February 1, 2000
Making the Link:
Strategies for Coordinating Publicly Funded Health Care Coverage for Children
by Cindy Mann, Donna Cohen Ross, Laura Cox
Table of Contents
In 1997 Congress enacted the State Children's Health Insurance Program (SCHIP), offering States over $40 billion in Federal matching funds to provide health care coverage to low-income uninsured children. The law allows States to use their Federal SCHIP funds to cover children who were not already eligible for Medicaid by either expanding Medicaid, creating a separate child health program, or adopting a combination of these two approaches. By August 1999, 27 States had Federal approval to expand coverage for children through a separate child health program, either exclusively or in combination with a Medicaid expansion. Each of these States, as well as those that create separate child health programs in the future, needs to devise strategies for coordinating the new coverage program with Medicaid. This report discusses some administrative strategies that could promote coordination.
Coordination between Medicaid and separate SCHIP-funded programs allows States with two child health programs to create one coverage system. It provides many advantages.
Coordination helps prevent children from falling through the cracks in the event that their parents apply to the wrong program. Congress specifically required States that use their SCHIP funds to create separate child health programs to screen all children applying for coverage for Medicaid eligibility and to devise systems to enroll Medicaid-eligible children in Medicaid. (This Federal requirement has become known as "screen and enroll.")
The screen-and-enroll requirement could help boost enrollment by assuring that families are able to enroll their children in either Medicaid or without having to navigate two separate application processes. Burdensome application procedures have been shown to be major barriers to enrollment. In a well-coordinated system, one application process serves all children, and the decision about the appropriate program or funding source for a particular child is made behind the scenes.
The screen-and-enroll requirement also helps to maximize the number of children who will gain coverage as a result of the SCHIP initiative. Without effective screening, Medicaid-eligible children may be inappropriately covered with SCHIP funds. In that case, fewer newly eligible children would be covered as a result of the SCHIP initiative since Federal SCHIP funds are capped. Coordination procedures assure that children who are eligible for regular Medicaid matching payments do not take up an SCHIP health insurance "slot."
Coordination at the enrollment stage also helps to ensure that Medicaid-eligible children receive the applicable benefits and cost-sharing protections. In States where the SCHIP benefit package is limited, children who are Medicaid eligible but mistakenly enrolled in the separate SCHIP program may not be able to access the medical services they need. They might also be subject to premiums or copayments that are difficult for their families.
The need for coordination extends beyond the enrollment stage. Effective coordination assures that children retain coverage as long as they are eligible for either coverage option. Fluctuations in income and changes in family circumstances can make children ineligible for the program in which they are enrolled but eligible for the other program. This can result in the loss of coverage and disrupt continuity of care unless systems are in place to assure smooth transitions between coverage programs.
While the benefits of coordination are clear, developing effective coordination strategies can be challenging, particularly if a State creates a separate SCHIP-funded program that looks and operates very differently from the way that Medicaid has traditionally operated in that State. There is no one right way to coordinate child health programs. However, States appear to have had the most success when they have streamlined their Medicaid application procedures so that they can coordinate enrollment and make the application process simple and accessible for the families of all children. Coordination is also easier when States align program rules, service delivery systems, and redetermination procedures as far as possible. States that take these steps are likely to be better able to create relatively seamless systems of coverage without adopting complicated coordination strategies that are difficult and costly to administer.
Some of the key strategies that promote coordination are listed below and discussed in detail in the full report along with specific State examples. States could adopt most of these strategies without making major changes in the way they have set up their SCHIP-funded coverage; some strategies would require more significant modifications. Although no one strategy is essential and no one strategy is sufficient to assure that a State's system is well coordinated, State practice has shown that these strategies can make it easier for States to assure that paperwork burdens, inconsistent program requirements, and problems with interagency coordination do not keep eligible children from benefiting from SCHIP and Medicaid.
Administrative Strategies That Could Promote Coordination One program/one name. Many of the challenges of coordination can be avoided if Medicaid and SCHIP coverage options are blended into one program. Under this approach, coverage is financed through Medicaid for some children and through SCHIP for others, but all children are served by the same State-created program. Several States have adopted variations of this approach. (In some States, the SCHIP component is known as a "Medicaid look-alike.") Typically, different rules relating to benefits, cost-sharing, and entitlement apply to the two groups of children but distinctions in policies and procedures are kept to a minimum. One agency to determine eligibility. Even if SCHIP and Medicaid operate as two distinct programs, coordination is simpler if one agency determines eligibility for both Medicaid and SCHIP. When one agency determines eligibility, applications do not have to be passed between agencies (or between a public agency and a private entity) in order for final eligibility determinations to be made. Some States that rely on separate entities to determine eligibility for the two programs have eligibility workers for both entities at the same site or have implemented systems for electronic transfer of applications and supporting documents to avoid delays and other problems that can arise. Simplified joint application and single point of entry. Most States have recognized the value of using a joint application and single point of entry for Medicaid and SCHIP. Under this approach, one application serves both programs, and one entity receives all the applications and screens them to determine if the child appears to be eligible for Medicaid or the separate SCHIP program. Applications are then sent to the appropriate entity for a final eligibility determination. Almost all States with a separate SCHIP program are using or are planning to use a joint application. Verification requirements simplified and the same for both programs. Streamlined verification requirements that apply to both programs reduce paperwork burdens for families and for administering agencies. With the same verification requirements for both programs, States that are trying to coordinate enrollment do not need to devise systems to alert families to different verification requirements, and families do not have to supply additional documents if their children are screened and identified as likely to be eligible for Medicaid. Federal law accords States broad flexibility to devise streamlined verification rules for both Medicaid and separate SCHIP-funded programs. A growing number of States have taken advantage of this flexibility and eased verification requirements for all children. Easy transitions when eligibility is redetermined. Many States are just beginning to focus on ways to coordinate eligibility reviews so that children can retain coverage as long as they are eligible for either program. Some States have already developed a simplified mail-in system for reviewing eligibility that screens children who become ineligible for one program and, when appropriate, automatically enrolls them in the other program without a separate application or a lapse in coverage. Common service delivery system. If the programs use the same plans and providers, children who move from one program to another will not have to switch providers or plans. Unnecessary disruptions for families, providers, and managed care plans are avoided.
Program Rules That Could Promote Coordination Age-based eligibility rules ended. There are many reasons States might consider dropping age-based eligibility rules that prevent some families from enrolling all of their children in the same program. Age-based standards can complicate enrollment procedures and redeterminations and require some children to transfer from one program to another even when their family circumstances have not changed. Although many States have limited or eliminated such age-based "staircase" eligibility, some have not. States can take advantage of the enhanced matching payments under SCHIP to eliminate or limit age-based eligibility standards in their Medicaid program and simplify their eligibility rules. Income and asset rules aligned. The screening process is likely to be more complicated and error prone when the two programs use different rules to compute a family's countable income. States have broad flexibility to devise SCHIP rules that are similar to Medicaid rules. They also have some flexibility to revamp their Medicaid rules so that screening and eligibility determinations (and redeterminations) can be accomplished through the same or similar income calculations. In both SCHIP and Medicaid, States have the flexibility to drop asset rules or use the same rules for both programs. Different asset rules add another layer of complexity to the screening process. In addition, since States with asset rules generally require applicants to verify assets, asset rules tend to add to the paperwork requirements for families and agencies. Most States disregard assets in both programs. Continuous eligibility. "Continuous eligibility" is an option available under both SCHIP and Medicaid that allows children to retain coverage for a period of time regardless of changes in family circumstances. By adopting continuous eligibility in both programs, States could limit the occasions when children will need to move from one program to the other.
Effective coordination strategies connect children to the coverage option that is appropriate for them without creating complex systems that are difficult for families to navigate and States to administer. The key to effective coordination, as demonstrated by State practices, is to simplify procedures for both programs, align program rules and service delivery systems to the extent possible, and make the decisions about which coverage option is appropriate behind the scenes, with as little cross-agency exchange as possible. Such strategies could ease administrative burdens for States and are likely to boost enrollment among Medicaid-eligible and SCHIP-eligible children alike.
Beginning in 1997, with the enactment of the State Children's Health Insurance Program (SCHIP), more than $40 billion in Federal funds became available to States over a 10-year period to expand health coverage to uninsured low-income children. These funds have sparked major new State initiatives, along with the expectation that as many as five million uninsured children will gain coverage.
