Don't cheap out on SCHIP

March 02, 2007

Abipartisan federal effort to encourage states to provide health coverage to children of the working poor has so far exceeded expectations that its $40 billion, 10-year budget will run out months early this year. Advocates at the federal and state levels must now take care to protect the State Children's Health Insurance Program from becoming a victim of its own success.

Maryland, for example, which has been a national leader in quickly enrolling eligible children and in competing for extra grant money that slower states have left on the table, covers more than 90,000 children 18 and younger through its version of the program, dubbed MCHP. Maryland's 10-year target had been 60,000, and by the end of this fiscal year MCHP will run nearly $5 million short.

Ensuring that children have regular access to checkups, medicine and preventive screenings is expensive. The Maryland program will cost $277 million this year in state and federal funds. But early care saves money in the long run by reducing visits to the emergency room for chronic ailments. Thus, as SCHIP is updated by Congress this year for its second decade, lawmakers will have to resist the temptation to be too stingy or too generous.

President Bush's proposal to limit federal matching funds to covering children in families earning no more than 200 percent of federal poverty guidelines - or about $40,000 annually for a family of four - would leave too many children out, including 11,000 in Maryland. Currently, states can get federal matching money for covering children in families earning up to 300 percent of the poverty guidelines.

Gov. Martin O'Malley's plan to raise Maryland's top limit to 400 percent of poverty, which is more than $80,000 annually for a family of four, is simply too high. The plan, which would fulfill the governor's goal of extending access to health care to all Maryland children, budgets $1.9 million in state and federal money to cover 1,765 additional kids.

A feature of the 1997 SCHIP law that rewards states with a higher federal match than they get for Medicaid beneficiaries - 65 percent vs. 50 percent in Maryland - is no doubt responsible for some of SCHIP's success. Maryland has also defrayed some cost by charging premiums - from about $548 to $685 annually - to families earning more than 200 percent of the poverty guidelines who seek SCHIP coverage for their children. Mr. O'Malley would require sliding-scale premium contributions from families earning up to 400 percent of poverty.

Health care is one of the fastest-rising expenses in the U.S. economy. Yet medical outcomes are often not as good as those in other Western countries, partly because of gaps in the disjointed and ineffective delivery system. As state and federal legislators work to sew up those seams, serving children in the most practical way ought to be a top priority.

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