Children's Health Insurance: SCHIP Enrollment and Expenditure	 
Information (25-JUL-01, GAO-01-993R).				 
								 
Congress created the State Children's Health Insurance Program	 
(SCHIP) in 1997 to reduce the number of  uninsured children poor 
whose families incomes are are too high to qualify for Medicaid. 
Congress appropriated $40 billion over 10 years (fiscal years	 
1998 through 2007) for SCHIP. Each state's SCHIP allotment is	 
available as a federal match based on state expenditures.	 
Although the SCHIP statute generally targets children in families
with incomes up to 200 percent of the federal poverty level, 13  
states' programs cover children in families above 200 percent of 
the federal poverty level. This report provides information on	 
(1) enrollment and federal expenditures for SCHIP and estimates  
of the number of and costs to enroll eligible unenrolled children
and income-eligible pregnant women and (2) factors that may	 
influence states' future expenditures for SCHIP and the 	 
availability of funding for any program expansion.		 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-01-993R					        
    ACCNO:   A01466						        
    TITLE:   Children's Health Insurance: SCHIP Enrollment and        
             Expenditure Information                                          
     DATE:   07/25/2001 
  SUBJECT:   Health insurance cost control			 
	     Health insurance					 
	     Children						 
	     State-administered programs			 
	     Statistical data					 
	     Disadvantaged persons				 
	     Medicaid Program					 
	     State Children's Health Insurance			 
	     Program						 
								 

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GAO-01-993R
     
GAO- 01- 993R SCHIP Enrollment and Expenditures

United States General Accounting Office Washington, DC 20548

July 25, 2001 The Honorable Christopher S. Bond Ranking Minority Member
Committee on Small Business United States Senate

Subject: Children?s Health Insurance: SCHIP Enrollment and Expenditure
Information

Dear Senator Bond: The Congress created the State Children?s Health
Insurance Program (SCHIP) in 1997 to reduce the number of low- income
uninsured children in families with incomes that are too high to qualify for
Medicaid, the federal- state program that provides health care coverage to
certain categories of low- income adults and children. 1 The Congress
appropriated $40 billion over 10 years (fiscal years 1998 through 2007) for
SCHIP and, on the basis of a formula accounting for the number of a state?s
low- income children, allocates funds annually to the 50 states, the
District of Columbia, and the U. S. commonwealths and territories. Each
state?s SCHIP allotment is available as a federal match based on state
expenditures. 2 Although the SCHIP statute generally targets children in
families with incomes up to 200 percent of the federal poverty level, 13
states? programs cover children in families above 200 percent of the federal
poverty level. 3

Expanding the SCHIP- eligible population beyond children to include adults
is an issue of ongoing interest. Some analysts have suggested that providing
health

1 Established as title XXI of the Social Security Act by Public Law 105- 33,
SCHIP is set out at 42 U. S. C. sect. 1397aa et seq. 2 SCHIP and Medicaid both
are financed jointly by the states and the federal government under a
formula in which a state?s share of program expenditures is based on its per
capita income in relation to the national average. The federal share of
expenditures for Medicaid can range from 50 to 83 percent, with the national
average federal matching rate at about 57 percent. SCHIP offers an
?enhanced? federal matching rate derived from the states? Medicaid rate,
with a national average federal share of about 70 percent. Each state?s
SCHIP match is equal to 70 percent of its Medicaid matching rate plus 30
percentage points, not to exceed a federal share of 85 percent.

3 Two hundred percent of the federal poverty level translated to $35, 300
for a family of four in 2001. The statute allows a state to expand
eligibility to 200 percent of the poverty level or up to 50 percentage
points above its Medicaid eligibility standard as of March 31, 1997. See 42
U. S. C. sect. 1397jj( b)( 1)( B)( ii)( I).

GAO- 01- 993R SCHIP Enrollment and Expenditures 2 insurance to parents may
lead to increased insurance coverage among children. 4

Medicaid set a precedent for a public program to provide health care
coverage for pregnant women. Since the late 1980s, Medicaid has covered
eligible pregnant women with the goal of reducing infant deaths and poor
birth outcomes (currently, Medicaid requires states to cover pregnant women
with incomes up to 133 percent of the federal poverty level). Although the
SCHIP statute allows a state to enroll the parents of eligible children if
the state can demonstrate it is cost- effective to do so, the cost-
effectiveness test is difficult to pass. 5 Recent legislative proposals
would broaden states? ability to spend federal SCHIP funds to insure the
parents of children in public health programs and pregnant women who meet
SCHIP income- eligibility criteria.