The Federal SCHIP law offers States the option of using SCHIP funds to expand coverage for children through Medicaid, through separate State child health programs, or through a combination of these approaches. As of August 1999, more than half of all the States had Federal approval to expand coverage, either through a separate child health program or through a child health program combined with a Medicaid expansion. Regardless of the program design, States need to devise policies and procedures to coordinate enrollment and transitions between Medicaid and their separate SCHIP-funded child health programs.
This report reviews various strategies States have used to coordinate their child health programs and identifies policies and procedures that promote coordination between separate SCHIP-funded child health programs and Medicaid. While there is no one way or right way to coordinate child coverage programs, State practice in this area demonstrates that certain strategies make it easier for States to assure that children are enrolled and able to remain covered as long as they are eligible for any coverage program.
Congress recognized the importance of establishing links between the new SCHIP-funded programs and existing systems for providing coverage to children. The Federal SCHIP law specifically directs States to screen all children applying for coverage to determine whether they are Medicaid eligible and, if so, to enroll them in Medicaid.1 Effective coordination between Medicaid and separate SCHIP-funded programs helps States meet their enrollment goals by preventing uninsured children from falling through the cracks of a dual-program system. In a coordinated system, families do not need to anticipate which is the right program for their children or navigate two application processes in order to obtain or maintain coverage for their children. Effective coordination also maximizes the dollars available to cover children by assuring that only newly eligible children are covered with SCHIP dollars.
Although the Federal coordination requirement promotes enrollment of eligible children, it can create some tensions for States. States are required to coordinate their separate SCHIP-funded program with Medicaid, but the Federal law accords them broad flexibility to use their SCHIP funds to create separate child health programs that may look and operate very differently from traditional Medicaid programs. Despite this apparent conflict, however, many States appear to have achieved a significant degree of coordination, at least at the initial enrollment stage. In part, this is because the need to coordinate has prompted States to reexamine their Medicaid policies and simplify their Medicaid application procedures. States that have revamped their Medicaid procedures, eliminated unnecessary paperwork, and dispensed with burdensome verification requirements have been able to coordinate enrollment procedures between Medicaid and their separate SCHIP program and at the same time make the enrollment process easier.
Coordinating SCHIP and Medicaid Has Led to Medicaid Changes
The application procedures in Florida's Medicaid program have been revised substantially, in large part as a result of the need to coordinate enrollment between Florida's Healthy Kids program and Medicaid. This description of the changes is excerpted by permission from the Florida Healthy Kids Corporation annual report, Healthy Kids 1999 (www.healthykids.org/html/com_annual.html).
The Medicaid Eligibility Process Reborn
Prior to 1998, the processing time for determining Medicaid eligibility for children included two personal visits to the local social service office, with numerous pieces of unnecessary documentation, for a face-to-face personal interview lasting on average 90 minutes, during which all members of the family were reviewed for a litany of programs whether the family wanted them or not. The process was difficult for the family and time consuming.
With its initial State plan to implement a CHIP program, the [Healthy Kids] corporation proposed changes to its operations which have had far-reaching effects. To meet the Federal requirement that CHIP programs screen and refer all applicants for potential Medicaid eligibility, the corporation and the Florida Department of Children and Families entered into a joint venture. The changes effected were as follows:
The Department of Children and Families installed terminals with access to the Medicaid Eligibility system on the [Healthy Kids] corporation's premises. Eligibility staff of the State agency were plucked from their social service environment and given instructions to "think differently, find a way to make this easy for families."
The Healthy Kids single-page application form was modified to facilitate its use as an application for Medicaid as well. This would enable families to complete one form and qualify for either program.
The [Healthy Kids] corporation developed an electronic tool which reviews household size and gross monthly income and assumes certain income disregards. Those children that appear to be likely candidates for the Medicaid program are referred to Medicaid eligibility workers for a full determination.
The co-location of agencies relieves the family from any additional action on their part. Mail-in applications, when referred [to Medicaid] are simply walked over and handed over to Medicaid eligibility staff.
The new process involves a single page, mailed-in form, which requires only 15 minutes for the eligibility worker to perform the eligibility process for all of the children in the family. Redeterminations are also handled via the mail.
Importance of Coordination
Coordination prevents problems that otherwise might occur in a State with two child health coverage programs. Effective coordination assures that parents will not have to navigate two enrollment procedures in order to find the right program for their children and prevents children whose parents apply to the wrong program from falling through the cracks and losing out on coverage.
It is not easy for families to accurately predict whether a child is eligible for Medicaid or for coverage under a separate State program. When a State sets up a separate child health program with SCHIP funds, many of the families of children who are covered under that program have income and/or assets that are just above Medicaid eligibility thresholds. Moreover, many low-income parents, like the public at large, believe that families must be on welfare to receive Medicaid and are not aware that many children in low-income working households are eligible for Medicaid (Perry, Stark, and Valdez, 1998; Shuptrine and McKenzie, 1996).
Differences in program rules that are not apparent to families can add to the confusion. Consider the State of Maine. Maine's Medicaid program covers children with income up to 150 percent of the Federal poverty line. Children over age 1 with income above that standard but below 185 percent of the poverty line are covered under "Cub Care," Maine's SCHIP-funded child health program. However, while Medicaid applies certain deductions to determine a child's eligibility, Cub Care looks at gross income (i.e., no deductions are allowed).
Families in Maine with income above 150 percent of poverty might assume that their children are eligible for Cub Care, but when deductions (for example, child care expenses) are applied, it will often turn out that the children are eligible for Medicaid. For example, consider a two-parent family in Maine with two children, ages 2 and 4, and gross monthly earnings (before deductions) of $2,467 (equivalent to 180 percent of the Federal poverty line). If this family has two earners and child care expenses of $175 a month for each child, the family's countable or net income is $1,937, the equivalent of 141 percent of the poverty line. The children in this family would be eligible for Medicaid, not Cub Care.
The Federal SCHIP law requires States to develop systems that address this issue. A child in Maine whose parent applies for Cub Care should not be denied coverage and left uninsured if it turns out that the child is eligible for Medicaid, and families should not have to make their way through two separate application procedures. The law specifically directs States to screen all children who apply for coverage through the SCHIP-funded program and devise procedures to enroll children in Medicaid if they are eligible for it. (This requirement has become known as "screen and enroll.") Without effective procedures to screen and enroll, a Medicaid-eligible child whose family applies for coverage under the separate SCHIP program either would be turned away (and possibly left uninsured) or inappropriately enrolled in the separate SCHIP program. Both results raise concerns.
If Medicaid-eligible children whose parents mistakenly apply to the wrong program are turned away, an important opportunity to provide coverage to an eligible uninsured child will have been lost. Estimates vary, but analysts generally agree that the number of children who are eligible for Medicaid but not enrolled is substantial. Depending on which estimate is used, Medicaid-eligible but unenrolled children account for 21 percent to 45 percent of all uninsured children.2
Coordination Can Prevent Children From Losing Out on Coverage
Prior to the Federal SCHIP law, Pennsylvania provided coverage to children in families whose incomes were above the State's Medicaid standards through its State-funded Child Health Insurance Program (SCHIP). If parents applied to SCHIP but the children were eligible for Medicaid, they were referred to Medicaid. But no system was in place to assure enrollment. This family's story, presented through testimony at a public hearing in Philadelphia in 1997, shows that a referral process is often insufficient to assure coverage for eligible children.
Ana G., her husband, their 3-year-old son and 1-year-old twins moved to Pennsylvania in July 1997 so that Mr. G. could get a better job. Mr. G. found work as a carpenter and has fluctuating income. Ms. G. is unemployed and cares for the children. The twins both have a serious disability requiring medical care, but the family had no health insurance.
The family applied for Medicaid for their children soon after they moved to Pennsylvania. Coverage was denied because the family could not meet the agency's request to verify their income for the period before they moved. Ms. G. then applied under the State SCHIP program, but coverage was denied because the family's income was too low for SCHIP. The family was referred to Medicaid. Ms. G. returned to the Medicaid office but was denied again, this time because Mr. G. had worked overtime so the family was over the income limit for Medicaid that month. The family was referred to SCHIP.
