Effects of the State Children’s Health Insurance Program on Children with Chronic Health Conditions Amy J. Davidoff, Ph.D. Genevieve Kenney, Ph.D. Lisa Dubay, Sc.M. The Urban Institute June 5, 2004 Funded by the Maternal and Child Health Bureau and the Robert Wood Johnson Foundation

SCHIP Coverage Particularly Important for Children with Chronic Conditions Children have greater needs for care, greater unmet needs Private insurance alternatives limited, costly Public coverage particularly desirable –Shifts most financial burden from family –Offers broader spectrum of services But SCHIP crowd-out provisions may inhibit enrollment

Expected Effects of SCHIP Expansions: Increased public coverage, reduced uninsured Increased access to care, use of outpatient services –Reduced ER, inpatient use? Reduced family spending on care Outreach & enrollment simplification => spillover effects on Medicaid eligible children

Evidence on Effects of SCHIP Expansions Limited Crowd-out estimates range widely - 15% to 50%, depending on methods, measurement Limited literature on access & use effects No studies examine effects on children with chronic conditions

Research Objectives Examine effects of SCHIP expansions for children with chronic health conditions on: –Public & private insurance, uninsured rates –Access, use of services, spending Estimate spillover effects on Medicaid eligible children Compare to healthy children

Analytic Approach: Difference in Difference (DD) Pre-post design with comparison group –1997 vs 2000/2001 –Treatment group = newly SCHIP eligible –Comparison = slightly higher income Control for differences in characteristics across groups using multivariate regression

Analytic Approach: DD (cont.) Estimate OLS models Outcome = a 0 + a 1 tx + a 2 postper + a 3 tx*postper + a 4 X + e Coefficient a 3 = effect of being in treatment group during post period X controls for child, family, area characteristics, states

Multivariate Controls Child characteristics –Chronic condition –Age –Gender –Race/ethnicity –Child immigrant status Family characteristics –Size –Single parent –Parent health problems –Earnings –Parent ed Predicted ESI Offer Area characteristics –Premiums –HMO penetration –Unemployment rate (+) State

Data National Health Interview Survey (NHIS), 1997, 2000 & 2001 Identifying Children with Chronic Health Conditions –Condition checklist: chronic developmental, physical & behavioral conditions –Limited in activity, caused by condition lasting >= 1 year –Reported sad or unhappy most of time, past 6 months –Very low birth weight, < 2 years 18% of children meet criteria

Identifying Treatment, Comparison Groups Algorithm replicates eligibility determination process Link federal, state rules on deeming, disregards, categorical requirements Measure monthly countable income using earnings data, relevant disregards Determine eligibility for Medicaid, SCHIP Determine categorical eligibility Compare federal & state specific income thresholds to countable income

Spillover Effects on Medicaid Poverty Expansion Group Similar Increased public coverage, reduced uninsured Similar effects on access, use Larger, significant downward shifts in out-of-pocket spending

Magnitude of Effects Depends on Reference Point Absolute effects small Relative to target group mean at baseline –30 % reduction in % uninsured –35 % reduction in any unmet need –42 % reduction in unmet dental need Relative to % newly publicly insured –88 % experienced reduction any unmet need –76 % reduced unmet dental need

Comparison with Healthy Children Suggests Bigger Effects on Children with Chronic Conditions Children with chronic conditions experienced: Less loss of private coverage, more newly insured Larger increase in specialist visits Larger decrease in mental health specialist visits Larger decrease in ER visits

Summary Effects of SCHIP Expansions Increased coverage, but 16 % of eligible remain uninsured Improved access, but problems remain –17 % with unmet dental need –10 % with unmet Rx need Positive effects more pronounced for children with chronic health conditions

Policy Implications Further progress requires targeted outreach –Specialty providers, educators Restructured provider contracts may be needed to facilitate access State caps on SCHIP enrollment => no special protections for children with chronic conditions => risk of losing ground Reduced outreach efforts => reduce positive spillover benefits to Medicaid eligible children