The State Children's Health Insurance Program (SCHIP) was enacted in 1997 to provide health insurance coverage for uninsured low-income children who do not meet Medicaid eligibility criteria. SCHIP was authorized for 10 years and was up for reauthorization in 2007. Because SCHIP is a capped grant and not an entitlement program, it has a fixed annual funding level and shortfalls were predicted to occur if federal funding was not expanded with the reauthorization. When faced with restricted funding in the past, states adopted different strategies to control the size of their SCHIP caseloads, including adjusting the processes by which families apply for and renew their coverage. The Congressional Budget Office estimated that federal funding would need to be increased by $7.8 billion over the next 5 years (2008–2012) to maintain current programs (Congressional Budget Office 2007
). At the time of this writing, President Bush and Congress had reached an impasse over the amount by which SCHIP funding should be expanded, with the President twice vetoing reauthorization bills passed by Congress. As a temporary solution, federal SCHIP funding was extended through March 31, 2009 with the enactment of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (S. 2499).
Motivating the national debate over SCHIP reauthorization are concerns about the appropriate income eligibility limit and crowd-out of employer-sponsored insurance. As a result, in addition to funding levels, SCHIP program eligibility is under examination. President Bush has emphasized refocusing “SCHIP on low-income, uninsured children below 200 percent of the Federal poverty level as the program was originally intended” (OMB 2007
). In August 2007, the Centers for Medicare and Medicaid Services issued new guidance for providing coverage to children with family income above 250 percent of the federal poverty level (FPL). States must demonstrate that they have enrolled at least 95 percent of eligible children below 200 percent of the FPL in Medicaid or SCHIP and that employer-based coverage of low-income children has not decreased by more than two percentage points during the prior 5 years (CMS 2007
). Consequently, states may reconsider how they conduct their eligibility determinations when children are due to renew their coverage.
States can meet federal eligibility screening requirements by using existing information from state and federal agencies, thereby allowing families to self-declare income. In 2007, however, only 9 SCHIP programs and 11 Medicaid programs allowed self-declaration of income (Ross, Horn, and Marks 2008
). All other states required documentation to verify income. Interviews of SCHIP administrators and descriptive analyses of state administrative data indicate that active redetermination procedures, which require families to submit documents to verify their eligibility, are a significant barrier to enrollee retention (Hill and Lutzky 2003
). Retention is important because children who experience interruptions in health insurance coverage are more likely to have worse access to care and greater unmet health care needs (Szilagyi et al. 2000
; Olson, Tang, and Newacheck 2005
A comparison of SCHIP renewal policies in four states found marked differences in retention based on the redetermination procedures used. Dick et al. (2002)
analyzed SCHIP programs in Florida, Kansas, New York, and Oregon, using data from 2000 and 2001. Florida had a passive renewal process at the time, while the other states had active renewal processes. Under passive renewal, families whose children were in Florida's SCHIP, the Florida Healthy Kids Program (FHKP), received a letter notifying them about renewing their children's coverage. Families were asked to review the income information in the letter and report any changes to the FHKP. They also were asked to report changes in access to employer-sponsored health insurance for their children. Families who did not respond maintained their children's coverage if they continued to pay their premiums. The programs with active renewal processes required families to provide proof of income and complete renewal forms to continue coverage. Dick et al. (2002)
found that 33–50 percent of children disenrolled at their first redetermination in the states with active renewal processes; in contrast, they found that 5 percent of children in the FHKP disenrolled at redetermination under the passive renewal process. More recent analyses of SCHIP enrollment patterns have used the renewal month as a control variable when examining the effect of premiums on enrollment and disenrollment behaviors (Kenney et al. 2007
; Marton 2007
), but none have explored the impact of a change in the renewal process on disenrollment.
This study examines the impact of renewal policy changes on the risk of disenrollment in the FHKP. In addition, we examine whether the policy changes had a differential impact on children with different health status levels. We also control for sociodemographic characteristics that may influence parents' decisions to renew their children's coverage. Effective July 1, 2004, the passive renewal process for the FHKP was replaced with active redetermination. The active renewal process requires families to complete a Renewal Request Form annually supplemented with (1) proof of income and (2) information about their access to employer-sponsored family coverage and the cost of such coverage if it is available to them. If families do not provide all of the required documentation, their children are disenrolled from the program.
This study extends the analysis by Dick et al. (2002)
in three ways. First, we use multivariate survival analysis techniques which allow us to examine multiple factors that may influence children's disenrollment at redetermination. These factors include family income, rural or urban residence, and child age, gender, and health status. This was not possible in the Dick et al. (2002)
analyses because of differences in data availability across the states. Second, we take into account program transition, so a child is not considered disenrolled until s/he leaves public health insurance altogether. Finally, we include long-term program enrollees instead of including only children who were newly enrolled during the observation period.