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This Fall marks the 10th anniversary of the State Children's Health Insurance Program (SCHIP). The program, a component of the Balanced Budget Act of 1997, expanded health insurance coverage to low-income children. Today, SCHIP covers over 6.5 million children at a total annual cost of nearly $8 billion dollars (in 2006; Kaiser Family Foundation 2007). The program has been quite effective; the uninsurance rate among children in its target population fell by about 25 percent since the program's inception, during a period when coverage among higher income children has been fairly stable (Congressional Budget Office 2007). Funding for SCHIP was initially appropriated for a 10-year period beginning in 1998, and Congress is currently debating whether and how the program will be reauthorized. While it is a program of short tenure and modest size, SCHIP has had a significant influence on both health policy formulation and health services research. SCHIP's organizational structure has encouraged innovation (and useful health services research examining such innovations) and the success of SCHIP has provided evidence that health insurance expansions built on current institutional structures can work.
SCHIP emerged in the wake of three policy developments. The Medicaid expansions of the late 1980s and early 1990s had demonstrated the feasibility of covering children based only on income and not on family characteristics. The Personal Responsibility Act of 1996, which dismantled the existing structure of the welfare system, led to renewed concern about the well-being of children whose mothers would be encouraged to leave welfare—and Medicaid—for jobs that might not provide family health insurance benefits. Finally, the aftermath of the Clinton Administration's failed attempt at comprehensive universal health insurance reform turned advocates' attention toward incremental plans.
The design of the SCHIP program encouraged organizational innovation. States have considerable flexibility in the design of their programs, and may build on their existing Medicaid programs, design entirely new administrative structures, or develop programs that combine Medicaid and new structures. They may charge premiums, require cost-sharing, and vary benefits. Unlike Medicaid, which includes a provision for retroactive enrollment designed to offset costs incurred by providers in treating the uninsured, SCHIP was designed purely as an insurance program. Indeed, many states built their SCHIP programs entirely around private managed care plans, often sidestepping issues of provider payment or panel design.
Most important, the financing for SCHIP—a fixed allotment for each state, based on the size of the eligible population and the share uninsured—gave states an incentive to maximize enrollment. This incentive led states to view public coverage through a new lens. Rather than placing administrative and informational roadblocks in the way of potential enrollees, states pressed forward with administrative simplifications and experimented with alternative marketing strategies. States explored the landscape of public programs that served the target population, including the food stamps and school lunch programs, seeking ways to identify and recruit new enrollees.
This programmatic ferment offered a fertile basis for health services research. Building on strategies developed in analyzing the earlier Medicaid expansions, researchers exploited state variations in program scope, coverage, and timing, to gain an understanding of several dimensions of health insurance policy. The availability of several data sets, including state level data sets, the National Survey of American Families, and an expanded Current Population Survey Annual Demographic File sample, designed specifically to capture the SCHIP eligible population, facilitated these analyses. The success of these strategies is evident in the many HSR papers published based on the SCHIP program—studies exploring coverage design (Dubay and Kenney 2003; Phillips et al. 2004; Brickhouse, Rozier, and Slade 2006; Guendelman et al. 2006); physician participation (Bronstein, Adams, and Florence 2004); populations served (Schwalberg, Hill, and Anderson Mathis 2000; Newacheck et al. 2003); relationships among types of coverage (Feinberg et al. 2001); and methods (Dubay and Kenney 2000).
This issue offers two more SCHIP papers that use innovative methods to provide insights into the effect of the program on enrollees (Kenney 2007; Wang, Norton, and Rozier 2007). Kenney's paper illustrates the benefits of linking program evaluation to program implementation. She uses data on recently enrolled, longer-term enrolled, and recently disenrolled SCHIP beneficiaries, collected through a study mandated by Congress. Kenney uses an astute strategy to construct a design resembling a quasi-experiment from this single cross-section. Using this design, she finds not only that SCHIP enrollment improves access to care for enrollees who were previously uninsured, but also that SCHIP appears to reduce access barriers for many children who held coverage even before enrolling. These effects are greatest for access to preventive dental care, a benefit which is often not included in private health plans.
Wang, Norton, and Rozier (2007) focus their attention on access to dental services. They use both pre–post control group designs and an instrumental variables approach to exploit the variation in the timing and eligibility thresholds of SCHIP. They find substantial effects of SCHIP implementation and enrollment on reducing unmet needs for dental care and enhancing access to dental care services. Their study also compares children enrolled in different types of SCHIP plans—Medicaid expansions and stand alone plans—and finds no differences between these types of plans.
Research on SCHIP, such as that in the Kenney (2007) and Wang, Norton, and Rozier (2007) papers has informed our understanding of how health insurance can address unmet needs for services; the gaps in safety net service provision, particularly the lack of an effective dental care safety net; strategies to recruit providers into programs serving low-income populations; and how variations in program design and marketing affect voluntary take-up of coverage in low income populations.
The lessons of the SCHIP experience have also contributed to a change in the debate over universal health care reform. The success of SCHIP has been a spur to many state legislatures, which, as advocates hoped they might, have now embarked on plans to expand coverage further. SCHIP has provided evidence for the feasibility of building on the existing structure of insurance while illuminating the limits of outreach and marketing in achieving universal coverage.
These sizable contributions to policy and research are particularly impressive given the diminutive size of SCHIP. The program covers < 20 percent as many children as Medicaid, and its total cost is < 3 percent of the cost of the Medicaid program. SCHIP's impact has come about because its design optimally encouraged the states to act as laboratories of policy design. This design has been a springboard for health policy observers and health services researchers, equipped with relevant and timely data and innovative methods, to learn lessons that can be applied to much broader (and costlier) expansions.