In response to your concern about ensuring that SCHIP funding is adequate to
cover eligible children before considering expansion to others, we are
providing information on (1) enrollment and federal expenditures for SCHIP
and estimates of the number of and costs to enroll eligible unenrolled
children and incomeeligible pregnant women and (2) factors that may
influence states? future expenditures for SCHIP and the availability of
funding for any program expansion. To do our work, we analyzed the March
supplements of the 1998 through 2000 Current Population Surveys for data on
insurance coverage; interviewed officials from the Centers for Medicare and
Medicaid Services (CMS), 6 which has oversight responsibility for both SCHIP
and Medicaid, and the Health Resources and Services Administration (HRSA),
which shares oversight responsibilities for SCHIP with CMS; reviewed the
most current, available SCHIP enrollment and expenditure data through 2000;
7 interviewed private researchers with knowledge of state programs and SCHIP
projections; and reviewed the SCHIP statute. We relied on prior and ongoing
work and relevant published literature to identify

4 Leighton Ku and Matthew Broaddus, The Importance of Family- Based
Insurance Expansions: New Research Findings About State Health Reforms
(Washington, D. C.: Center on Budget and Policy Priorities, Sept. 5, 2000),
p. 14.

5 Cost- effectiveness is achieved when the cost of covering both the adults
and children in a family does not exceed the cost of covering only the
eligible children. See Children?s Health Insurance Program: State
Implementation Approaches Are Evolving (GAO/ HEHS- 99- 65, May 14, 1999),
pp. 61- 67.

6 On June 14, 2001, the Secretary of Health and Human Services announced
that the name of the Health Care Financing Administration (HCFA) had been
changed to the Centers for Medicare and Medicaid Services. In this report,
we will continue to refer to HCFA where our findings apply to the
organizational structure and operations associated with that name.

7 The most current ?point- in- time? data for SCHIP enrollment we identified
are from a survey of all 50 states and the District of Columbia that allows
for comparison of state enrollment from June 1999 through June 2000,
conducted by Vernon K. Smith, Ph. D., CHIP Program Enrollment: June 2000
(Washington, D. C.: The Kaiser Commission on Medicaid and the Uninsured,
Jan. 2001), p. 2. In its SCHIP enrollment reports, HCFA provided the number
of children ever enrolled during a calendar quarter or federal fiscal year.
Because of ongoing enrollment attrition, the number of children who are ever
enrolled in a quarter or a year will be larger than the number enrolled at
any point in time during that period.

GAO- 01- 993R SCHIP Enrollment and Expenditures 3 factors that influence
states? SCHIP enrollment and expenditures. (For detail on

our methodology for determining enrollment and expenditures, see enc. I.) We
did our work from April through July 2001 in accordance with generally
accepted government auditing standards.

The following summarizes information on actual and estimated SCHIP
enrollment and expenditures:

About 2.3 million children were enrolled in SCHIP as of June 2000, the most
current date for which a specific monthly enrollment figure was available.
We estimated that another 2.8 million children may have been eligible but
not enrolled at that time.

Of the cumulative $12.6 billion in available federal allotments to states
for fiscal years 1998 through 2000, the states spent about $2.9 billion (23
percent) by the end of fiscal year 2000, leaving approximately $9.7 billion
(77 percent) unspent and available for future years (see enc. II). 8

Fiscal year 2000 expenditures were about $1.9 billion. We estimated that
fiscal year 2000 SCHIP expenditures would have been between $3.3 billion and
$3.9 billion, depending on the success with which states might have enrolled
additional eligible children who were not enrolled as of June 2000 (see enc.
III). 9 While these amounts are significantly greater than the actual $1.9
billion the states spent during that year, they are within the total SCHIP
appropriation of $4.2 billion for 2000.

Providing coverage to an estimated 41,000 pregnant women whose incomes met
states? eligibility levels for SCHIP in fiscal year 2000 would have cost an
estimated $247 million to $288 million if all those eligible were enrolled.

States? future SCHIP expenditures for both children and income- eligible
pregnant women will be influenced by a variety of economic and demographic
factors and state policy choices, such as the following:

Any increase in the cost of health care services will affect the amount of
SCHIP expenditures if SCHIP beneficiaries continue to use these services to
the same or a greater degree. The CMS Office of the Actuary projects that

8 The SCHIP statute made a state?s yearly allotment available for 3 years.
Thus, the fiscal year 1998 allocation was made available from October 1,
1997, through September 30, 2000. The Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (BIPA), enacted December 21, 2000,
amended statutory provisions for redistributing funds from states with
unspent allotments to states that had spent all of their annual SCHIP
allotments for those years. The change allows states that did not spend all
of their annual allotments to keep any unused funds not needed to cover the
expenditures of the states that spent in excess of their allotments for 1998
and 1999. The 1998 and 1999 redistributions are available to states through
2002.

