Facts About CHIP
The majority of uninsured children now qualify for health coverage through expanded Medicaid and the Children's Health Insurance Program (CHIP). Millions of working families can now provide their children with the health care they deserve.

Enacted by Congress as part of the Balanced Budget Amendment of 1997, CHIP is designed to provide health coverage to children in working families with incomes too high to qualify for Medicaid, but too low to afford private family coverage. All states are now offering coverage through CHIP, with most states providing coverage to families with incomes up to 200% of the federal poverty level or ($34,100 for a family of four).

CHIP funding provides the most significant spending increase for children's health since the enactment of Medicaid in 1965. Over a 10-year period, the program provides $48 billion in grants for states to cover uninsured children. States are allowed to develop a new state program, expand their Medicaid program or a combination of both. Currently, all states and the District of Columbia are spending CHIP funds to cover uninsured children. As with Medicaid, CHIP is not paid for solely by the federal government but by both the state and federal government according to predetermined percentages of the total cost of the program. In Medicaid, the federal government pays between 50-83% of total costs, with the higher federal burden allocated to states with lower per capita income. The federal burden is higher with CHIP programs than with Medicaid. (CHIP federal allotment=Medicaid allotment + 30% (100%-Medicaid allotment)) This correlates to an approximately 10-20% higher federal allotment per state for CHIP than for Medicaid.

Who is Eligible?
Uninsured children who live in working families with low or moderate incomes are eligible. In most states, children age 18 and under are eligible. Typically, children in a working family of four earning up to $34,100 a year would qualify. Several states have increased the eligibility level above 200% to reach more working families.

What do children receive once they are enrolled? Although benefits vary, children generally are eligible for regular checkups, immunizations, eyeglasses, doctor visits, prescription drug coverage, and hospital care.

Despite the opportunities afforded through CHIP, their are significant barriers to enrollment.

The New York Times headline on September 24, 2000, read "40 States to Forfeit Health Care Funds for Poor Children." There are many barriers that may have contributed to sluggish enrollment in these states. A key part of offering health insurance to poor children is overcoming barriers to enrollment.

Predictors of Success and Failure
After the initial failures of the CHIP program, as publicized by a New York Times article that indicated the failure of 40 states to utilize all of the federal money allotted to them, people began to look at what may be a predictor of success and failure of an individual CHIP program. They were surprised to find no connection to partisan forces. There was also no connection to the type of program offered, whether it was an expansion of Medicaid, a separate CHIP program, or a combined program

They have found that success correlates with a person or group in the state that is obsessed with it's success. As indicated below, success also is associated with programs that users say feels like insurance rather than a welfare type government handout. Hiring a marketing expert and getting an early start has also seemed to help.

Failure has correlated primarily with some specific barriers to enrollment, such as long, complicated applications or a lack of effort early on. More information on these barriers can be found below. In some states, state legislator opposition was crucial in limiting the states development of a CHIP program. For example, in Arizona Senator Russell Bowers put pressure on the legislature to not develop a program in order to avoid having to allocate the necessary state funds.

Outreach Barriers
Work to make cultural shifts on the federal, state and local levels in the treatment of recipients of state health insurance programs. States need to treat families as customers of a health insurance program. Nearly all of the families seeking health insurance for their children are working families who work hard and play by the rules, but cannot afford private health insurance coverage. For example, Alaska's Denali KidCare program resembles a private health insurance program and avoids the stigma of a government program.

Remove health programs from the Welfare office environment. Families need to be able to mail in applications and get assistance with applications after normal business hours. Working families cannot afford to spend a day in the Welfare office away from work to enroll their children.

Improve public perception of these programs. Many families may not enroll their children because of the institutional stigma associated with Medicaid. Making the enrollment process easy will alleviate concerns about the bureaucracy of institutional programs like Medicaid.

Spread the word in hard to reach communities- getting people to believe that CHIP is for their children. We all need to engage trusted sources in our community to reach out and inform parents and enroll children. Many people when they first here about the program think its for families that are less fortunate then themselves. Trusted sources may include religious organizations, schools, and providers of medical and human services.

Improve state's approach to outreach. States need to take a multidimensional approach to outreach- utilizing community-based organizations, churches, schools and others in the efforts to enroll eligible children. States need to be sensitive to the fact that one message may not work for the broad audience they are trying to reach. For example' outreach workers in Pennsylvania found that the phrase "free" did not work in rural areas but did in the cities. People in rural areas responded more favorably to a message of "we can help with health insurance".

