have expanded SCHIP to children with family incomes up to 300 percent of FPL (Rosenbaum and Smith, 2001).

SCHIP operates as a block grant program to the states. States have the option of creating SCHIP programs as Medicaid expansions, as separate programs, or as combined programs (i.e., Medicaid expansions for some income levels and separate programs for higher income levels).

The SCHIP program has been implemented slowly and variably across states. Most states rely on managed care arrangements as their primary mechanism of service delivery for both healthy children and those with special health care needs.


VHA was established in 1946 as a separate division within the Veterans Administration to meet the health care needs of U.S. veterans (Veterans Administration, 2001b).4 Veterans make up 10 percent of the nation’s population, but only a minority receive care through VHA (Kizer, 1999; Van Diepen, 2001a). Eligibility is triaged according to the available budget; those with compensable, service-connected disabilities are assigned the highest priority (Veterans Administration, 2001a). VHA serves as a payer of last resort for treatment not related to service-connected disabilities that is provided through VHA facilities.

Health care is delivered through 22 regional health care systems, referred to as Veterans Integrated Service Networks (VISNs). Each VISN contains 7 to 10 hospitals, 25 to 30 ambulatory care clinics, 4 to 7 nursing homes, and other care delivery units (Kizer, 1999). Most clinical and administrative staff are employees of VHA.

Generally, the VHA population is older, low-income, and characterized by high rates of chronic illness (see Table 2-1). Approximately 19 percent of the total VHA population sought inpatient and outpatient mental health services (including those related to substance abuse) in 2000 (Van Diepen, 2001a).


DOD TRICARE encompasses two health care programs operated by the Department of Defense. TRICARE provides services to active-duty military personnel, their dependents, retirees under the age of 65 and their


The VHA was initially established as the Department of Medicine and Surgery; it was succeeded in 1989 by the Veterans Health Services and Research Administration, and renamed the Veterans Health Administration in 1991.


Unless otherwise indicated, data in this section are based on TRICARE, 2002.

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