It took more than 5 months and the intervention of a community group involved in outreach for the children to gain coverage. Pennsylvania has changed many of its procedures since the Federal SCHIP law was adopted and plans to implement more changes that would further promote coordination.
Alternatively, if Medicaid-eligible children are not turned away but incorrectly enrolled in the separate SCHIP program, opportunities to insure children could be lost. Since Federal SCHIP funds are capped, only a finite number of children can be covered with SCHIP funds. Enrolling a child who could receive coverage under Medicaid in the separate program takes up a health insurance slot that could be used to cover a child who is not eligible for Medicaid. Currently, State SCHIP spending is low relative to available dollars. However, in future years, when enrollment rises, Federal caps may prompt States to freeze enrollment, roll back eligibility standards, or reduce the scope of benefits provided to eligible children in their separate SCHIP-funded program.3 Enrolling Medicaid-eligible children in the separate program could hasten the need to take such steps.
Moreover, if Medicaid-eligible children are not properly screened and are enrolled in a separate State program, they may face benefit restrictions and/or cost-sharing requirements that would not apply to them under Medicaid. In many States, the benefits available under separate SCHIP-funded programs are the same or similar to benefits available in Medicaid, but in some States the scope of certain benefits differs substantially (Fox, McManus, Graham, et al., 1998; Fox, Graham, McManus, et al., 1999). In addition, most States have adopted cost-sharing requirements in their separate State programs that were not intended to be paid by lower income families with Medicaid-eligible children. If families cannot afford these costs, they may not enroll their children or they may drop coverage or refrain from using needed health services.
Coordination also is important because it could boost participation rates among SCHIP-eligible children. If children are found ineligible for Medicaid, coordination strategies should assure that they are automatically considered for SCHIP and, if eligible, enrolled without a new application.
In addition, coordination is needed to assure that eligible children retain coverage as long as they are eligible for either program. Changes in family circumstances that can affect eligibility for coverage, such as a new job, the loss of a job, marriage, or separation, can result in changes in family income and often cause children to lose eligibility for one program but become eligible for the other. Without an effective transition system, many eligible children could lose or suffer a gap in coverage.
What a Coordinated System Looks Like
There is no one way to assure coordination between a State's Medicaid and SCHIP-funded separate program.4 Many factors affect a State's approach to coordination. For example, coordination strategies are likely to vary depending on whether a State's Medicaid program is State run or county run and whether its separate SCHIP-funded program is managed by a public agency or a private contractor.
While there is no right way to achieve coordination, coordinated systems are likely to share certain characteristics.
They are simple for families to navigate. Families would be able to enroll their children without having to figure out the program for which their children are eligible and without having to provide application forms and other documents to multiple agencies. Decisions about which program or funding source is appropriate for a particular child are made behind the scenes.
They are simple for States to administer. Agencies or private companies managing the programs are able to use one set of rules to determine eligibility for both programs. Complex systems would not be needed to determine eligibility and enroll children into the appropriate program.
They allow automatic transitions from one program to another. Changes in family circumstances that make a child ineligible for one program but eligible for the other do not cause either the loss of coverage or a change in providers.
They maximize available funding so that the greatest number of children can be served. Coverage for SCHIP-eligible children would be paid for with SCHIP funds, and coverage for Medicaid-eligible children would be paid for with Medicaid funds.
Strategies That Promote Coordination
A review of State policies and practices suggests that certain strategies can promote coordination and simplify administration for States with two child health programs. States can adopt most of these strategies without making major changes in their child health programs. Other changes might require more significant administrative and programmatic adjustments. No one strategy is essential to a coordinated system, and no one strategy is sufficient to assure a well-coordinated system. For example, States that use the same name for their SCHIP and Medicaid programs might have an easier time coordinating coverage, but a single name does not assure coordination, nor do different names necessarily mean that coverage cannot be well coordinated. Strategies that could promote coordination are listed here.
One program/one name. SCHIP and Medicaid essentially operate as one program with one name. A unified outreach strategy is used to market coverage options.
One agency to determine eligibility. Eligibility for both programs is done by the same agency.
Simplified joint application and single point of entry. A simplified joint application is used for both programs. Additionally there is a single point of entry into coverage; that is, one agency or private entity receives all applications and screens them to determine if children appear to be eligible for coverage under Medicaid or the separate SCHIP program.
All applications forwarded to the proper agency. "Opt-in" and "opt-out" choices, which tend to be confusing to applicants, are eliminated. All applications are automatically forwarded to the appropriate agency or private entity for a final determination of eligibility.
Age-based eligibility rules ended. Age-based eligibility rules for children are eliminated so that children in the same family are eligible for the same program.
Verification requirements simplified and the same for both programs. Both programs rely on the same streamlined verification requirements.
Income and asset rules aligned. Both programs use the same rules to calculate financial eligibility.
Easy transitions when eligibility is redetermined. Both programs adopt eligibility review systems (redetermination procedures) in which children who become ineligible for one program are automatically screened for the other program and enrolled, when appropriate, without having to reapply.
Continuous eligibility. Both programs allow continuous eligibility, so that children can retain coverage for a specified period regardless of changes in family circumstances.
Common service delivery system. Both programs use the same health care plans and providers so that children who transfer from one program to the other can continue to be cared for by the same provider.
Each of these strategies is discussed in the following sections. Within each section, specific policies and procedures that have been implemented by States are identified. In addition, at the end of this report, the systems for coordinating enrollment and eligibility reviews that have been adopted by five States are described more fully in order to present a picture of how these policies and procedures fit together in a given State and to present a range of State approaches to coordination.
One Program/One Name
Many of the issues involved in coordinating enrollment between programs can be avoided to the extent that a State successfully merges its Medicaid and SCHIP-funded coverage into one program. Massachusetts and Oregon have developed similar models for this coordination strategy.
Massachusetts uses its SCHIP funds to provide coverage for children whose family income makes them ineligible for Medicaid. But children eligible for SCHIP-funded coverage and children eligible for Medicaid are covered under the same program, known as "MassHealth" (described fully in a later section). The screen-and-enroll process is done behind the scene as part of the initial financial eligibility determination for MassHealth. The child's family income will determine whether coverage is funded with SCHIP or with Medicaid funds. No special or additional mechanisms need to be put into place to enroll children into the appropriate program.
This level of seamlessness has benefits beyond the enrollment stage. For example, a child whose family income changes after enrollment in MassHealth remains eligible for MassHealth as long as his or her family income is below the MassHealth eligibility standards. The child need not be transferred between Medicaid and a separate SCHIP-funded program, even though the funding source for that child's coverage may change.
Oregon has a similar system. Oregon uses its SCHIP funds to cover children who are not eligible for Medicaid, but the SCHIP-funded and Medicaid-funded children are covered under one program, called the Oregon Health Plan.5 When the State agency calculates a child's family income to determine (or redetermine) whether the child is eligible for the Oregon Health Plan, it also decides whether the cost of coverage will be charged to Medicaid or SCHIP.
Other States, such as Connecticut and New Jersey, use one name for their SCHIP and Medicaid coverage, but the SCHIP and Medicaid components retain some degree of separation, largely because different entities determine eligibility.
In Connecticut, the health coverage program for children is called HUSKY, and there is one application for the HUSKY program. HUSKY A, the Medicaid component, is administered by the State Medicaid agency; HUSKY B, the SCHIP-funded portion, is administered by a private contractor. All HUSKY applications are mailed to the private contractor, which screens for initial eligibility for HUSKY A or HUSKY B. Applications for children who appear to be eligible for HUSKY A are then sent to regional Department of Social Services offices. Applications for children who appear to be eligible for HUSKY B are retained by the contractor for a final eligibility determination.
One Agency To Determine Eligibility
States that use the same agency to determine eligibility for both Medicaid and SCHIP-funded coverage may have an easier time coordinating eligibility. When one agency evaluates eligibility for both SCHIP and Medicaid, the State does not have to develop mechanisms for transferring applications between agencies to make final eligibility determinations. If a State decides it wants to rely on one entity to determine eligibility for both programs, it will need to use a public agency to handle both Medicaid and separate SCHIP program eligibility determinations. Under Federal law, private entities cannot make final Medicaid eligibility determinations but can be used to determine eligibility for SCHIP-funded programs.6
Virginia administers Medicaid and its SCHIP-funded program as two separate programs, but it relies on the same public agency to determine eligibility for both programs. All applications are sent to local Department of Family Services offices, which screen and determine eligibility for both Medicaid and the Children's Medical Security Insurance Program.
