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Coordinating Medicaid and SCHIP

Legislative Authority Federal law allows states to use SCHIP matching funds to expand eligibility in their Medicaid program, to create a fully separate child health program, or to adopt a combination approach. States that opt to establish a separate SCHIP program have broad flexibility under federal law to align and coordinate key elements of their programs, such as administration and oversight of the programs; application and renewal procedures; outreach campaigns; delivery systems; and quality improvement initiatives. And, federal authorities historically have required, or encouraged, states to implement coordination procedures. 1 In states with separate SCHIP programs, some barriers to full coordination remain, but they are relatively minor and usually can be addressed. 2 When establishing SCHIP, federal policymakers were mindful that the new initiative built upon the Medicaid program. In response, they required states to describe how they would coordinate their new SCHIP programs with existing sources of coverage, including Medicaid. 3 They were sufficiently concerned about Medicaid-eligible children being erroneously placed in SCHIP, that they included a “screen and enroll” requirement in the SCHIP statute. Under this requirement, states with separate SCHIP programs must screen all applying children for Medicaid eligibility and, if appropriate, enroll them in Medicaid. States must also assist families in applying for SCHIP if their child applies for Medicaid and is not eligible. 4 The effectiveness of these "screen and enroll" provisions depends on the level of coordination between programs. If, for example, both programs use the same income, asset and deduction rules,  workers can more easily determine eligibility for either program.   Go To Next Section: Strategies Footnotes 1. Centers for Medicare and Medicaid Services, "Continuing the Progress: Enrolling and Retaining Families and Children in Health Care Coverage," (August 2001). Back 2. For example, in its August 17th, 2007 guidance to states, the Centers for Medicare and Medicaid Services required states seeking to cover children at 250 percent of the federal poverty level through SCHIP to use a gross income test when evaluating eligibility. As a result, such a state cannot fully align its SCHIP income counting rules with Medicaid, which, under federal law, relies on a net income test. Back 3. 42 CFR 457.80. Back 4. 42 CFR 457.350. Back

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