CHIP likely to seek family coverage, stress retention

While the future of the state Children’s Health Insurance Program (CHIP) will be decided to some degree by political considerations over the next five to 10 years, policy analysts interviewed by State Health Watch identified some clear indications for future direction, including a move toward family coverage and a greater emphasis on improving the prospects for retaining enrollees.

Jocelyn Guyer, analyst for the Center for Budget and Policy Priorities in Washington, DC, sees continuing state efforts to move from coverage just for children to coverage for families.

"Research has shown that when you cover parents, it facilitates enrollment of kids," she tells SHW. "And Health and Human Services Secretary Tommy Thompson is clear that the most important thing you can do to improve children’s coverage is to enroll their parents."

Ms. Guyer cites experiences in Missouri and New Jersey that support the notion. "When Missouri just covered kids, they had only some success, even with outreach efforts. But when they extended coverage to parents, enrollment shot up. The same thing happened in New Jersey."

Colleen Sonosky, assistant director with the Center for Health Services Research and Policy (CHSRP) at George Washington University in Washington, DC, tells SHW she also sees CHIP growing over the next five years, noting there will be waiver requests for more family coverage.

"I’m not sure if there will be a legislative change, but states will try to do a lot through the waiver process to include more families. It’s going to grow," she says.

Tied to the notion of family coverage is an effort to make CHIP work better with employer-based coverage. According to Ms. Guyer, "It’s hard now [to bring the two types of coverage together] because only kids can be covered. States only can use CHIP funds to help families purchase employer-based coverage if it is cost-effective — that is if the employer-based family coverage costs less than covering just the children under CHIP."

Another element of the program Ms. Guyer says is ripe for attention is retention of coverage for children once they are enrolled.

"States and advocates have been focused on signing children up," she explains.

"Now they’re beginning to realize that’s only half the job. They’re seeing that a lot of the positive changes that have been made at the front end [to facilitate increased enrollment] need to be applied to retention," Ms. Guyer points out. "More conferences have been focusing on the retention problem that’s arisen because states and advocates understandably were working most on enrollment. Reforms like simplified applications have not been carried over to retention."

Ms. Guyer says the problem with retention can be seen in the experience of one state where families that are up for renewal simply reapply because the forms for retention are so complicated compared to those for an initial application.

CHIP funding also is on the minds of policy analysts. Ms. Guyer says that what happens with the nation’s economy will affect the program.

"If there’s a recession, that will be new territory for CHIP because it’s not an entitlement. It’s not clear how states will deal with it in a less friendly fiscal environment," she says.

Within the next five to 10 years, Ms. Guyer says, the whole public policy issue of a financing mechanism for CHIP should be addressed because it is becoming clear that some states need more money than they are receiving, and others need less.

"The current reallocation process is very political. It’s hard to move money around to meet the need. We need to figure a better system to have funds flow to the states that can use them," she adds.

Will the basic program structure be changed? CHSRP’s Anne Markus, senior research scientist, says that’s a possibility since during the last campaign, President Bush indicated an interest in moving the program to a block grant, consistent with early discussions when it was being designed.

For states that have expanded Medicaid to cover more children, there could be serious implications in the block grant approach unless changes were made to Medicaid.

Ms. Markus predicts that if states were given more flexibility in program design, they would use that power to make their children’s health insurance program look more like commercial programs than like the "very generous" Medicaid program.

Support for greater state flexibility has been voiced by the National Governors Association, Ms. Sonosky says. "They’ve been lobbying for changes in Medicaid and CHIP so that states would be given the money to work with."

She says that while efforts could be made through legislation or regulations to establish standards for purchasing services through managed care, it is not likely that issue will be taken up because it would not lead to greater state flexibility.

More outreach needed

Ms. Markus says attention should be paid to the need for more outreach efforts to enroll children in insurance programs. "There are still a lot of kids eligible who are not enrolling, and we need more outstationing and other outreach activities."

Since CHIP was established for 10 years and the program is currently in the fourth year, Ms. Sonosky says it’s hard to tell what will happen when authorization runs out. "I don’t think states could continue it on their own," she says.

"They would need federal money to help them continue. Such a large investment has been made already that I hope they don’t terminate it after 10 years. CHIP is linked to what happens to Medicaid. Policies for each affect the other," Ms. Sonosky explains.

[Contact Jocelyn Guyer at (202) 408-1080, Colleen Sonosky at (202) 530-2305, and Anne Markus at (202) 530-2339.]