States that use two different agencies (or a public agency and a private contractor) to determine eligibility for their programs need to develop systems for directing applications to the appropriate entity for a final eligibility determination. Most States that rely on two different entities to determine eligibility have a single point of entry, meaning that all applications are mailed to one site and initially screened for Medicaid or SCHIP eligibility.
Florida's child health programs are administered by different entities. (Medicaid, Healthy Kids, and Medi-Kids are the three main programs in Florida.) The State has developed a joint application, which is mailed by families to the Healthy Kids office and then sent by the Healthy Kids office to the private contractor that screens for eligibility. The contractor keeps the applications for children who appear to be eligible for Healthy Kids or Medi-Kids. It transfers the applications for children who appear to be eligible for Medicaid to one of four Medicaid processing offices for a final eligibility determination. If the Medicaid agency decides that the child is not eligible for Medicaid, the private contractor reviews the application to determine if the child is eligible for Healthy Kids or Medi-Kids.
Some States have developed strategies to prevent or limit delays in processing applications that can result from the need to transfer applications between entities.
Florida has developed a system that permits electronic exchanges of applications. When the private contractor receives the application, it is scanned into the computer by the private entity, allowing electronic transfers between the contractor and Medicaid.
Kansas and New Jersey locate eligibility workers for the two programs together. Applications need only be passed between workers, not between sites, to determine eligibility for the appropriate program.
Simplified Joint Application and Single Point of Entry
A joint SCHIP/Medicaid application is particularly important for States that use their SCHIP funds to create separate child health programs. Almost all States with separate child health programs are using or planning to use a joint SCHIP/Medicaid application.7
As the Health Care Financing Administration (HCFA) stated in its November 1998 guidance (Richardson, 1998a):
The simplest way to meet the "screen and enroll" requirement is to use a joint application form. A State would review the joint application and determine Medicaid or SCHIP eligibility consecutively, without requiring the family to submit additional information. Medicaid enrollment can be accomplished without referring the family to another office or completing another application.
Initially there were concerns that Medicaid rules would require joint applications to be long and difficult. This problem has not materialized. Until recently, most States had lengthy and complex Medicaid applications. However, new Federal guidance and State-initiated changes have shown that Medicaid applications can be short, simple, and relatively easy for families to complete. While "short" is not necessarily the only standard by which an application should be judged, it is an important feature of a streamlined application system. The Federal model SCHIP/Medicaid application is two pages.8 As of November 1998, 41 States had adopted Medicaid applications or joint SCHIP/Medicaid applications that were five pages or less. Many States have two- or three-page joint applications.9
Supplemental Forms Can Be Avoided
Some States with joint applications require families with children who appear likely to be eligible for Medicaid to complete additional forms. A few States require supplemental forms to establish eligibility under the separate SCHIP-funded programs. Additional forms can defeat or at least undermine the purpose of a joint mail-in form. They add complexity and can discourage families from completing the application process.
Supplemental forms are typically used to obtain information about the potential of getting medical support from an absent parent. However, children's eligibility for Medicaid does not require parental cooperation in establishing medical support, so this information does not need to be solicited in the initial application process. See the HCFA fact sheet, SCHIP and Child Support Enforcement
Sometimes supplemental forms are used to get more detailed information about children's immigration status or their current or recent insurance coverage. However, these questions can be asked simply and integrated into the application. Illinois adopts this approach. Alternatively, the separate form used for this information can be included in the joint application packet. Massachusetts takes this approach.
All Applications Forwarded to the Proper Agency
In most States that rely on different entities to determine eligibility for both Medicaid and the separate SCHIP program, the agency or private company that does the screening also makes the final eligibility determination for the SCHIP-funded program. Applications for children who appear to be eligible for Medicaid are forwarded to the State or county agency that determines Medicaid eligibility.
In some States, however, not all applications are transferred to the appropriate agency or entity for a final eligibility determination. A few States forward applications only if the applicant explicitly gives permission (i.e., the family "opts in"), and a few forward applications as long as the applicant does not explicitly deny permission (i.e., "opts out").
These "opt in" or "opt out" choices (which generally appear as check boxes on the application) are designed primarily to prevent applications from being forwarded to Medicaid when the family does not want to enroll its child in Medicaid. But they complicate the process and can cause children to lose out on coverage. Moreover, families do not always understand that if they "opt out" or do not "opt in," their child will not have coverage; that is, they mistakenly think they can choose the program in which their child will enroll. For this reason, HCFA has encouraged States to "make every effort to ensure that a decision by a family not to apply for Medicaid or not to complete the application process is an informed one" and to simplify and shorten the Medicaid application process so that families are not discouraged from proceeding with a Medicaid application (Richardson, 1998a).10
Georgia's experience is informative.
PeachCare is Georgia's SCHIP-funded separate program. The PeachCare application can be used to apply for PeachCare or Medicaid, but requires an "opt in" in order to determine Medicaid eligibility. Many families with Medicaid-eligible children have not opted in to Medicaid. When Georgia Medicaid workers contacted these families, they found that most did not understand that their children could be covered by Medicaid. The Director of Georgia's "Right From the Start" Medicaid project reports that almost three-quarters of the families contacted whose responses were tracked decided to pursue their Medicaid applications. If these families had not been contacted, their children might have remained uninsured.
Most States do not use an "opt-in" or "opt out" approach. The joint application makes it clear that families are applying for whichever program is appropriate for their children, and all applications are automatically forwarded from the entity that screens for eligibility to the entity that makes the final eligibility determination.
Age-Based Eligibility Rules Ended
Eligibility rules that depend in part on a child's age can create a number of complications for families and for administering agencies, particularly if the two programs do not align their policies and procedures and do not use the same providers.
Age-based eligibility standards can force some families to navigate two sets of program requirements. This is a particular problem in States that have different applications, verification procedures, or eligibility review processes for their child health programs.
They add to the occasions when children need to be transferred from one program to another. Transfers from Medicaid to the separate SCHIP program will be required when a child reaches the age at which the Medicaid program's income eligibility standard changes, even if the child's family income or other circumstances have not changed.
They are particularly difficult for families in States where the programs rely on different managed care plans and providers. In these States, children in the same family might have to receive care from different providers. Children who enter the SCHIP program when they get older and reach a new eligibility category are forced to change providers. Continuity of care is compromised, and providers experience unnecessary disruptions in enrollment.
Age-based eligibility standards also may make it harder for families, providers, and the public at large to understand program rules and to predict which program a child may qualify for. Many States with age-based eligibility standards have created complicated color-coded diagrams in an attempt to convey eligibility rules to the public. Age-based eligibility can make outreach less successful.
These are unnecessary complications. Age-based "staircase" eligibility standards in the Medicaid program result from the age-based minimum eligibility requirements that have been set by Federal law, but these standards can be eliminated at State option. Many States have taken advantage of the SCHIP enhanced matching funds to even out the age-based eligibility standards in their Medicaid programs. As of July 1999, 34 States and the District of Columbia had eliminated or limited age-based eligibility standards in Medicaid (Table 1).
States can receive enhanced SCHIP matching funds to cover children who become eligible for Medicaid when the States eliminate age-based Medicaid income standards, even if they currently cover these children in a separate SCHIP-funded program. SCHIP matching payments can finance coverage for a child in a separate State program or in Medicaid as long as the child was not eligible for coverage under State Medicaid standards in effect on April 1, 1997. It is not unusual for States to claim SCHIP matching funds for certain categories of children enrolled in their Medicaid programs. As of October 1999, 35 States and the District of Columbia used SCHIP enhanced matching funds for some of the children enrolled in their Medicaid programs.
The New York Medicaid program now covers children ages 1-5 with incomes up to 133 percent of the Federal poverty line. Children 6 and over are covered under Medicaid if their income is below 100 percent of the Federal poverty line. Children whose income is above these Medicaid eligibility standards may qualify for Child Health Plus, New York's separate SCHIP-funded program. Pursuant to State legislation enacted in 1998, however, New York is planning to raise the Medicaid income eligibility standards to 133 percent of the poverty line for all children over age 1. (State law directs this change to take place when a certain percentage of the Medicaid caseload is enrolled in managed care.) When New York implements this change, it will continue to receive enhanced Federal matching payments for the older children, who will be switched from Child Health Plus to Medicaid.