Improve techniques to reach immigrant families. There is much work to be done in this area. In some states like California and Texas, a significant number of the eligible children come from families where the children are citizens but the parents are not. States must develop culturally competent materials, and language-specific marketing campaigns for these families.

Systematic Barriers
Some of the systematic barriers to enrollment have been overcome by most states, and some have only been achieved by a few states. The number of states that have the streamlining measure listed below is indicated in the parenthesis. This is based on data from the Kaiser Family Foundation and indicates status of the programs as of July 2000.

Joint Applications (28/32)-One streamlining measure that has shown significant effect in increasing enrollment is having a joint application for Medicaid and for CHIP in the states which have a combined program. Initially many programs didn't have this system in place, so parents had to fill out one application for Medicaid first, and, if denied, had to return to fill out a CHIP application. Some states Medicaid applications had a checkbox that you needed to check to indicate you wanted to apply for CHIP if denied for Medicaid. This was easily overlooked by many patients and providers.

Asset Test (42/51)- 9 states still require a questionnaire that surveys assets such as automobiles, livestock, and trust funds owned by the applicant. This has been shown to limit the number of children who qualify and have also made it much more difficult to complete the application, particularly by working parents.

Face to Face Interview Elimination (40/51)- As of July 2000, 10 states still required a face to face interview with a welfare officer to qualify for CHIP enrollment. This also correlated with decreased enrollment, particularly with working parents who needed to take off work in many cases to schedule and participate in the interview. Another obvious barrier this creates is the stigma associated with welfare officers.

Annual Redetermination (39/51)-12 programs require its enrollee's to be redetermined as qualified for enrollment more often than once every 12 months. This makes it incredibly difficult to stay enrolled. Most programs have moved to annual redetermination to streamline the process.

The following measures have only been included in a handful of states' programs, but they have all correlated well with successful enrollment.

Presumptive Eligibility (8/51)- Presumptive eligibility allows doctors to make a preliminary determination that the child is eligible for CHIP or Medicaid based on information from the family. The child can receive care immediately and the state will cover the cost of the care for a period of time (usually thirty days). During the 30-day period the family is sent an application to be filled out to enroll the child in a children's health insurance program. Currently, only 5 states have procedures in place to provide presumptive eligibility.

Self -Declaration of Income (10/51)- Currently only 10 states allow parents to self declare income for eligibility without needing to supply supporting documentation such as birth certificates, income verification, proof or residency, and proof of allowable deductions. Under Medicaid, states are required to verify income through already existing state databases. This practice is not required under CHIP, although it is strongly encouraged by the Health Care Financing Administration (HCFA). This practice may be required before other states agree to accept self declaration.

12-month Continuous Eligibility (13/50)- Once enrolled into the program, states must make it simple to stay enrolled. More states need to adopt 12-month continuous eligibility for both CHIP and Medicaid. Continuous eligibility prevents disqualification based on changes in parental income, which is often more labile in lower income families. Without continuous eligibility, there is limited ability to have continuous care, especially since a change in income doesn't necessarily correlate with the addition of employer based insurance coverage.

Misalignment- Many states have included some of the above streamlining measures for either CHIP or Medicaid but not for both programs. This leads to an uncoordinated application process, difficult administration by the state, and increased administrative costs (which under CHIP legislation must be limited to 10% of the total cost of the program). In addition, some Medicaid eligibility is age based. For example, state X may cover children between 0 and 2 when family income is at 200% of the poverty line but only cover kids between 2 and 5 when the family income is at 150% of the poverty line. Program alignment makes it much easier to apply for all children in the family with a single application instead of having to fill out a different application for each child.

Immigrant and Cultural concerns- Many state applications have a space for the parent's social security number. This is contrary to federal law for CHIP and is a major deterrent to immigrant families in which only the children are U.S. citizens. Many parents remain fearful of coming forward to enroll a child because they are concerned it may jeopardize the immigrant status of a non-citizen member of their immediate family.

Immigrants also face language and cultural barriers. Many states do not offer application assistance in languages other than English. Many immigrant families do not understand the American health care system and need to be educated about the importance of health insurance. States need to do a better job providing this education to families.