Uninsured children and SCHIP - Update

On May 15, Peter R. Orszag, Director of the Congressional Budget Office (CBO), gave testimony on the State Children's Health Insurance Program (SCHIP) to the Subcommittee on Health, House Committee on Energy and Commerce, substantially similar to his testimony to the Subcommittee on Health Care, U.S. Senate Committee on Finance, that was the subject of a previous FR post.

The additional information Orszag presented on May 15 relates to the August 17, 2007, directive from the Centers for Medicare and Medicaid Services (CMS). He stated:

On May 7, 2008, in response to inquiries from the states, CMS released a follow-up letter explaining certain aspects of the August 17 directive. The May 7 letter provides the following clarifications:

• Policies intended to prevent substitution apply only to children entering the program for the first time, not to those already enrolled (unless they leave the program and reapply later);
• States may submit alternatives to the 95 percent coverage test, which CMS will consider and approve if those states present supporting data showing their effectiveness in reducing crowd-out;
• CMS believes most states already meet the 95 percent test and will work with states regarding data sources CMS considers acceptable; and
• The policies stipulated in the August 17 directive do not apply to unborn children.

The clarifications that CMS issued in its letter of May 7 are generally consistent with how CBO originally interpreted the directive of August 17; therefore, CBO has not altered its estimates of the policy’s impact on cost and coverage.

Covering Uninsured Children in the State Children's Health Insurance Program (pdf, 19pp/156kB), May 15, 2008

See also CBO's website on the May 15, 2008, testimony.