State age-based eligibility standards for Medicaid: July 1999
Number of Medicaid income standards based on childrens age:
1 standard for all children 2 standards 3 or more standards1
District of Columbia
1 In general, these States have one income standard for infants, a less generous standard for children ages 1-5, and a still less generous standard for older children.
2 These States have one income standard for all children other than infants.
Source: Center on Budget and Policy Priorities Survey of States, July 1999.
Verification Requirements Simplified and the Same for Both Programs
A number of States, including some that use joint applications, require families to submit different documents to verify eligibility depending on whether the child appears to be eligible for Medicaid or for the separate SCHIP-funded program. In general, States that have two sets of verification rules require more documents for Medicaid than for their SCHIP program.
Differences in verification policies or practices make it more difficult to coordinate enrollment and assure that all eligible children are enrolled. For example, a family may submit a joint application along with the documents required by the SCHIP-funded program; if the screener determines that Medicaid eligibility is likely, another contact with the family is needed to request additional verification for Medicaid. This creates another step in the process, another task for the reviewing agency, more paperwork for the family and the agency, and another opportunity for an eligible child to slip through the cracks. The Southern Institute for Children and Families has found through years of study that verification requirements create some of the most significant barriers to enrollment (Shuptrine, Grant, and McKenzie, 1993, 1994, 1998).
In some cases, States have not aligned their Medicaid and SCHIP verification requirements because they have not wanted to carry over burdensome Medicaid verification requirements to their SCHIP programs. However, they can streamline the verification requirements in both programs. Under Federal Medicaid law, the only verification that families must submit is proof of the child's immigration status, a requirement applicable only to noncitizens. In Medicaid, as in SCHIP, States can rely on the applicant's statements to establish any other eligibility factor, including income, resources, identity, age, and residency (Richardson, 1998b). In order to assure program integrity, States can match information submitted on applications to data collected electronically from other sources, and they can conduct post-eligibility audits for a sample of cases.
Table 2 shows the verification requirements imposed by some States. Relaxed verification does not appear to lead to increased errors, particularly if States use other systems, such as computerized wage data matches, to check on the information families report. According to the Southern Institute on Children and Families (Shuptrine, Grant, and McKenzie, 1998), Georgia reports that it did not experience a rise in error rates after it began to allow self-declaration of income in its Medicaid program. The State of Washington, which recently dropped its Medicaid income verification requirement, found some income reporting errors in an audit of sample cases but the errors were small and generally did not affect eligibility. Moreover, to the extent that program integrity is the operative concern, there is no evidence to suggest that families with Medicaid-eligible children are more likely than families with children eligible for SCHIP-funded coverage to misstate the information provided on their applications.
Verification requirements for Medicaid and SCHIP-funded separate State programs in selected States: August 1999
Verification required for children in Medicaid
Verification for SCHIP-funded separate programs same as for Medicaid? State Income Residency Deductions Arizona Yes No No Florida1 No No No Georgia No No No Idaho No No No 2 Indiana Yes No No 2 Kansas Yes No No Massachusetts Yes No 3 Maryland No No No 2 Oklahoma No No No 2 Oregon Yes No 3 South Carolina Yes No No 2 Washington No No No 2 1 In Florida, self-declaration of income, identity, residency, and deductions is acceptable in both Medicaid and the SCHIP-funded separate programs if the joint application is used.
2 As of July 1999, Indiana, Maryland, Oklahoma, South Carolina, and Washington did not operate SCHIP-funded separate State programs
3 In Massachusetts and Oregon, Medicaid eligibility is determined on the basis of gross income so deductions are not considered.
Source: Center on Budget and Policy Priorities Survey of States, August 1999.
Income and Asset Rules Aligned
In order to determine a child's eligibility for coverage, Medicaid and separate SCHIP-funded programs must establish rules to decide whose income and assets are to be considered, what sources of income or assets are exempt or disregarded, and whether any deductions will be allowed. States that use the same financial eligibility rules in their Medicaid and separate child health programs will have an easier time creating seamless enrollment and transition systems.
In eligibility screening, States that use the same income-counting rules for Medicaid and their SCHIP program can do one income calculation and then compare the child's income to the eligibility standard for each program. States that use different rules in their two programs must go through a more complicated set of calculations. The entity that performs the screening process must first determine the gross income for the household members whose income is counted in the Medicaid program, apply the Medicaid deductions, and compare net income to the Medicaid standards. If the child does not appear to be eligible for Medicaid, a second income calculation is done under SCHIP program rules to determine if the child is eligible for SCHIP-funded coverage.
Different income-counting rules can lead to confusion among eligible families, as well as providers and organizations helping with outreach. For example, States often put the income eligibility standards for Medicaid and for the SCHIP-funded separate child health program in their marketing brochures and sometimes put these standards in their applications. To avoid complicating the message with details about net or countable income and how the rules are different for the two programs, they often use the net income standard for Medicaid and the gross income standard for the separate State program. Without more information about available deductions, these standards can be misleading. Families with gross earnings modestly over the standards listed for Medicaid may assume they are eligible for the SCHIP-funded separate program rather than for Medicaid. They are not aware that expenses, such as for child care, will be taken into account when Medicaid eligibility is determined. This has particular implications in States without joint applications or with "opt-in" and "opt-out" choices. Families may apply to the wrong program or choose not to have their application forwarded to Medicaid because they believe their children are not eligible for Medicaid.
States have various options for aligning their income rules. Federal law sets out the rules for calculating a child's family income for determining Medicaid eligibility.11 These are the minimum requirements. Federal law permits States to adopt less restrictive income-counting rules without a waiver. For example, at a minimum States must disregard $90 of earnings per month to account for work-related expenses, but many States have adopted larger earning disregards in their Medicaid programs. The Federal SCHIP law generally does not set any rules for what income is to be counted and what deductions are to be allowed.12 With a few exceptions, decisions about how income will be counted in SCHIP-funded separate State programs have been left to State agency discretion.
Under Federal law, therefore, States can apply the Medicaid rules to their SCHIP program or they can develop a different set of rules for both programs as long as Federal Medicaid minimum requirements are met. If a State that uses a gross income standard in its SCHIP-funded program changes its policy and applies the Medicaid deductions in both programs, as California recently did, eligibility for the separate program will be expanded (assuming the income standard remains the same). This can be a positive development for uninsured children but would result in additional State expenditures.
State practice with respect to alignment of income-counting rules appears to vary widely.
States that use the same or very similar rules in SCHIP and Medicaid include Arizona, Delaware, Connecticut, Georgia, Illinois, Kansas, Massachusetts, Michigan, North Carolina, Oregon, and Virginia.13
Several States, including Alabama, California, Florida, Iowa, Maine, Montana, Nevada, New Jersey, and New York, do not apply the deductions that are available in Medicaid in their SCHIP-funded programs. Income eligibility for SCHIP is determined by comparing gross income to the program's income eligibility standards.
Similar considerations apply to alignment of asset rules. States that use the same asset test for both programs or that use no asset test in either program have one fewer item to be addressed when coordinated enrollment strategies are designed. Most States have eliminated the asset test in both programs.
A small number of States Colorado, Montana, Nevada, North Dakota, and (for children ages 6 and over) Utah apply an asset test in Medicaid but not in their separate child health program. Oregon applies the same asset test in the Medicaid and SCHIP components of the Oregon Health Plan. Iowa had an asset test in Medicaid (but not in its separate SCHIP program), which State law eliminated as of July 1999.
Easy Transitions When Eligibility Is Redetermined
The need for coordination in a dual-program system is not limited to the enrollment process. Relatively small changes in family income and expenses, as well as changes in family composition (such as a birth, divorce, separation, or marriage), easily can result in a child becoming ineligible for one program and eligible for the other. A seamless or well-coordinated redetermination process would assure that children who are no longer eligible for the program in which they have been enrolled are evaluated for the other program and, if eligible, are enrolled without a new application and without any lapse in coverage.
It is possible to use a gross income standard in Medicaid without a waiver if the standard is high enough to assure that all children who would have been eligible for Medicaid if deductions were applied still qualify for coverage.
Many States are only just beginning to think through how they will coordinate redeterminations. Some States, however, have designed coordinated redetermination procedures.