9 Not all children who are eligible for a public program will enroll.
Researchers have found that public program ?take- up rates? range from 40
percent to 70 percent. Therefore, we developed scenarios based on this range
of expected enrollment of children who were eligible but uninsured. See
Sherry A. Glied, Challenges and Options for Increasing the Number of
Americans With Health Insurance (New York, N. Y.: The Commonwealth Fund,
Dec. 2000), pp. 7- 9.

GAO- 01- 993R SCHIP Enrollment and Expenditures 4 health care inflation will
increase and be between 3.6 percent and 4.2 percent

from 2001 through 2007, or an average of 4.1 percent per year.

Any changes in the number of SCHIP- eligible children also would influence
expenditures if these children were enrolled. The Bureau of the Census
estimates that the number of children through age 19 will increase an
average of 0.37 percent per year from 2001 through 2007, or a total of about
2.2 percent through the remaining years of the program?s authorization.
Changes in the economy may also affect the number of families with incomes
that fall within SCHIP eligibility limits.

Trends in the private insurance market are less certain and may increase or
decrease the availability of employer- sponsored or privately purchased
health insurance for persons at lower incomes.

Slowdowns in economic growth may affect states? efforts to address the
demand for public financing of health services. Some states may respond by
increasing health care spending to reduce the numbers of uninsured children,
while others may curtail their health care spending as a result of increased
pressure on state budgets.

States may choose to expand eligibility for children in the SCHIP program.
For example, as of July 1, 2001, Maryland expanded its SCHIP coverage of
children in families with incomes from 200 percent to 300 percent of the
federal poverty level. (See enc. IV for states? current eligibility levels.)

Additional states may seek authority to enroll adults in SCHIP. HCFA has
approved section 1115 demonstration waivers for four states (Minnesota, New
Jersey, Rhode Island, and Wisconsin) to enroll parents of children eligible
for public health insurance programs, within state- defined income levels,
without a cost- effectiveness test. As of July 20, 2001, California had a
waiver request pending. 10 Massachusetts? and Wisconsin?s original SCHIP
plans authorized the states to provide family coverage when it proves cost
effective.

Because unused SCHIP funds can be redistributed among states, one state?s
choice to incur additional expenditures for eligible children or adults
would affect the amount of available unused funds that another state could
use for children.

We did not seek agency comments on this correspondence because it does not
focus on agency activities. However, we briefed responsible officials within
CMS and HRSA on our findings and incorporated their technical suggestions
where appropriate.

- - - - 10 Section 1115 of the Social Security Act allows the Secretary of
Health and Human Services to waive many statutory SCHIP requirements, thus
enabling states to conduct demonstration projects that may provide
additional opportunities to develop innovative methods for expanding
children?s coverage, promoting participation in SCHIP and Medicaid, and
improving the scope and quality of the services available to children.

GAO- 01- 993R SCHIP Enrollment and Expenditures 5 As arranged with your
office, unless you release its contents earlier, we plan no

further distribution of this correspondence until 30 days after its issuance
date. At that time, we will send copies to the Secretary of Health and Human
Services, the Administrators of CMS and HRSA, and other interested parties.
This correspondence also will be available on GAO?s home page at http://
www. gao. gov. If you or your staff have any questions regarding this
correspondence, please contact me at (202) 512- 7118 or Carolyn Yocom at
(202) 512- 4931. Staff acknowledgments are listed in enclosure V.

Sincerely yours, Kathryn G. Allen Director, Health Care- Medicaid

and Private Health Insurance Issues Enclosures - 5

Enclosure I Enclosure I GAO- 01- 993R SCHIP Enrollment and Expenditures 6
METHODOLOGY FOR DEVELOPING SCHIP ENROLLMENT

AND EXPENDITURE INFORMATION This enclosure describes our methods to develop
information on (1) SCHIP enrollment and expenditures, (2) an estimate of the
number of children eligible for but not enrolled in SCHIP, and (3) estimated
federal expenditures if states enrolled both a greater number of eligible
children and income- eligible pregnant women.

SCHIP ENROLLMENT AND EXPENDITURES

To identify SCHIP enrollment in 2000, ]we reviewed the most current data
available representing specific ?point- in- time? enrollment for all 50
states and the District of Columbia published by the Kaiser Commission on
Medicaid and the Uninsured. 11 Monthly point- in- time data are different
from another commonly reported measure of enrollment- the number of children
?ever enrolled? during a calendar quarter or federal fiscal year- which is
often reflected in enrollment reports from CMS. We used point- intime
enrollment because it is comparable to our estimate of unenrolled eligible
children that is calculated from the Current Population Survey (CPS). 12 To
determine expenditures of SCHIP federal allotments from federal fiscal years
1998 through 2000, we used state- reported information from HCFA?s on- line
expenditure data system, the Medicaid and State Children?s Health Insurance
Program Budget and Expenditure System.

