Aug. 14, 2007
12:01 a.m. Eastern Time
States That Offer Generous Medicaid Coverage Of Children Should Be Allowed To Cover Young Adults Through SCHIP, Says Leading Expert On Program
In Third Paper In Health Affairs Series On SCHIP, Rosenbaum Notes Declining Coverage For Young Adults, New State Medicaid Flexibility In Covering Children
Bethesda, MD -- States should be allowed to cover young childless adults through the State Children’s Health Insurance Program if they extend their Medicaid programs to cover low-to-moderate-income children, a leading expert on SCHIP argues in a paper released today on the Health Affairs Web site. http://content.healthaffairs.org/cgi/content/abstract/hlthaff.26.5.w608
“Despite objections by the Bush administration and some members of Congress, it is uninsured adults, not children, who experience the most serious coverage deficits where federal financing options are concerned,” writes Sara Rosenbaum, the Hirsh Professor of Health Law and Policy at the George Washington University School of Public Health and Health Services. More than ten million young adults ages 19-26 were uninsured in 2006, “an astonishing” uninsurance rate of 33.2 percent.
“It is easy to say that using SCHIP to cover adults is contrary to the interests of children,” but this argument “ignores the essential interaction between Medicaid and SCHIP policy,” Rosenbaum says. In her paper, the third in a Health Affairs series on SCHIP, she points out that the SCHIP reauthorization debate provides the opportunity to reassess the program in light of developments in Medicaid policy and trends in coverage rates for different groups within the population.
The Deficit Reduction Act Of 2005
Altered The SCHIP-Medicaid Relationship
Rosenbaum observes that the SCHIP-Medicaid interaction was significantly changed by the increased flexibility Congress gave to state Medicaid programs in the Deficit Reduction Act (DRA) of 2005. When Congress first enacted SCHIP ten years ago, establishing a SCHIP program separate from Medicaid was the only way a state could employ market-based mechanisms to insure nonpoor but low-income children -- those in families with incomes above 100 percent of the federal poverty level but below the greater of 200 percent of poverty, or fifty percentage points higher than the state’s Medicaid eligibility threshold. Unlike Medicaid, SCHIP coverage was tied to actuarial value and “benchmarked” to commercially available policies, not based on statutorily mandated benefits such as Medicaid’s Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit, “the most comprehensive pediatric coverage standard ever codified in law.”
However, the DRA established SCHIP’s “benchmark” approach as a state Medicaid coverage option, making it available to all low-income children, not just those in separate SCHIP programs. “Under the DRA option, Medicaid ‘benchmark’ states must continue to supplement benchmark coverage with EPSDT benefits that are not part of the benchmark,” but “the DRA formally encourages commercial insurance purchasing, with EPSDT as a ‘wraparound’ (in DRA parlance) to ensure appropriate coverage for children who need additional assistance,” Rosenbaum explains.
Creating A New SCHIP Option For States
When this new DRA benchmarking option is added to traditional ways in which states may reach low- and moderate-income children through Medicaid, “augmenting states’ SCHIP flexibility to include the young adult subpopulation would make sense,” Rosenbaum says. “For example, were a state willing to use its Medicaid expansion options to increase Medicaid eligibility levels for these children (for example, up to 300 percent of poverty), to adopt streamlined enrollment and coverage continuity practices, and to offer either traditional coverage or coverage via a DRA-sanctioned benchmark plan with an EPSDT wraparound, there would appear to be no reason why the state should be prevented from reaching young adults, especially those with special needs.
“Congress should formalize this type of arrangement as an additional SCHIP option,” Rosenbaum states. Although states may reach other groups, such as pregnant women and parents, through Medicare, currently states’ ability to reach young adults without a waiver ends at age twenty-one. “At this point, young adults become especially vulnerable because they lack any attachment to a source of federally subsidized insurance,” she says.
ABOUT HEALTH AFFAIRS:
Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.
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