that are above the income threshold for Medicaid eligibility, states may consider approaching the insurance problem through the provision of subsidies to families or employers, the use of tax credits, or other strategies.
Based on the Medicaid experience with underenrollment, new state-sponsored and private SCHIP programs will have similar problems unless they can improve their outreach, enrollment, and eligibility determination procedures. States also must provide adequate reimbursement rates to maintain and improve provider participation, and quality standards must be enforced for all providers.
Even before Congress enacted the State Children's Health Insurance Program (SCHIP), there were only six states without some type of public or private insurance subsidy program for children. In the past decade, states have taken a variety of steps to extend health insurance coverage to low-income children. Some have expanded Medicaid eligibility, some have developed state-sponsored programs which subsidize private coverage, and some have supported privately sponsored programs developed by insurers and health plans.
Income and age requirements for Medicaid eligibility, cost per child, the level of cost-sharing, the sources of financing, and Medicaid enrollment strategies vary widely. Most of the state program benefits are provided through contracts with managed care plans and are similar to the benefits offered to most privately insured individuals enrolled in managed care plans.
Although most of these programs have not been evaluated systematically, they have reduced the numbers of uninsured children in the United States. The variety of programs suggests that the problem of uninsured children can be approached in many ways. Comparisons of the different approaches could yield helpful information about what strategies and innovations are most effective for outreach and enrollment, cost-sharing, and other components of the programs.
Most children—approximately 70 percent, or about 50 million—are generally healthy. To help them stay healthy, these children need immunizations, regular preventive care, and professional treatment for acute illnesses and injuries.
Twenty percent of American children—about 14 million children—have such chronic problems as persistent ear infections, respiratory allergies, asthma, eczema, and skin allergies. These conditions may impose significant limitations on the children's ability to function effectively in school and at home. Children with chronic conditions require more frequent visits to primary care physicians, are more likely to visit emergency rooms, are more likely to need care from specialists, have greater needs for medications, and may also need hospitalizations during acute episodes. Their medical expenses, on average, are two to three times higher than those for the average healthy child.
The remaining 10 percent, about 7 million children, have one or more such severe chronic conditions as congenital heart defects, neural tube defects, juvenile diabetes mellitus, sickle cell disease, or human immunodeficiency virus (HIV) infection. This group accounts for 70 to 80 percent of all medical expenditures for children. Some of these children require extensive health care services (e.g., surgical procedures) requiring large expenditures primarily early in life. Others with severe medical conditions may require lifelong, intensive case management from primary care practitioners along with consultations from pediatric subspecialists, as well as services from allied health professionals to maintain or to improve their functioning.
Children with special needs typically also have additional, nonmedical needs. These include supplemental or adjunctive therapies; specialized transportation, supplies, and equipment; linkages with