ESTIMATED CHILDREN ELIGIBLE BUT NOT ENROLLED, AND THOSE LIKELY TO ENROLL

In order to estimate the number of children eligible for but not enrolled in
SCHIP, and the number likely to enroll, we used the Bureau of the Census?
March supplements of the CPS for information on children?s insurance status,
income, and demographic characteristics such as age. 13 Because CPS counts
are based on samples, we combined 3

11 See Vernon K. Smith, Ph. D., CHIP Program Enrollment: June 2000
(Washington, D. C.: The Kaiser Commission on Medicaid and the Uninsured,
Jan. 2001). The unit of eligibility for SCHIP in most cases is a calendar
month, and some children gain and lose eligibility from month to month.
Therefore, the number of children who are ever enrolled in a quarter or year
will be larger than the number enrolled in a specific month during that
period.

12 The CPS questions on health insurance refer to the previous year.
However, some analysts consider that the CPS reflects the health insurance
status of individuals in the survey during a point in time, for example, a
typical month, rather than at any time during the previous year. See, for
example, Paul Fronstin, Counting the Uninsured: A Comparison of National
Surveys (Washington, D. C.: Employee Benefit Research Institute, Sept.
2000), pp. 4- 5.

13 The CPS is based on a sample designed to represent a cross- section of
the nation?s civilian noninstitutional population. For each of the March
surveys, about 60, 000 households were sampled, and about 47, 000 of them,
containing approximately 94, 000 persons 15 years of age or older, were
interviewed. The CPS can be used to calculate state- specific estimates of
the uninsured; however, estimates for some states may be less accurate,
particularly those for smaller states, which have small sample sizes.

Enclosure I Enclosure I GAO- 01- 993R SCHIP Enrollment and Expenditures 7
years of CPS data, from 1998 through 2000, to improve the reliability of the
estimates.

These surveys represented children?s insurance status from 1997 through
1999. If a child was reported to have had insurance at any time during the
year, we considered that child to be insured.

Additionally, we made adjustments to the CPS data to reflect state- specific
Medicaid and SCHIP income exclusions, the likelihood of some substitution of
public for private insurance, and the expected enrollment of fewer than all
eligible children. The SCHIP statute requires states first to determine a
child is ineligible for Medicaid in order to consider the child for SCHIP.
In their determination of income eligibility for both programs, states may
exclude certain family income, referred to as income disregards, in order to
increase eligibility for both programs. 14 Income disregards typically
include some portion of family income such as Supplemental Security Income
(SSI), a portion of earnings, or child care expenses. In order to identify
uninsured children with family incomes meeting SCHIP standards, for each
state we adjusted income using Medicaid and SCHIP income disregards. 15
Because the CPS does not identify child care expenses, we assumed disregards
at the level of state- specific maximums for all children in a family
through age 12. If a state did not set a maximum child care disregard, we
used a national average annual child care payment of $3,432 for each child
through age 12 in a family. 16 Since we assumed child care disregards for
all children through age 12, this may have the effect of overstating the
number of families that actually pay for child care and increasing the
number of children qualifying for either Medicaid or SCHIP.

Additionally, our estimate addressed the likelihood that some families may
drop their existing private coverage in order to enroll children in SCHIP- a
phenomenon known as

?crowd out.? To adjust for crowd out, we added to the estimate of uninsured
SCHIPeligible children a number equal to 20 percent of the number of
children whose family incomes met the SCHIP eligibility requirements but
were reported as being insured. 17

14 The SCHIP statute contains a provision that, in order for a child to be
eligible for SCHIP- funded coverage, the child?s family income must exceed
the Medicaid income level that was in effect on March 31, 1997. 15 We used
Medicaid and SCHIP income disregards as of October 1998, as reported by
Leighton Ku, Frank Ullman, and Ruth Almeida, What Counts? Determining
Medicaid and CHIP Eligibility for Children (Washington, D. C.: The Urban
Institute, 1999). All but four states used Medicaid disregards. States with
SCHIP income disregards included Alabama, California, Colorado,
Massachusetts, Michigan, North Carolina, Vermont, and Virginia.

16 See Linda Giannarelli and James Barsimantov, Child Care Expenses of
America?s Families (Washington, D. C.: The Urban Institute, Dec. 2000), pp.
3- 4. 17 The Congressional Budget Office (CBO) estimates that 20 percent of
those who would have otherwise had insurance will participate in SCHIP.

