Medicaid and SCHIP Coverage: Findings from California and North Carolina

By Kenney, Genevieve; Rubenstein, Jamie et al. | Health Care Financing Review, Fall 2007 | Go to article overview

Medicaid and SCHIP Coverage: Findings from California and North Carolina


Kenney, Genevieve, Rubenstein, Jamie, Sommers, Anna, Zuckerman, Stephen, Blavin, Fredric, Health Care Financing Review


INTRODUCTION

A number of recent studies have examined access and use experiences of children enrolled in SCHIP. These studies consistently show that SCHIP enrollment improves access to and receipt of care for children who enroll in SCHIP. Other studies have examined the extent to which SCHIP is substituting for ESI (Allison et al., 2003; Hughes, Angeles, and Stilling, 2002; Sommers et al., 2007), finding that a small percentage of children transfer directly from private coverage to SCHIP.

In contrast, less research has been conducted recently on Medicaid Programs for children. It is important to examine access issues under Medicaid, which covers 25 million children (Kaiser Commission on Medicaid and the Uninsured, 2006). Medicaid is also the most important source of coverage to poor children in this country, insuring close to 60 percent living below the Federal poverty level (FPL).

There have been ongoing concerns about access to care under Medicaid related to low payment to providers and other factors. However, past studies have found that Medicaid enrollees fare better than their uninsured counterparts and that they enjoy better access than low-income children with private coverage in some service areas because of the broader benefits and narrower cost-sharing requirements in Medicaid.

Historically, substitution of public for private coverage has been far less of a concern within the Medicaid Program than within SCHIP. While SCHIP legislation mandates that States implement policies to discourage substitution at enrollment, no such mandate exists for Medicaid. For example, children eligible for Medicaid and covered by employer insurance are not required to fulfill waiting periods before enrollment. (1) Previous research has found some evidence of substitution for private coverage by the Medicaid Program--referred to as crowd-out (Blumberg, Dubay, and Norton, 2000; Cutler and Gruber, 1997; Dubay and Kenney, 1996).

Here we examine parental coverage patterns and access to care for children enrolled in Medicaid and SCHIP, and we assess impacts of Medicaid enrollment for children in California and North Carolina. (2) This analysis was done as part of a congressionally mandated evaluation of SCHIP that examined 10 States that included supplemental analysis of Medicaid Programs for children in 2 States. California and North Carolina were selected for the supplemental Medicaid study because they each have a major separate SCHIP component, which provides a contrast between the programs, and because they both had enrollment files that could support the study. (3,4)

Table 1 shows how SCHIP differs from Medicaid along several programmatic dimensions in these two States. As mentioned previously, both States have separate non-Medicaid SCHIPs under Title XXI: Healthy Families (California) and Healthy Choice (North Carolina). In both States, children's enrollment in Medicaid far exceeds enrollment in SCHIP. (5)

Medicaid has more generous income eligibility thresholds for infants and children under age 6 than for school-age children. For example, Medicaid income eligibility thresholds for infants are 200 percent of the FPL in California, and 185 percent in North Carolina, 133 percent for age 1-5, and 100 percent for age 6-18 (under Medicaid, States must cover children under 6 up to 133 percent of the FPL and children 6-18 up to 100 percent of the FPL). In contrast, SCHIP income eligibility thresholds are 250 and 200 percent for children of all ages in California and North Carolina, respectively. In both States, Medicaid and SCHIP service delivery systems are different from one another--in North Carolina, SCHIP relies on a Blue Cross[R]/Blue Shield[R] network which includes different providers than under Medicaid, and in California, Medicaid and SCHIP contract with different managed care plans (Hawkes and Howell, 2002; Hill and Hawkes, 2002; Hill, Harrington, and Hawkes, 2004). …

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