Maine uses the same form and the same procedures to redetermine Medicaid and Cub Care eligibility. At 6-month intervals, families are sent a short form requesting basic information such as name, Social Security Number, and income. Families must return the form, along with verification of their current income. If the child is no longer eligible for the program in which he or she has been enrolled, eligibility for the other program will be considered and the child will be enrolled, if appropriate, without having to complete additional forms.
In Arizona, if a child becomes ineligible for Medicaid, the information relevant to eligibility is transferred electronically to KidsCare. Children found eligible for KidsCare are enrolled without having to complete a new application. A similar process is in place to ensure that children who become ineligible for KidsCare and who might be eligible for Medicaid can be enrolled in Medicaid without having to complete a new application.
Delaware has implemented a computerized eligibility determination system that automatically considers eligibility for all Medicaid eligibility categories and for the SCHIP-funded separate program before a case is closed. Utah is currently developing a computerized redetermination system.
Under Federal law, States have the option both in Medicaid and in their separate SCHIP-funded program to allow children to retain coverage for up to 12 months, regardless of a change in family circumstances that might affect eligibility. States were accorded the flexibility to adopt "continuous eligibility" for children in Medicaid in 1997, in the same legislation that created SCHIP. The option promotes continuity of care. It assures families and providers that coverage will be maintained for a predictable period of time. From the point of view of coordination, continuous coverage reduces the occasions when changes in family circumstances (for example, overtime pay or a reduction in hours of employment) require that a child be transferred from one child health coverage program to another.
Of the 26 States that had implemented separate SCHIP-funded programs as of July 1999, 5 have adopted continuous eligibility in both Medicaid and their SCHIP program (Table 3). Seven have adopted continuous eligibility only in their separate SCHIP-funded program, and Florida has adopted 12-month continuous eligibility only for younger children in its Medicaid program.14
States operating a separate SCHIP program that have
adopted the 12-month continuous eligibility option:
12-month continuous eligibility for children in both Medicaid and SCHIP 12-month continuous eligibility for children in SCHIP only
Note: Florida offers 12-month continuous eligibility to children under age 5 in Medicaid only. Older children are enrolled in Medicaid for 6-month continuous periods.
Source: Center on Budget and Policy Priorities Survey of States, July 1999
Common Service Delivery System
Using the same service delivery system for both programs is particularly important because income often fluctuates for low-income families because of changes in jobs, hours of employment, wages, and child care expenses. States that smoothly coordinate transfers between programs assure that there is no lapse in coverage. If a child must see a different provider when a change in coverage occurs, the child loses continuity of care and providers experience more frequent changes in their enrollment.
Other Aspects of Coordination
Many other aspects of program rules and policies could affect coordination strategies. Some key ones are noted below.
Collect the initial premium after eligibility has been determined. Some enrollment procedures rely on joint applications but require applicants to submit premiums with the application. This can complicate the process for both families and administering agencies. Procedures to return premiums need to be established for families that submit their premiums with their applications but turn out to have children who are Medicaid eligible. In addition, families whose children are eligible for Medicaid but who mistakenly anticipate that they have to pay a premium may be deterred from applying if a premium is required when the application is mailed in.
Adopt grace periods for collecting premiums when a child moves from Medicaid to the separate SCHIP-funded program. States that require premiums in their separate SCHIP-funded program need systems for collecting the premium when a child is transferred from Medicaid to the SCHIP program. Premium payments ought not to hold up the transfer or create a gap in coverage; a grace period for premium payment can assure uninterrupted coverage and access to care.
Allow families to select the managed care provider after eligibility has been determined. Most States wait until after eligibility has been established before beginning the process of enrolling children into managed care. Otherwise, families would have to sort through managed care choices under one program that might be unavailable in the program their children actually qualify for. (This is generally not an issue in States that rely on the same managed care plans for both programs.)
Issue identical or similar enrollment cards in both programs. Some States with separate SCHIP programs use laminated cards issued by private insurance plans for their SCHIP-funded program but still use paper "cards" (or plastic cards that look very different from the SCHIP program cards) for Medicaid. These differences can make families less comfortable with Medicaid and undermine efforts to reduce stigma and create a seamless system that does not appear to offer better treatment to families with somewhat higher incomes. Even States that use different names for their two programs can make the cards look similar.
How Five States Approach Coordination
The following descriptions present the approaches five States Georgia, Kansas, Massachusetts, New Jersey, and Oregon have taken to coordinate their Medicaid and SCHIP-funded separate programs.
PeachCare, Georgia's SCHIP-funded program, is a separate child health program with a number of important links to Medicaid. For example, both programs use the same income-counting rules to determine eligibility, and neither program has an assets test. In addition, verification requirements for both programs have been largely eliminated and they both accept the applicant's self-declaration of income, residency, and other information.
Coordination Indicators: Georgia N One program/one name N One agency to determine eligibility Y Simplified joint application and single point of entry N All applications forwarded to proper agency N Age-based eligibility rules ended Y Verification requirements simplified and the same for both programs Y Income and asset rules aligned N Easy transitions when eligibility is redetermined N Continuous eligibility Y Common service delivery system
A short Medicaid application for pregnant women and children is still in use, but the new PeachCare application also can be used to apply for Medicaid. If the Medicaid application is used, a face-to-face interview is required. However, a team of eligibility workers from the State's Right from the Start Medicaid (RSM) program routinely meet with families in a host of settings including schools, child care centers, churches, worksites, and applicants' homes to help with Medicaid applications. These meetings satisfy the face-to-face interview requirement. RSM workers also can assist families with the PeachCare application if it appears the children are more likely to qualify for PeachCare.
Families that complete the PeachCare application on their own mail the form to a central post office box. All applications are screened by a private contractor to assess whether the child is likely to be eligible for Medicaid. If so, the data on the PeachCare application are retained in the computer system and a paper copy of the form is forwarded to the Department of Medical Assistance in Atlanta, where a team of RSM workers makes final eligibility determinations.
Keeping the data from the PeachCare application in the contractor's computer file helps to avoid delays in making the final determination. For example, if an application has been screened and forwarded to Medicaid, but upon closer scrutiny it turns out that the child is actually not eligible, the RSM worker can alert the PeachCare contractor. The application then can be reviewed for PeachCare eligibility without further delay.
The PeachCare application includes an "opt in" box. Applications for children whose parents do not opt in are not automatically considered for Medicaid. Over a 10-month period, parents applying for a total of 4,880 children who appeared to be eligible for Medicaid indicated that they did not want the application forwarded to Medicaid. When such families were contacted by an RSM worker and given more information, most decided to enroll their children in Medicaid. The State cannot say, however, how many of the families that did not opt in have been reached.
Once enrollment is accomplished, families are issued different enrollment cards depending on whether they are enrolled in Medicaid or PeachCare. The Department of Medical Assistance issues families paper verification of Medicaid eligibility each month. PeachCare issues a laminated card once a year.
An important connection between the two programs exists on the delivery side. Both programs use a primary care case-management system. The Department of Medical Assistance, which administers both programs, reports that every Medicaid provider is a PeachCare provider, and every PeachCare provider is a Medicaid provider. Since income eligibility for Medicaid varies based on the age of the child, two children in the same family could qualify for different programs, but both could go to the same providers for care.
The schedule for recertification is different for the two programs. Medicaid requires a redetermination of eligibility every 6 months; in PeachCare, redeterminations are done at 12-month intervals. If children are found at redetermination to be ineligible for Medicaid, the family is given a PeachCare application. They must reapply in order to be transferred to PeachCare. When a child enrolled in PeachCare becomes eligible for Medicaid, the information is transferred to Medicaid. No new application is required. The State has not adopted continuous eligibility either for PeachCare or for Medicaid.
Two programs Medicaid and the new, SCHIP-funded HealthWave program provide health insurance to low-income children in Kansas. The State's interest in creating an easy enrollment process and concern about reducing the stigma families may associate with Medicaid participation catalyzed the development of one application system for both Medicaid and SCHIP-funded coverage. The programs continue to operate separately in many ways, although the Department of Social and Rehabilitation Services anticipates further changes that would bring the programs closer together.