Enclosure I Enclosure I GAO- 01- 993R SCHIP Enrollment and Expenditures 8
Finally, because not all eligible uninsured children are eventually enrolled
in public

programs, we developed three scenarios for states? enrollment of a greater
number of eligible children by using ?take- up rates? of 40 percent (low-
level additional enrollment), 55 percent (medium- level), and 70 percent
(high- level) of our estimate. 18 Therefore, we estimated states? additional
enrollment of eligible children in 2000 by adding to the actual June 2000
enrollment figures a number that is (1) the estimated number of children
whose families would drop private insurance coverage in order to enroll in
SCHIP and (2) 40 percent, 55 percent, and 70 percent, respectively, of the
estimated number of eligible uninsured children; this number is reduced by
the number of children representing the actual change in SCHIP enrollment
from June 1999 through June 2000. 19

ESTIMATED FEDERAL EXPENDITURES FOR ENROLLMENT OF ADDITIONAL CHILDREN AND
PREGNANT WOMEN

To estimate expenditures in fiscal year 2000 for states to enroll both a
greater number of eligible children and income- eligible pregnant women, we
developed a state- specific fiscal year 2000 cost estimate for SCHIP
children and a national estimate of the number of income- eligible pregnant
women and the costs to insure them. We estimated federal expenditures for
enrollment of additional children by multiplying our per- child cost
estimates by each of the three enrollment scenarios.

For each state, we developed a cost per child by dividing the state?s fiscal
year 2000 federal expenditures by its full- year- equivalent enrollment. We
approximated full- yearequivalent enrollment by using states? reports of the
total number of months of children?s enrollment (called ?member months?) and
dividing that number by 12. 20 For example, one child may be enrolled in the
program for 6 months, while another remains enrolled for 9 months. Together,
the number of children?s member months is 15. Calculating the full- year-
equivalent enrollment provides a more specific estimate of the average
annual cost per child.

18 Research findings indicate that public program take- up rates range from
40 percent to 70 percent. Additionally, in December 1997 CBO estimated that
about 55 percent of children who were uninsured and eligible for SCHIP would
enroll (corresponding to our medium- level scenario).

19 Nine states (Alaska, Kentucky, Minnesota, Montana, Nevada, North Dakota,
West Virginia, Wisconsin, and Wyoming) and the District of Columbia enrolled
more children from 1999 through 2000 than the CPS estimated were available
to be enrolled in some or all of our scenarios (using 40, 55, or 70 percent
of the estimated number of eligible uninsured children). Therefore, we used
the actual June 2000 enrollment figure for the scenarios in which there were
no calculated additional children to enroll in a state.

20 For the states that did not report member months for 1 of the 4 quarters
in fiscal year 2000, we imputed the missing quarter by assuming the missing
quarter member months would be in the same ratio to expenditures as that of
the prior quarter?s member months to that quarter?s expenditures. Because
reports from Alabama and Alaska did not provide enough data to make full-
year- equivalent calculations, we used the number of children ever enrolled
in fiscal year 2000 from HCFA?s on- line Statistical Enrollment Data System
(SEDS) for these states.

Enclosure I Enclosure I GAO- 01- 993R SCHIP Enrollment and Expenditures 9 We
estimated the number of pregnant women whose family incomes were within the

SCHIP income eligibility range by using the number of eligible infants as a
proxy. To the number of infants enrolled in SCHIP in fiscal year 2000 we
added the CPS estimate of uninsured infants who were eligible but not
enrolled, reduced by the change in enrollment of infants from 1999 through
2000. 21 This calculation yielded an estimate of 41,107 pregnant women who
met SCHIP income eligibility criteria in 2000. We used a cost estimate for
maternity coverage of between $6,000 and $7,000 per pregnant woman provided
by the National Perinatal Information Center. Our estimate of the number of
eligible pregnant women and the cost to insure them may be overstated
because (1) teenage pregnant women may already be eligible for SCHIP as
children and (2) we assume 100 percent enrollment rather than a low-,
medium-, high- enrollment scenario.

21 A monthly point- in- time enrollment figure for infants was not available
for 1999 or 2000. Therefore, we used state- reported fourth quarter
enrollment for 1999 and 2000 from the SEDS system.

Enclosure II Enclosure II GAO- 01- 993R SCHIP Enrollment and Expenditures 10
SCHIP APPROPRIATIONS AND EXPENDITURES

Fiscal year Annual appropriation

Cumulative annual appropriation Annual federal

expenditures Cumulative

annual federal expenditures

1998 $4,224,262,500 $4,224,262,500 $121,232,954 $121,232,954 1999
4,204,312,500 8,428,575,000 901,848,306 1,023,081,260 2000 4,204,312,500
12,632,887,500 1,867,165,308 2,890,246,568 2001 4,204,312,500 16,837,200,000
2002 3,082,125,000 19,919,325,000 2003 3,142,125,000 23,061,450,000 2004
3,142,125,000 26,203,575,000 2005 4,039,875,000 30,243,450,000 2006
4,039,875,000 34,283,325,000 2007 4,987,500,000 39,270,825,000

Note: The cumulative annual appropriation through 2007 to the states and the
District of Columbia totals less than the total statutory appropriation of
$40 billion because of two allocations. First, each year 0.25 percent of the
total SCHIP appropriation is allocated to the U. S. territories and
commonwealths. Second, two diabetes research programs receive $60 million a
year through 2002 ($ 300 million in total) from the appropriation.

