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Study: Improving Retention in SCHIP and Medicaid Would Lower Number of Uninsured Children

By Susannah Crepet, CQ Staff

July 30, 2007 – Retaining children enrolled in Medicaid and the State Children's Health Insurance Program would reduce, by one-third, the number of uninsured children in the United States, according to a new Health Affairs study.

One-third of all children who were uninsured in 2006 had lost SCHIP or Medicaid coverage in the previous year, the study found. Simplifying the renewal process is one way to keep eligible children enrolled, according to the study, which used newly revised data from the U.S. Census Bureau's Current Population Survey.

According to Benjamin Sommers, study author, the instance of eligible but uninsured "dropouts" varies from state to state. For example, dropout rates in Delaware and New York are higher than the rest of the country, suggesting that many eligible children in these states are uninsured but were once enrolled in a program, while dropout rates in Colorado and Utah are lower, suggesting that many eligible children in these states are uninsured as a result of poor program "take-up," he said.

The variation in dropout rates may be because of a few different factors. According to Sommers, "states took steps that intentionally or unintentionally exacerbated dropout." For example, "several states have responded to budget difficulties by making the renewal process more cumbersome or by increasing SCHIP premiums, both of which may exacerbate dropout," Sommers said in a press release.

Sommers also noted "the majority of states have established separate SCHIP programs, rather than using SCHIP funds to expand their existing Medicaid programs." According to the press release, 33 states administered separate programs, as of 2000, and since then, three more states have launched separate programs. "Running a separate [SCHIP] program—a more complex administrative structure—has been linked to significantly higher dropout rates," Sommers said.

The percentage of uninsured children eligible for public coverage who had lost coverage in the previous year rose from 27 percent in 2001 to 42 percent in 2006, according to the study. The problem of dropout from Medicaid and SCHIP is getting worse, especially in response to the new 2006 federal requirement of increased citizenship documentation for Medicaid renewal, which already seems to be causing public coverage to decrease, Sommers said.

According to Sommers, simplifying the Medicaid and SCHIP renewal processes would be a way for policy makers to reduce the dropout rates. In addition, states currently administering separate SCHIP and Medicaid programs might consider integrating the two into a combined program, he said.

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