Before HealthWave was implemented in January 1999, families seeking Medicaid coverage for their children had to complete a lengthy application form and have a face-to-face interview. Currently, a single, four-page HealthWave form is used to apply for coverage under either program and all families can submit their applications by mail. The same income-counting rules are used for both programs, and neither program has an asset test. Both programs use the same verification rules. However, because of age-based eligibility rules, a family could have one child covered under Medicaid and another child covered under HealthWave.
Coordination Indicators: Kansas N One program/one name N One agency to determine eligibility Y Simplified joint application and single point of entry Y All applications forwarded to proper agency N Age-based eligibility rules ended Y Verification requirements simplified and the same for both programs Y Income and asset rules aligned Y Easy transitions when eligibility is redetermined Y Continuous eligibility N Common service delivery system
Both Medicaid and HealthWave are administered by the Kansas Department of Social and Rehabilitation Services, although eligibility determinations for HealthWave are done by a private contractor. All applications are mailed to a central location, which houses State agency workers as well as private contractor employees responsible for HealthWave. Information from the application is entered into the computer system and an initial eligibility screening is done automatically. Applications for children who are likely to be Medicaid eligible are assigned to State workers for a final determination; those that appear more likely to be eligible for HealthWave are handled by the contract workers at the same site. Co-locating workers who are responsible for both programs makes it easy to transfer applications back and forth, if necessary. (Some applications are not handled on site. When the initial computer check indicates that the family has an open Food Stamp or cash assistance case, the application is forwarded to the local office of the Department, where the other benefits are administered.)
Once eligibility is determined, families are sent enrollment cards. They are not the same for the two programs: the State agency issues a paper Medicaid card and the managed care plan issues a plastic card for children enrolled in HealthWave. While the benefits in the two programs are essentially the same, in some parts of the State the programs rely on different delivery systems.
Kansas has adopted 12-month continuous eligibility for both programs. At 12-month intervals, families are asked to complete a new application, attach income verification, and submit the form by mail. The State reports that the redetermination system "is seamless." A child who is no longer eligible for the program in which he or she is enrolled will automatically be enrolled in the other program, if appropriate. There is no lapse in coverage or additional paperwork.
In response to the Federal SCHIP law, Massachusetts revamped its system for providing health insurance for children by expanding coverage under the State's MassHealth program. From the perspective of Massachusetts residents, MassHealth is one program with several components. The Medicaid component, referred to as MassHealth Standard, covers all children, regardless of age, if their family income is below 150 percent of the Federal poverty line. Children enrolled in this component of MassHealth are Medicaid recipients with the full range of Medicaid benefits (subject to the Medicaid rules adopted pursuant to a section 1115 waiver).
Coordination Indicators: Massachusetts Y One program/one name N One agency to determine eligibility Y Simplified joint application and single point of entry Y All applications forwarded to proper agency Y Age-based eligibility rules ended Y Verification requirements simplified and the same for both programs Y Income and asset rules aligned Y Easy transitions when eligibility is redetermined N Continuous eligibility Y Common service delivery system
SCHIP funds were used to create a second layer of coverage for children within MassHealth, referred to as MassHealth Family Assistance. SCHIP finances coverage for children with family income between 150 percent and 200 percent of the Federal poverty line. This component of MassHealth offers slightly more limited benefits than the Medicaid component and families must pay a premium. In addition, since it is subject to the Federal SCHIP rules, not the Federal Medicaid rules, enrollment under MassHealth Family Assistance depends on the availability of SCHIP funds. (Massachusetts also operates a separate, wholly State-funded child health program for children who are not eligible for MassHealth, called the Children's Medical Security Plan [CMSP]. CMSP does not rely on SCHIP or Medicaid funds.) MassHealth also has several other components, including SCHIP-funded employer-based family coverage.
One application is used to apply for all MassHealth components. Eligibility for MassHealth is determined by the Division of Medical Assistance. The Division uses a gross income test to assess whether children's family income qualifies them for MassHealth Standard or MassHealth Family Assistance. (Certain disabled children may qualify for a third component, MassHealth Commonhealth.) No asset test is applied to any group. If family income puts the child over the MassHealth income standard (200 percent of the Federal poverty line), the child can be enrolled in CMSP without having to fill out a separate application.
All children enrolled in MassHealth have access to the same providers. MassHealth uses the same enrollment card and a common recertification system for all "members." Children are transferred between MassHealth components without additional paperwork or a lapse in coverage. The State has not adopted continuous eligibility for either its Medicaid or its SCHIP-funded children.
New Jersey's KidCare Program brings four child health coverage options under one name Plan A (Medicaid), Plan B (SCHIP-funded non-Medicaid coverage with no cost-sharing), and Plans C and D (both are SCHIP-funded non-Medicaid coverage with cost-sharing). A single KidCare application is used for all components; the application can be mailed to a central KidCare office or to the county social services office. Families also have the option to apply for KidCare in person at the county office.
In most cases, all children in a family are eligible for the same KidCare component, except that infants almost always are eligible for Plan A. Eligibility for Plan A is based on different income-counting rules than those used in the SCHIP-funded plans. Deductions for work and child care expenses are applied to the family's income to determine Plan A eligibility, but Plans B, C, and D use a gross income test.
Y One program/one name N One agency to determine eligibility Y Simplified joint application and single point of entry Y All applications forwarded to proper agency Y Age-based eligibility rules ended Y Verification requirements simplified and the same for both programs N Income rules aligned Y Asset rules aligned N Easy transitions when eligibility is redetermined N Continuous eligibility Y Common service delivery system
All KidCare components are administered by the New Jersey Department of Human Services, but a private contractor determines eligibility for the SCHIP-funded components. The private contractor receives all applications mailed to the central KidCare office and screens them for potential Plan A eligibility. State workers at the same site conduct a final Medicaid eligibility determination for these applications. Many applications arrive at the central location incomplete and eligibility workers call families to obtain missing information, including verification documents. Contacting families to help them complete their application is important. For example, a family that appears to be eligible for Plan B could actually qualify for Plan A if the child care deduction is taken. Proof of child care expenses would then be needed. If a family completes the KidCare application in person at a county office, a Plan A determination can be made by county staff. If the applicant appears to be eligible for Plans B, C, or D, the county worker forwards the application to the private contractor.
Benefits for all components of KidCare are similar, although the scope of certain benefits is limited in the SCHIP-funded plans. All benefits are delivered through a managed care system, and providers are the same for all components in the program. The KidCare cards are essentially the same for all beneficiaries; the card indicates the plan (A, B, C, or D) for which the child is eligible.
None of the KidCare plans relies on continuous eligibility. Although the redetermination period is different for different components 6 months for Plan A and 12 months for Plans B, C, and D a similar mail-in process is used to determine whether children can retain their eligibility. Children who become eligible for a different plan are transferred without a lapse in coverage. However, if a child becomes eligible for Plans C and D, a premium is required and coverage could lapse if the premium is not paid within a specified time period.
The Oregon Health Plan (OHP) provides coverage to low-income families with children. (Other publicly financed health coverage programs are also available to some families in Oregon.) Prior to SCHIP, coverage for children under the OHP was based on a Medicaid section 1115 waiver. In 1998, the State decided to use its SCHIP funds to expand coverage for children by creating a non-Medicaid component of the OHP. A gross income test and an asset limit of $5,000 (in liquid assets) apply to all children under the OHP. Verification requirements are the same for all applicants. Since the age of the child is a factor in determining eligibility, it is possible for children in the same family to be eligible for different components of the program, but all the children in the family will be enrolled in OHP.
Coordination Indicators: Oregon Y One program/one name Y One agency to determine eligibility Y Simplified joint application and single point of entry Y All applications forwarded to proper agency Y Age-based eligibility rules ended Y Verification requirements simplified and the same for both programs Y Income and asset rules aligned Y Easy transitions when eligibility is redetermined N Continuous eligibility Y Common service delivery system
To obtain coverage, families complete the OHP application and mail it to the Office of Medical Assistance, the agency that administers all components of the OHP. Within this agency, Adult and Family Services operates a central processing unit for most applications. Applications for children whose families have an open Food Stamp or cash assistance case are forwarded to a local office of the same agency for eligibility determination.
At the same time that the agency determines whether family income is below the OHP income standards, it also determines whether coverage will be financed using Medicaid or SCHIP funds. This distinction is invisible to families, and will remain so as long as SCHIP funding can sustain coverage for all SCHIP-eligible children who apply. Since the benefit package and choice of providers is the same regardless of the funding stream, the funding source has no impact on how families obtain care for their children.
All families go through the same recertification process every 6 months. (The State has not adopted the continuous eligibility option.) Families must submit a redetermination form and provide documents to verify their income. These materials can be submitted by mail. Children will remain covered as long as their family income is below the OHP eligibility standard; a change in their status as an SCHIP-funded or a Medicaid-funded enrollee will not result in a lapse in coverage or in additional paperwork for the family.
States are most likely to be successful in coordinating their child health coverage programs if they closely examine ways in which program rules and procedures can be simplified and aligned. By taking advantage of the options available under Federal Medicaid and SCHIP laws to adopt streamlined procedures and eliminate unnecessary differences in policy, States can develop relatively seamless systems that offer low-income uninsured children one route to coverage. Most States are continuing to experiment with different strategies for coordinating enrollment and redetermination procedures, and many are finding new ways to structure their systems. These evolving strategies can have a considerable payoff, helping States reach their enrollment goals.
DeParle N, Fox C. Administrator, Health Care Financing Administration, and Acting Administrator, Health Resources and Services Administration. Letter to: State health officials. 1998 Jan 23.
Florida Healthy Kids Corporation. Healthy Kids 1999 Annual Report. Tallahassee, FL.
Fox H, Graham R, McManus M, et al. An analysis of States' CHIP policies with special health care needs. Washington, DC: Maternal and Child Health Policy Research Center; 1999 Apr.
Fox H, McManus M, Graham R, et al. Plan and benefit options under the State Children's Health Insurance Program. Washington, DC: Maternal and Child Health Policy Research Center; 1998 Jan.
Perry M, Stark E, Valdez R. Barriers to Medi-Cal enrollment and ideas for improving enrollment: findings from eight focus groups in California with parents of potentially eligible children. Menlo Park, CA: Kaiser Family Foundation; 1998.
Richardson S. Director, Center for Medicaid and State Operations, Health Care Financing Administration. Letter to: State health officials. 1998a Nov 23.
Richardson S. Director, Center for Medicaid and State Operations, Health Care Financing Administration. Letter to: State health officials. 1998b Sep 10.
Selden T, Banthin J, Cohen J. Medicaid's problem children: eligible but not enrolled. Health Affairs, 1998 May/June; 17(3): 193-208.
Shuptrine S, Grant V, McKenzie G. Improving access to Medicaid for pregnant women and children in Georgia. Columbia, SC: Sarah Shuptrine and Associates; 1993.
Shuptrine S, Grant V, McKenzie G. Addressing the need for outreach to pregnant women and children. Columbia, SC: Sarah Shuptrine and Associates; 1994.
Shuptrine S, Grant V, McKenzie G. Southern regional initiative to improve access to benefits for low income families and children. Columbia, SC: Southern Institute on Children and Families; 1998.
Shuptrine S, McKenzie G. Information outreach to reduce welfare dependency: a Georgia welfare reform initiative. Columbia, SC: Southern Institute on Children and Families; 1996.
Thorpe K, Florence C. Covering uninsured children and their parents: estimated costs and number of newly insured. New York, NY: The Commonwealth Fund; 1998.
Ullman F, Bruen B, Holahan J. The State Children's Health Insurance Program: a look at the numbers. Washington, DC: Urban Institute; 1998.
1 This report focuses on issues relating to coordinating separate SCHIP-funded programs with Medicaid. But other important coordination issues arise in the context of SCHIP. The SCHIP law requires States to coordinate SCHIP coverage with other public and private sources of health coverage for children and to ensure that SCHIP-funded coverage does not substitute for coverage under group health plans. It also requires States to include in the State evaluations, which must be submitted to the Secretary by March 31, 2000, a review and assessment of State activities to coordinate SCHIP with other public and private programs, including Medicaid and maternal and child health services.
2 According to the Agency for Healthcare Research and Quality (formerly the Agency for Health Care Policy and Research), which analyzed 1996 Medical Expenditure Panel Survey data, as many as 4.7 million out of 11.3 million uninsured children were eligible for Medicaid but not enrolled (Selden, Banthin, and Cohen, 1998). Using data from the 1997 Current Population Survey (CPS), Thorpe and Florence (1998) estimated that out of a total of 11.3 million uninsured children, 5.1 million were eligible for Medicaid but not enrolled. The Urban Institute makes adjustments to the CPS data and has lower estimates of the number of uninsured children and of the number of uninsured children who are eligible for Medicaid and for SCHIP-funded expansions (Ullman, Bruen, and Holahan, 1998).
3 SCHIP funds have been allocated for 10 years. However, under the 1997 law, the total funds available to States dips in the year 2002 by almost 26 percent. In any given State, this drop in overall SCHIP funds may be offset in part or in full by unused SCHIP funds carried over by that State and by unused SCHIP funds that have been reallocated from other States. States have 3 years to use their SCHIP allotments. Unused funds will be reallocated to States beginning in Federal fiscal year 2001.
4 The Health Care Financing Administration (HCFA) has provided some guidance to States on the coordination requirement as it relates to enrollment (DeParle and Fox, 1998; Richardson, 1998a). It has not released guidance on procedures that need to be in place to assure that children whose circumstances change can transition from one program to another without a gap in coverage.
5 The coverage provided to SCHIP-covered children is subject to the Federal SCHIP rules, not the Federal Medicaid rules. This means, for example, that SCHIP rules relating to cost-sharing, benefits, and entitlement apply to the SCHIP-funded children.
6 Medicaid rules do not prevent private entities from doing initial processing of Medicaid eligibility (for example, at out-stationed application sites) or to screen applications for Medicaid eligibility as long as the final Medicaid eligibility determination is made by State agency personnel.
7 According to the Center on Budget and Policy Priorities' survey of States, as of July 1, 1999, Nevada is the only State with a separate SCHIP-funded program that does not use a joint application and does not currently have plans for developing one. New York is piloting a joint application, Pennsylvania is close to completing development of a joint application, and Montana plans to adopt one by January 2000. Utah has a separate application for its SCHIP-funded program as well as a joint SCHIP/Medicaid application.
8 HCFA's model joint SCHIP/Medicaid application is attached to guidance issued on September 10, 1998. One disadvantage of short SCHIP/Medicaid applications is that they may not allow for consideration of eligibility for other family members. Some States, however, have adopted simplified applications that cover parents as well as children. Rhode Island and the District of Columbia use a simple two-page application to enroll children, pregnant women, and parents.
9 Comparisons among States based on application length are not always informative. Some States use supplemental forms, while others integrate all questions on their basic form. Some States include detailed instructions on their forms, while others rely on brochures or other documents to convey similar information. Moreover, some States have squeezed so many questions into a few pages that the application may not be as easy to complete as one that is the same number of pages but has fewer questions or one that is longer but has more blank space or larger print. Most State child health applications are now posted on the Center on Budget and Policy Priorities Web site, www.cbpp.org/shsh/ .
10 The HCFA guidance encourages States to inform families about Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefits, the prohibition against cost-sharing for children in Medicaid, and other differences between Medicaid and the State's separate SCHIP program. The guidance further advises that families "should be informed that they do not have the choice of program; they may not be enrolled in SCHIP when determined to be Medicaid eligible." (Richardson, 1998a).
11 Under Federal Medicaid rules, the income of all legally responsible relatives living with the child is counted. Income from individuals who are not legally responsible (for example, an aunt or grandmother) is not counted unless that person is actually contributing to the child's support. In addition, States are required to disregard certain sources of income and to apply certain deductions when eligibility is determined. The main deductions are for work-related expenses, including child care.
12 Income from certain benefit programs cannot be counted as income in SCHIP programs pursuant to the laws that authorize those benefits.
13 Massachusetts and Oregon base their eligibility determinations for the SCHIP and Medicaid components of their program on gross income; no deductions are allowed for Medicaid-eligible children pursuant to section 1115 waivers. It is possible to use a gross income standard in Medicaid without a waiver if the standard is high enough to assure that all children who would have been eligible for Medicaid if deductions were applied still qualify for coverage.
14 Eight States that have expanded coverage exclusively through Medicaid and do not have a separate SCHIP-funded program have adopted continuous eligibility in Medicaid.
HRQ Publication No. 00-0014, February 2000