Source: GAO analysis of HCFA data.

Enclosure III Enclosure III GAO- 01- 993R SCHIP Enrollment and Expenditures
11 SCHIP EXPENDITURES FOR FISCAL YEAR 2000:

ACTUAL EXPENDITURES AND ESTIMATED EXPENDITURES FOR ADDITIONAL ELIGIBLE
UNENROLLED CHILDREN

Dollars in thousands

Estimated fiscal year 2000 expenditures including costs for a

State Fiscal year

2000 allotment

Actual fiscal year 2000 expenditures

Total unspent allotments at

end of fiscal year 2000 b

Low level of additional enrollment c

Medium level of additional enrollment

High level of additional enrollment

Alabama $77,012 $31,948 $191,246 $59,081 $64,685 $70,289 Alaska d 7,730
18,089 -419 18,086 18,086 18,740 Arizona 130,213 29,406 325,015 67,006
79,925 92,845 Arkansas 53,754 1,523 147,141 13,114 14,770 16,426 California
765,548 187,279 2,213,789 387,612 443,106 498,599 Colorado 46,890 13,918
106,331 21,639 23,804 25,969 Connecticut 39,225 12,761 83,916 52,843 56,543
60,244 Delaware 9,036 1,542 22,815 2,946 3,360 3,773 District of Columbia e
10,817 5,764 28,650 9,774 10,505 11,382 Florida 242,045 125,684 598,152
180,497 198,658 216,819 Georgia 132,381 48,749 324,935 77,581 87,133 96,685
Hawaii 10,037 420 27,465 2,113 2,409 2,704 Idaho 17,818 7,496 36,726 7,634
8,267 8,900 Illinois 137,481 32,660 328,488 66,466 75,379 84,291 Indiana
63,161 53,705 88,432 108,218 117,578 126,938 Iowa 32,383 15,493 70,818
34,955 37,233 39,512 Kansas 30,321 12,771 69,927 19,336 21,206 23,077
Kentucky f 56,026 60,027 77,803 71,002 71,002 71,002 Louisiana 91,131 25,293
258,469 47,876 54,773 61,670 Maine 13,978 11,402 21,874 14,282 15,471 16,660
Maryland 56,870 92,159 73,549 122,251 129,200 136,148 Massachusetts e 48,064
44,165 53,983 46,043 46,069 48,988 Michigan 102,762 36,150 233,774 113,035
125,564 138,092 Minnesota f 31,861 8 88,504 9 9 9 Mississippi 58,036 21,086
140,627 58,518 68,175 77,832 Missouri 57,979 41,201 100,172 92,605 97,120
101,635 Montana f 13,173 4,288 31,711 5,609 5,609 5,609 Nebraska 16,576
6,744 35,714 8,381 8,841 9,302 Nevada e 30,526 8,954 78,133 10,501 11,338
12,190 New Hampshire 10,264 1,637 30,587 8,614 9,118 9,622 New Jersey 96,859
46,851 203,269 134,176 146,846 159,517 New Mexico 56,408 3,442 177,846 5,345
6,059 6,773 New York 286,822 401,010 106,350 461,065 486,001 510,938 North
Carolina 89,211 65,490 147,442 104,182 113,067 121,951 North Dakota f 5,656
1,783 13,854 2,330 2,330 2,330 Ohio 129,858 53,069 263,200 92,991 99,322
105,654 Oklahoma g 76,765 51,257 196,501 42,344 45,887 49,429

