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State Children's Health Insurance Program: CMS Should Improve Efforts to Assess whether SCHIP Is Substituting for Private Insurance

GAO-09-252 Published: Feb 20, 2009. Publicly Released: Mar 23, 2009.
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Highlights

Congress created the State Children's Health Insurance Program (SCHIP) to reduce the number of uninsured children in low-income families that do not qualify for Medicaid. States have flexibility in structuring their SCHIP programs, and their income eligibility limits vary. Concerns have been raised that individuals might substitute SCHIP for private health insurance--known as crowd-out. GAO was asked to examine the Centers for Medicare & Medicaid Services' (CMS) and states' efforts to minimize crowd-out and determine whether it should be a concern. GAO examined (1) CMS's guidance to states for minimizing crowd-out and assessment of whether it should be a concern and (2) states' policies to minimize crowd-out and how they assess whether it should be a concern. To do the work, GAO reviewed federal laws and guidance, examined state annual reports, and interviewed CMS officials. GAO also interviewed SCHIP officials from nine states.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Centers for Medicare & Medicaid Services To improve information on whether crowd-out should be a concern in SCHIP, the Acting Administrator of CMS should refine CMS policies and guidance to better collect consistent information on the extent to which applicants have access to available and affordable private health insurance for their children eligible for SCHIP. Such actions should include ensuring that states collect and report consistent information on the extent to which SCHIP applicants have private insurance available to them.
Closed – Implemented
CMS modified its 2009 CHIP annual report template to include new questions to help assess if private health insurance is available to CHIP applicants and if such available insurance is affordable. Also, CMS now asks that all states respond to all questions in the substitution of coverage (crowd-out) section of the annual report and includes specific instructions on how states should calculate the incidence of substitution.
Centers for Medicare & Medicaid Services To improve information on whether crowd-out should be a concern in SCHIP, the Acting Administrator of CMS should refine CMS policies and guidance to better collect consistent information on the extent to which applicants have access to available and affordable private health insurance for their children eligible for SCHIP. Such actions should include ensuring that states take appropriate steps to determine whether available private health insurance is affordable for SCHIP applicants.
Closed – Implemented
CMS modified its 2009 CHIP annual report template to include new questions to help assess if private health insurance is available to CHIP applicants and if such available insurance is affordable. Also, CMS now asks that all states respond to all questions in the substitution of coverage (crowd-out) section of the annual report and includes specific instructions on how states should calculate the incidence of substitution.

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Topics

ChildrenCrowd-outData collectionData integrityDisadvantaged personsEligibility criteriaEligibility determinationsFamiliesFederal fundsstate relationsHealth care cost controlHealth care costsHealth care programsHealth insuranceIncome statisticsInsuranceMedicaidProgram evaluationRequirements definitionRisk factorsState-administered programs