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Coordinating Medicaid and CHIP

Background Medicaid Expansions Twelve states (including the District of Columbia) have opted to use CHIP funds solely to expand their Medicaid programs. 1 In these states, it is relatively easy to operate a single, unified child health coverage program. Behind the scenes, the state will need to keep track of which children qualify for Medicaid coverage at the regular matching rate versus at the CHIP matching rate, but families need not be involved in this determination. Instead, regardless of the funding source for their coverage, families use the same application and renewal procedures and the same delivery system. This arrangement is, in general, the easiest for families to navigate and requires no cross-program coordination because there is only one program—Medicaid. Research shows that using CHIP funds to expand Medicaid results in higher enrollment, in part because coordination is not an issue. 2 In one study, Medicaid expansions showed enrollment levels 2.7 percentage points higher than combination programs, and 3.3 percentage points higher than separate CHIP programs. 3 In another study, separate programs were associated with take-up rates eight to 10 percentage points lower than those for combined programs. 4 States with combined programs experienced an annual dropout rate of 9.6 percent, compared with 13.9 percent in states with separate programs. 5 Separate CHIP Programs In 39 states, CHIP funds are used to run a separate health insurance program, some in combination with a Medicaid expansion. 6 In these states, there are varied levels of coordination between CHIP and Medicaid. Some states treat the programs as entirely separate, relying on different application and renewal procedures, administrative agencies, and delivery systems. Other states have sought to more closely align and coordinate their two programs. These states, for example, might use the same application and renewal form for Medicaid and their separate CHIP program. Or, they might take steps to ensure that when children become ineligible for Medicaid due to an increase in family income that they are automatically enrolled in the separate CHIP program, and vise-versa. State experience clearly demonstrates that increased coordination between Medicaid and separate CHIP programs yields positive outcomes, such as: Families enroll and retain coverage more easily. In a coordinated system, families do not need to understand the eligibility rules for two programs, submit applications or renewal forms for two programs, or guess which program is the right one for their child; instead, they can submit a single application (or renewal form), which is used “behind the scenes” by the state to place a child in the appropriate program. Such coordination can reduce—or even eliminate—enrollment and service delays. Children stay covered, their health protected. Research is conclusive that stable insurance coverage is key to children’s health. 7 Yet low-income families often experience changes in their income and composition that may affect their eligibility for insurance and, therefore, the stability of their coverage. A system that responds to these shifts by automatically transferring children between Medicaid and a separate CHIP program can help protect children’s health. States have lower costs. A well-coordinated and aligned system also can reduce state costs and administrative hassles by reducing the need for the state to engage in duplicative activities. For example, consider a state that uses different rules in Medicaid versus CHIP when calculating a family’s income (e.g., it might use a gross income test in its separate CHIP program, but apply childcare and work expense disregards to children in Medicaid). Such a state might gather information that reveals a child is ineligible for CHIP only to find that it must approach the family a second time to gather the information needed to evaluate eligibility for Medicaid. If, however, a state has aligned its income counting rules, it can readily gather information from a family only once and then use it to decide if a child should be enrolled in Medicaid or the separate CHIP program. For information on state programs see Facts and Statistics.   Go To Next Section: Legislative Authority Footnotes 1. Kaiser Commission on Medicaid and the Uninsured, see Facts and Statistics. Back 2. K. Kronebusch and B. Elbel, “Simplifying Children’s Medicaid and SCHIP,” Health Affairs, 23: 233-246 (May/June 2004); and B. Sommers, “The Impact of Program Structure on Children’s Disenrollment from Medicaid and SCHIP,” Health Affairs, 24: 1611-1618 (November/December 2005). Back 3. K. Kronebusch and B. Elbel, “Enrolling Children in Public Insurance: SCHIP, Medicaid, and State Implementation,” Journal of Health Politics, Policy, and Law, 29: 451-489 (2004). Back 4. C. Bansak and S. Raphael, “The Effects of State Policy Design Features on Take-UP and Crowd-Out Rates for the State Children’s Health Insurance Program,” Journal of Policy Analysis and Management, 26: 1449-175 (June 2005). Back 5. B. Sommers, “The Impact of Program Structure on Children’s Disenrollment from Medicaid and SCHIP,” Health Affairs, 24: 1611-1618 (November/December 2005). Back 6. op. cit. (1). Back 7. L. Summer and C. Mann, “Instability of Public Health Insurance Coverage For Children And Their Families: Causes, Consequences, and Remedies,” Georgetown University Health Policy Institute (June, 2006); and L. Ku, “New Research Shows Simplifying Medicaid Can Reduce Children’s Hospitalizations,” Center On Budget And Policy Priorities (June, 2007). Back

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