Enclosure III Enclosure III GAO- 01- 993R SCHIP Enrollment and Expenditures
12

Estimated fiscal year 2000 expenditures including costs for a

State Fiscal year

2000 allotment

Actual fiscal year 2000 expenditures

Total unspent allotments at

end of fiscal year 2000 b

Low level of additional enrollment c

Medium level of additional enrollment

High level of additional enrollment

Oregon 43,896 12,509 101,807 25,208 27,766 30,324 Pennsylvania 128,956
70,684 240,268 145,944 152,606 159,269 Rhode Island 9,571 10,350 18,218
14,207 14,558 14,910 South Carolina 71,314 46,591 82,058 49,056 50,463
51,870 South Dakota 7,951 3,109 20,338 6,822 7,397 7,972 Tennessee g 74,226
41,705 164,515 26,614 26,887 27,160 Texas 502,812 41,433 1,541,563 264,912
319,671 374,430 Utah 27,199 12,842 54,731 25,212 27,216 29,221 Vermont 3,967
1,430 9,066 3,966 4,048 4,130 Virginia 73,580 18,558 186,338 46,624 53,245
59,866 Washington 52,355 604 144,853 8,941 10,252 11,564 West Virginia f
21,146 9,692 57,477 10,758 10,758 10,758 Wisconsin f 45,592 21,394 103,204
66,174 66,174 66,174 Wyoming f 7,069 1,041 21,415 1,484 1,484 1,484

Total $4,204,313 $1,867,165 $9,742,641 $3,265,982 $3,576,974 $3,891,676

a In general, a SCHIP fiscal year allotment is available for 3 fiscal years.
Therefore, states may be expending funds from prior fiscal years as well as
fiscal year 2000. b Unspent allotments at the end of fiscal year 2000
include any funds remaining from allotments from fiscal years 1998, 1999,
and 2000. c We estimated fiscal year 2000 state expenditures to include
states? additional numbers of eligible unenrolled children by adding to the
actual June 2000 enrollment figures a number that is (1) the estimated
number of children whose families would drop private insurance coverage in
order to enroll in SCHIP and (2) 40 percent (a low- level estimate), 55
percent (medium- level), and 70 percent (high- level), respectively, of the
estimated number of eligible uninsured children; this number is reduced by
the number of children representing the actual change in enrollment from
June 1999 through June 2000. The number of eligible uninsured children was
based on the number of uninsured children meeting SCHIP income eligibility
criteria from combined 1998, 1999, and 2000 March supplements to the CPS.

d Change in enrollment from 1999 through 2000 was greater than the CPS
estimate of eligible unenrolled children at the low and medium levels of
additional enrollment. Therefore, calculations of expenditure estimates use
actual June 2000 enrollment. Additionally, Alaska?s reported expenditures in
fiscal year 2000 exceeded available allotments by $418,766. The excess
expenditure was charged to the state?s fiscal year 2001 allotments.

Enclosure III Enclosure III GAO- 01- 993R SCHIP Enrollment and Expenditures
13 e Change in enrollment from 1999 through 2000 was greater than the CPS
estimate of

eligible unenrolled children when applying the low level of additional
enrollment. Therefore, calculations for the expenditure estimate at the low
level of additional enrollment use the actual June 2000 enrollment.

f Change in enrollment from 1999 through 2000 was greater than the CPS
estimate of eligible unenrolled children at the low, medium, and high
levels, respectively, of additional enrollment. Therefore, calculations of
expenditure estimates use the actual June 2000 enrollment.

g The state began reporting enrollment in SCHIP in fiscal year 1998;
however, the state did not begin to claim expenditures for 1998 and 1999
enrollment until fiscal year 2000. Therefore, fiscal year 2000 expenditures
overstate actual expenditures incurred in the year. Expenditure estimates
were calculated taking this overstatement into account by substituting
expenditures from the same fiscal quarter in 2001 for the quarter with high
expenditures in 2000. For example, we substituted Oklahoma?s first quarter
2001 expenditures for first quarter 2000 expenditures.

Enclosure IV Enclosure IV GAO- 01- 993R SCHIP Enrollment and Expenditures 14
STATE INCOME ELIGIBILITY LEVELS FOR SCHIP AND MEDICAID

SCHIP generally covers uninsured children in families with incomes too high
to qualify for Medicaid but at or below 200 percent of the federal poverty
level ($ 35,300 for a family of four in 2001). However, both the SCHIP and
Medicaid statutes give states considerable flexibility in setting income
eligibility standards (see table 1). 22 States? SCHIP upper income
eligibility limits range from 100 percent to 350 percent of the federal
poverty level. Thirteen states have set their upper income eligibility
limits for SCHIP above 200 percent of the poverty level. 23

The population of pregnant women who could be eligible for SCHIP is limited,
in part, because of the broad eligibility this group already has in
Medicaid. Seventeen states? and the District of Columbia?s Medicaid income
eligibility levels for pregnant women as of October 2000 were at or above
the maximum income eligibility levels in their SCHIP programs. 24 Other
states had a narrow income eligibility range in SCHIP above the Medicaid
level. For example, North Dakota?s SCHIP eligibility for pregnant women
could range from 133 percent to 140 percent of the poverty level.

