Children s Coverage: Opportunities and Challenges NCSL Critical Health Areas Project (CHAP) Fall Meeting October 4, 2007

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1 Children s Coverage: Opportunities and Challenges NCSL Critical Health Areas Project (CHAP) Fall Meeting October 4, 2007 John McInerney Program Manager National Academy for State Health Policy (NASHP)

2 State Children s Health Insurance Program (SCHIP) Reauthorization Unresolved $35 billion, five year SCHIP Reauthorization Bill passed both the House and Senate with bipartisan majority Presidential veto yesterday (October 3) Override of veto unlikely; No clear indication when SCHIP reauthorization will ultimately be completed/resolved

3 What is NASHP? Non-profit, non-partisan policy organization dedicated to achieving excellence in state health policy Have provided assistance to states & reported on SCHIP over the past decade; De-facto home for SCHIP directors Have helped facilitate role of SCHIP directors throughout the reauthorization process SCHIP Comes to Washington /SCHIP director Reauthorization Principles document Serving as information source & sharing director views Working with states trying to cover all children

4 NASHP Web Resources Maintain website devoted entirely to SCHIP:

5 SCHIP s Record Created in 1997 as part of Balanced Budget Act $40 billion, 10 year block grant program Successful federal/state partnership Enhanced match rate (65-85 percent federally financed) 30% higher rate than Medicaid Encouraged state flexibility in program design & administration Achieved increased coverage for low-income children; reduced total percentage of uninsured children

6 Steady Increase in SCHIP Enrollment Number Enrolled, in Millions Number Ever Enrolled in SCHIP FY1998 FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 Source: Center for Medicare and Medicaid Services (CMS)

7 Children s Coverage Bucks Trend Percentage of Population Percentage of Children and All Americans Uninsured, FY99-FY FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 Children (18 and Under) All Americans Source: United States Census Bureau

8 Progress Interrupted.But the rate increased in each of the last two years. Percentage of Population Percentage of Children and All Americans Uninsured, FY99-FY FY1999 FY2000 FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 Source: United States Census Bureau Children (18 and Under) All Americans

9 States Want To Make More Progress Approx. 6 million children remain eligible for SCHIP/Medicaid, but are unenrolled What do states need to continue to move ahead and reach more eligible children? Additional funding is the most critical need

10 State Reauthorization Concerns Important State Issues for Reauthorization: Increase Funding Maintain State Flexibility Improve Funding Formula (current formula penalizes states that are successful at enrolling children) Protect Medicaid Limit Mandates

11 Highlights of Original House & Senate legislation (each passed in early August 2007) House (H.R. 3162) Senate (H.R. 976) Funding $47 billion (would cover 5 million more children) Funding Formula Income eligibility Based on prior year spending or state estimates for FY 2008; prior year spending / federal payments in future years No changes in current rules $35 billion (would cover 4 million more children) FY 2008 based on 110% of the highest of 4 factors; future years based on previous year federal payments to states State option up to 300 percent of poverty Incentives Performance bonuses Incentive bonus pool

12 Additional Highlights of Original House & Senate SCHIP Reauthorization Legislation House (H.R. 3162) Senate (H.R. 976) Citizenship Documentation & Identity Requirements Coverage for Legal Immigrants Budget offsets Cit-doc becomes state option; states must submit to audit Allows coverage for legal immigrant children and pregnant women 44 cent/pack cigarette tax; Medicare Advantage cuts Cit-doc applied to SCHIP; new method to verify citizenship for SCHIP/Medicaid children No coverage for legal immigrant children; maintains 5 year waiting period 61 cent/pack cigarette tax

13 August & Early-September Reauthorization News Compromise was needed... as long as it looked like the Senate bill; House bill might have faced filibuster in Senate CMS August 17 State Health Official anti crowd-out letter States not allowed to cover kids above 250 percent of poverty, unless (among other requirements): State provide evidence that 95 percent of eligible SCHIP/Medicaid children are enrolled Institute a one-year waiting period for children above 250 percent of poverty No Exceptions Several states are filing litigation and/or seeking legislative remedy (Reauthorization legislation attempts to rescind/modify CMS guidelines) Does the letter violate the Administrative Procedures Act?

14 A Deal is Reached On September 21, a compromise bill, the Children s Health Insurance Program Reauthorization Act of 2007 (CHIPRA) was announced; major provisions included: Funding House/Senate H.R. 976 $35 billion; would cover 3.8 million children who would otherwise be uninsured Eligibility Same as original Senate bill--state option up to 300 percent of poverty Formula FY 2008 based on 110% of the highest of 4 factors; future years based primarily on previous year federal payments to states Citizenship Documentation & Identity Requirements Cit-doc applied to SCHIP; new method to verify citizenship for SCHIP/Medicaid children

15 Other Important Provisions of CHIPRA CHIPRA Provisions Mandates Childless Adult Coverage Parents Funding Offsets Mental Health Parity & Dental Coverage No new waivers; phases out childless coverage in SCHIP by FY 2009 No new waivers; grandfathers states with current waivers to cover parents, but reduces match rate (in FY 2010 or FY 2011, depending on child coverage benchmarks being met) Same as original Senate bill 61 cent/pack tobacco tax

16 Congressional Deal; Presidential Veto? CHIPRA passed both the House & Senate last week: in the House in the Senate (veto proof majority) President Bush vetoed the legislation Key Presidential Objections/Criticisms: Too expensive Expands government run health care; crowd-out of private coverage Income eligibility limits too high Legislation doesn t immediately end parental and adult coverage Insufficient safeguards against illegal immigrants gaining coverage

17 What s next? Temporary extension/continuing resolution through November 15 Already signed by President Bush Legislative maneuvering and/or negotiations with Administration Congress has pledged to keep sending CHIPRA to President Possible longer-term (one to two years) extension?

18 Contact Information John McInerney Program Manager National Academy for State Health Policy: CHIP Central: