SCHIP Proposals: Senate

Title of the bill

Children’s Health Insurance Program Reauthorization Act of 2009.

Status

Originated in the Senate Finance Committee and introduced January 16, 2009.

General Overview

Provides increased appropriations for the State Children’s Health Insurance Program (SCHIP) through 2013, provides states the option of covering pregnant women under SCHIP and certain legal immigrant children and pregnant women under Medicaid and SCHIP, phases out coverage of childless adults, limits coverage of parents, reduces federal matching payments for children above 300% of the federal poverty level (FPL), provides for improved outreach and enrollment of eligible children, requires dental coverage and mental health parity, gives states an option for using SCHIP funds for employer plan premium assistance, requires development of child health quality measures and makes other changes to SCHIP and Medicaid.

Reauthorization of SCHIP and Funding of State Allotments

Appropriates $10.562 billion in funds for fiscal year (FY) 2009 and increasing annual amounts are specified up to $17.406 billion in FY 2013.

Changes formula for state allotments in 2009 to be 110% of the highest of updated actual spending in 2008, updated 2008 allotment, or projected spending for 2009. Increases funding to territories. In general, future state allotments are based on prior year allotments updated for growth in per capita national health spending and the state’s child population growth; allotments for 2011 rebased by updating states’ actual federal payments in 2010 rather than updating allotments. Allotments available to states for two years.  A Child Enrollment Contingency Fund, capped at 20% of the national allotment, would be created to cover state shortfalls associated with enrollment of children in excess of population growth. Any unspent allotments to go to states that have exhausted allotments and contingency funds. Costs of Medicaid presumptive eligibility for children would no longer count against SCHIP allotments.

States are eligible for a performance bonus payment to offset the additional costs resulting from adoption of specific enrollment and retention efforts (see “Outreach and Enrollment”). $3.225 billion would be appropriated for this purpose in 2009, and in each year through 2013 would include appropriated funds not otherwise allotted to states and unexpended state allotments. If Medicaid child enrollment is less than or equal to 10% above a specified baseline, the bonus payment per additional enrollee would equal 15% of per capita Medicaid expenditures for children; for Medicaid child enrollment increases greater than 10% above the baseline, the bonus payment per additional enrollee would be 62.5% of per capita Medicaid expenditures for children. Bonuses would be subject to availability of funds. The Medicaid child baseline enrollment levels would be set to equal the prior year enrollment increased by growth in the population of children in the state plus an additional amount which equals 4 percentage points for 2008 and 2009, 3.5 percentage points for 2010-2012, 3 percentage points for 2013-2015 and 2 percentage points in subsequent years. For the purposes of determining enrollment, only children who are formally deemed eligible would be counted, not those who are presumptively eligible only.

Coverage Expansions

Provides states the option of covering pregnant women up to the state’s income eligibility level for children and automatic enrollment of newborns.

Creates a new state option to provide Medicaid and SCHIP coverage to legal immigrant children and pregnant women who meet eligibility requirements but would be denied coverage under existing law (which imposes a 5-year delay in eligibility for legal immigrants). Clarifies that nothing in the bill allows federal payment for individuals who are not legal residents, and that Medicaid and SCHIP laws provide for the disallowance of erroneous federal expenditures.

Reduces federal matching funds from the state’s SCHIP enhanced matching rate to its Medicaid matching rate for children in families with incomes above 300% of the FPL (including income disregarded by the state in determining SCHIP eligibility), unless the state has an approved waiver or state plan amendment in effect on the date of enactment or has enacted by then a state law to submit such a plan amendment.

Makes several changes to phase out coverage of childless adults and limit coverage of parents. Approval or renewal of federal waivers providing coverage of nonpregnant childless adults would be prohibited, and existing coverage ended by December 31, 2010. States could apply for a Medicaid waiver (as opposed to an SCHIP waiver) to continue coverage of this population.

Approval or renewal of SCHIP waivers providing coverage to parents of low-income children would be prohibited, and existing coverage phased out by the end of fiscal year 2011. States may continue coverage in 2012 and 2013 with a fixed amount of the state’s allotment set aside for this purpose, and the SCHIP federal matching rate would be reduced in 2012 unless a state meets certain outreach or coverage benchmarks for children. Other states would receive the Medicaid matching rate only. In 2013, states that received the enhanced match in 2012 and met the 2012 benchmarks would receive a federal matching rate set between the Medicaid and SCHIP amounts; other states would receive the Medicaid matching rate only.

A study by the Government Accountability Office on whether SCHIP coverage of parents increases enrollment of children would be reported within 2 years.

Other changes to SCHIP or  Medicaid coverage for children

Requires SCHIP coverage of dental services effective October 1, 2009 and additional reporting and education requirements related to dental services. In providing dental coverage, states may provide the benefit as specified or use a benchmark dental benefit package equivalent to dental coverage under the FEHBP, most common state employees plan for dependents, or a commercial dental plan. States may not prevent community health centers from contracting with private dental providers under Medicaid or SCHIP.

Requires that SCHIP plans meet federal mental health parity requirements.

Requires states to provide SCHIP enrollees with notice and a grace period for payment of premiums of at least 30 days prior to termination of coverage.

Provides state option to offer a premium assistance subsidy if the employer contributes at least 40% of the premium and the plan meets other requirements. High deductible and flexible spending account plans would not qualify. Other plans may qualify but in this case states must meet a cost effectiveness test by demonstrating that the cost of premium assistance is less than the cost of SCHIP for the individual child or family or in the aggregate. States must provide supplemental coverage to ensure that SCHIP benefits and cost sharing protections are met, and must provide outreach assistance for children likely to be eligible. Employer plans must permit enrollment of children with premium assistance subsidies outside of annual open enrollment periods.

Clarifies that under SCHIP. states may provide covered items and services furnished through school based health centers.

Outreach and enrollment

States would receive a performance bonus payment (see “Reauthorization of SCHIP and State Allotments”) if they implement at least 4 of the following: 1) 12 months continuous eligibility for all children under Medicaid and SCHIP, 2) elimination of all asset tests or institution of administrative verification of assets, 3) elimination of a general in-person interview requirement for initial eligibility or renewal, 4) joint application for Medicaid and SCHIP, 5) automatic renewal, 6) presumptive eligibility for children under both Medicaid and SCHIP, 7) “express lane” eligibility (a new state option described below), and 8) premium assistance subsidies.

Provides $100 million for 2009-2013 for grants to increase participation of children eligible for Medicaid or SCHIP, with 10% set aside for a national enrollment campaign and 10% set aside for outreach to, and enrollment of, children who are Indians. Includes other provisions to increase enrollment of children who are Indians.  

Effective upon enactment and through fiscal year 2013, provides states the option of using an “express lane” process for determining a child’s eligibility under Medicaid or SCHIP. Under this process, income determinations made through application for federal programs including temporary assistance to needy families (TANF), Food Stamps, child nutrition and school lunch programs, along with those made by other state designated agencies, can be used to determine eligibility for Medicaid or SCHIP. Under this option, states must provide for a regular eligibility determination if a child is found to be ineligible using the “express lane” process, and must give notice and offer a regular eligibility determination to children found eligible for SCHIP if a lower premium payment might result. In addition, states must meet citizenship verification and “screen and enroll” requirements.

Increases federal matching rate for translation or interpretation services under Medicaid to 75% and under SCHIP to the higher of 75% or the state’s SCHIP matching rate plus 5 percentage points.

Requires states to document procedures used to reduce administrative barriers to enrollment and deems a state to meet the requirement if it uses a joint application for Medicaid and SCHIP and permits application other than in person.

Clarifies current law requirements regarding citizenship documentation and provides a new state option to modify documentary evidence requirements for proof of citizenship for Medicaid and SCHIP effective January 1, 2010.

Directs the Secretary of HHS to consult with state Medicaid and SCHIP directors and within 18 months of enactment develop a model process for coordination of enrollment and coverage across states for children who are outside their state of residency because they are migrant families, experience emergency evacuation, for educational needs, or for other reasons.

Creates a task force to conduct a nationwide campaign of education and outreach for small business concerns regarding the availability of coverage for children through private insurance options, Medicaid, and SCHIP. The task force will consist of the Secretaries of Labor, HHS, and Treasury and the Administrator of the Small Business Administration.

Other provisions

Requires the Secretary of HHS to develop core pediatric quality measures for children in Medicaid and SCHIP and to encourage voluntary reporting by states. For 2009-2013, appropriates $45 million annually for these activities, including $20 million for a program of grants to states and child health providers related to improving quality and use of information technology, $5 million for a model electronic health record for children enrolled in Medicaid or SCHIP, and $1 million for an Institute of Medicine study of pediatric quality measures.

Funding of $25 million is provided for a childhood obesity demonstration project. 

Certain existing requirements for Medicaid managed care plans would be extended to SCHIP, including those relating to provision of information to enrollees, beneficiary protections, and quality assurance. Requires the GAO to report within 18 months on the extent to which Medicaid managed care organizations are actuarially sound.

Additional $20 million in funding for data collection in 2009 provided to determine state numbers on uninsured children and Medicaid and SCHIP enrollees.

Requires application of the Medicaid prospective payment system for federally qualified health centers and rural health clinics to SCHIP, and provides $5 million in FY 2009 for grants to states for transitioning to compliance with this requirement.

Requires an updated evaluation of SCHIP by December 31, 2011.

The term “CHIP” is deemed a reference to SCHIP, and a number of other changes to Medicaid and SCHIP are included.

Creates the Medicaid and CHIP Payment Access Commission to review policies and make recommendations to Congress regarding children’s access to covered services.

Financing

Increased tobacco taxes, along with a change in timing of certain corporate income taxes in 2013. The legislation provides for a drop in SCHIP baseline spending beginning in 2014.

Effective date

Generally, April 1, 2009.