Table 1: SCHIP Upper Income Eligibility Limits and Medicaid Upper Income
Eligibility Limits for Pregnant Women, by State, as of October 2000

Percentage of the federal poverty level

State SCHIP upper income eligibility limit

Medicaid upper income eligibility limit for

pregnant women a

Alabama 200 133 Alaska 200 200 Arizona 200 140 Arkansas b 100 133 California
250 200 Colorado 185 133 Connecticut 300 185 Delaware 200 200 District of
Columbia 200 200 Florida 200 185 Georgia 235 235 Hawaii 200 185

22 Recognizing the variability in state Medicaid programs, the statute
allows a state to expand eligibility up to 50 percentage points above its
Medicaid eligibility standard as of 1997. Additionally, because the statute
does not define how a state counts income, a state may exclude certain types
of family income by using income disregards in order to increase eligibility
for the program.

23 The 13 states are California, Connecticut, Georgia, Minnesota, Missouri,
New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island,
Vermont, and Washington. 24 The 17 states are Alaska, Arkansas, Delaware,
Georgia, Illinois, Iowa, Maine, Maryland, Massachusetts, Nebraska, Oklahoma,
Oregon, Rhode Island, South Carolina, Tennessee, West Virginia, and Wyoming.

Enclosure IV Enclosure IV GAO- 01- 993R SCHIP Enrollment and Expenditures 15

State SCHIP upper income eligibility limit

Medicaid upper income eligibility limit for

pregnant women a

Idaho 150 133 Illinois c 185 200 Indiana 200 150 Iowa 200 200 Kansas 200 150
Kentucky 200 185 Louisiana d 150 133 Maine 200 200 Maryland e 200 200
Massachusetts 200 200 Michigan 200 185 Minnesota 280 275 Mississippi 200 185
Missouri 300 185 Montana 150 133 Nebraska 185 185 Nevada 200 133 New
Hampshire 300 185 New Jersey 350 185 New Mexico 235 185 New York f 250 185
North Carolina 200 185 North Dakota 140 133 Ohio 200 150 Oklahoma 185 185
Oregon 170 170 Pennsylvania 235 185 Rhode Island 250 250 South Carolina 150
185 South Dakota 200 133 Tennessee 100 185 Texas 200 185 Utah 200 133
Vermont 300 200 Virginia 185 133 Washington 250 185 West Virginia g 150 150
Wisconsin 200 185 Wyoming h 133 133

a Federal Medicaid law mandates that states cover pregnant women up to 133
percent of the federal poverty level.

Enclosure IV Enclosure IV GAO- 01- 993R SCHIP Enrollment and Expenditures 16
b Only children born after September 30, 1982, and before October 1, 1983,
are eligible for

Arkansas? SCHIP program. The state has received approval from HCFA for a
separate child health program for children in families with incomes from 150
percent to 200 percent of the federal poverty level, but implementation
depends on approval of an amendment to the state?s Medicaid section 1115
demonstration.

c Infants in Illinois? SCHIP program born to Medicaid- enrolled mothers are
covered to 200 percent of the poverty level; infants whose parents are not
enrolled are covered up to 185 percent of the poverty level.

d Louisiana received approval to raise SCHIP income eligibility to 200
percent of the poverty level as of June 2001. e Maryland implemented a
separate child health program extending coverage to children in families
with incomes above 200 percent but at or below 300 percent of the poverty
level effective July 1, 2001.

f New York began covering pregnant women in Medicaid up to 200 percent of
the federal poverty level as of November 1, 2000. g Effective November 1,
2000, West Virginia increased its upper income eligibility limit to 200
percent of the poverty level. h Effective September 1, 2001, Wyoming will
increase its upper income eligibility limit to 150 percent of the poverty
level.

Source: GAO analysis of CMS and state data, and Maternal and Child Health
(MCH) Update: States Have Expanded Eligibility and Increased Access to
Health Care for Pregnant Women and Children (Washington, D. C.: National
Governors Association,

Feb. 22, 2001).

Enclosure V Enclosure V GAO- 01- 993R SCHIP Enrollment and Expenditures 17
STAFF ACKNOWLEDGMENTS

Key contributors to this correspondence were Karen Doran, Ann Tynan, Catina
Bradley, Paula Bonin, and Elizabeth T. Morrison

GAO- 01- 993R SCHIP Enrollment and Expenditures 18 RELATED GAO PRODUCTS

Health Insurance: Proposals for Expanding Private and Public Coverage (GAO-
01- 481T, Mar. 15, 2001).

Medicaid and SCHIP: Comparisons of Outreach, Enrollment Practices, and
Benefits (GAO/ HEHS- 00- 86, Apr. 14, 2000).

Children?s Health Insurance Program: State Implementation Approaches Are
Evolving (GAO/ HEHS- 99- 65, May 14, 1999).

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