In brief

In the late 1990s, the federal government was concerned about the number of children who were not receiving necessary medical treatment because they were uninsured. Their parents could not afford private insurance but their incomes were too high to qualify for Medicaid. Drawing on a similar venture begun in Massachusetts, CHIP was introduced and, nearly 20 years on, over 8 million children have been enrolled.

The challenge

In 1997, more than 10 million children in the US, one in seven, had no medical insurance, including over 3 million already eligible for Medicaid. Many of these children lived in families whose incomes were too high to qualify for Medicaid but too low to afford private coverage (75 percent of uninsured children lived in families with a parent who worked full time). In addition to this, a quarter of all the uninsured in the US were children.

The initiative

“In response to the high percentage of uninsured children in the United States, the 105th Congress enacted (1997) the State Children’s Health Insurance Program (SCHIP). It was established to provide health insurance for children who fall in the gap between public and private coverage.” [1] It was enacted as part of the Balanced Budget Act of 1997.

The objectives for SCHIP (now known simply as CHIP and referred to as such below) were as follows:

  • To extend health insurance coverage to five million targeted low-income children who are ineligible for Medicaid, typically from families with income up to 200 percent of the federal poverty level.
  • To lower the ‘uninsurance rate’ among low-income American children.

It was the result of budget negotiations between President Clinton and the Republican-controlled Congress. “The [CHIP] Reauthorization Act (CHIPRA) reauthorized CHIP in April 2009 and, in 2010, the Affordable Care Act contained provisions to strengthen the program. The Affordable Care Act extended CHIP funding until September 30, 2015, and requires states to maintain eligibility standards through 2019.” [2]

The public impact

By 2005, enrolment in CHIP had increased steadily to 6.1 million children and this grew to 8.1 million in 2014. The percentage of low-income, uninsured children dropped from 22.3 percent to 14.9 percent in 2005 and 7 percent in 2012.

Compared with uninsured children, those children who were enrolled in Medicaid or CHIP had their healthcare needs dealt with more effectively. Only 2 percent had not had their needs met, compared with 11 percent of the uninsured. The parents of CHIP-insured children reported better access to care and better communication with healthcare providers.

For example, children who were uninsured and gained coverage through Medicaid or CHIP had fewer asthma-related attacks after enrolment. “Children had fewer asthma-related attacks and medical visits after CHIP (mean number of attacks: 9.5 to 3.8; mean number of asthma visits: 3.0 to 1.5; hospitalizations: 11% to 3%).” [3]

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What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Stakeholder Engagement Strong

The major stakeholders of CHIP are the federal and state governments who planned the initiative and also collectively provided necessary funds through a formula based on the Medicaid Federal Medical Assistance Percentage (FMAP) and the Centers for Medicare and Medicaid Services (CMS), which administer the programme.

The legislation to create SCHIP was sponsored by the Democrat senator, Edward Kennedy, in partnership with the Republican senator, Orrin. There was also collaboration between the public administration and external stakeholders:

  • Representatives of the medical profession, such as the American Academy of Pediatrics.
  • Advocacy groups, such as the Children's Defense Fund and Families USA
  • Private foundations, such as the Robert Wood Johnson Foundation, a Princeton-based health charity, and the Commonwealth Fund.

The Robert Wood Johnson Foundation played a major role in funding outreach and enrolment throughout the US via its ‘Covering Kids’ programme.

Political Commitment Strong

After the proposed healthcare reform of the then president, Bill Clinton, it was widely accepted that uninsured people must be covered by extending the existing programmes, with children as a priority. To that end, the Congress committed to provide sufficient funding for 10 years. In addition, this initiative also garnered broad support from Democrats and Republicans.

Congress approved funding of USD 4.27 billion for 1999-2001, USD 3.15 billion for 2001-04, and USD 4 billion in 2005.

Public Confidence Good

Bill Clinton’s job approval rating for the year 1997 – when SCHIP was introduced – was 58.1 percent, increasing to 67 percent in 1998. This provides evidence that there was confidence in the government’s institutions involved).

Policy

Clear Objectives Strong

The broad objective was to provide health insurance for children who fall into the gap between public and private coverage, and to extend the health insurance coverage of children.

The numerical, measureable target was to extend health insurance coverage to five million ‘targeted low-income’ children who were ineligible for Medicaid. Since its inception in 1997, enrolment in CHIP has increased steadily, reaching 8.1, million children in 2014.

Evidence Strong

The idea for CHIP drew inspiration from an existing programme in Massachusetts that had been passed in 1996. There was a clear local connexion in that Edward Kennedy, one of the programme’s sponsors, was the senator for Massachusetts at the time. “Kennedy was intrigued by a children's health insurance plan in Massachusetts that had passed in 1996, and met with a Boston Medical Center paediatrics director and a Massachusetts state legislator to discuss the feasibility of a national initiative. Kennedy also saw using an increase in tobacco taxes as a way to pay for the expanded coverage. Thus, in October 1996, Kennedy introduced a bill to provide health care coverage for children of the working poor, to be financed via a 75 cents a pack cigarette tax increase.” [4]

In addition to this, it was inspired by a similar health insurance programme that Medicaid had initiated in 1965. This provided healthcare services to a very broad and diverse population, while CHIP has a simpler, more targeted purpose.

Feasibility Good

When the initiative was in the planning phase, there was concern regarding states’ participation in the initiative. However, this concern was later resolved when the federal government decided to reimburse states at a higher rate for low-income children than for those on Medicaid. There was less concern regarding the cost incurred, supported by the fact that financial conditions of the states were good and tobacco funds were made available to fund CHIP.

Action

Management Good

CMS is the body responsible for administering CHIP. It is “a state-administered programme and each state sets their own guidelines regarding eligibility and services, according to federal guidelines.” [5] CHIP has been well run in that it has had good results throughout its nearly 20-year lifetime, and it was re-authorised in 2009.

Measurement Good

The evaluation of CHIP’s impact is carried out by the federal government, state governments, private foundations and think tanks, and academics. The metrics used are:

  • The number of children benefiting from health insurance coverage.
  • The impact that CHIP has on their health and wellbeing (in terms of the reduction in unmet healthcare needs).
  • The extent to which eligible children have gained access to high quality care and improved their health outcomes as a result of CHIP.

Alignment Good

In 1999, the federal government introduced a campaign to increase awareness of CHIP. States also spent capital on using statewide media campaigns to raise enrolment rates for children who were eligible for the programme. The programme was expanded by the Clinton government in 2001 and re-authorised in 2009. In 2014, Senator Jay Rockefeller introduced legislation that would extend funding for the CHIP program through fiscal year 2019.

This indicates the levels of cooperation between the federal and state governments and there has also been cooperation between the Democrats and Republicans in Congress. There was also alignment between government and the NGOs and medical bodies involved in funding and supporting CHIP.