SCHIP and Maine


Despite Maine being the state with the smallest share of its population under age 18, the SCHIP expansion debate in Congress has received a lot of attention. Recently, Scott Moody and I wrote a brief on SCHIP and Maine highlighting some keys facts:
* Almost every Maine child (under age 18) has health coverage or is eligible for Medicaid/SCHIP.
* Of all 277,000 Maine children, only 16,900, 6.1 percent, are uninsured and only 7,300, 2.6 percent, are uninsured and not already eligible for retroactiveMedicaid/SCHIP coverage (up to 200% of poverty).
* Three-quarters of children who become uninsured will be re-insured within a year.
Even with these low, almost non-existant uninsured rates, there is still talk of expanding Maine SCHIP. Expanding Maine SCHIP to 300 percent of poverty would cost $20 million—a 60 percent increase in SCHIP spending over current levels. Additionally, evidence shows that states with SCHIP income eligibility levels at 300 percent of poverty have similar rates of uninsured children, but many more children on Medicaid/SCHIP. Put simply, SCHIP crowds-out private sector health insurance. Maine’s SCHIP/Medicaid underpayment causes a 13 percent increase in private insurance premiums – far above the 1.3 percent premium increase due to uncompensated care for uninsured kids.
In addition, we recommend some policy reforms
* Do not expand SCHIP income eligibility beyond the current 200 percent of poverty, despite any increase in federal CHIP funds.
* Allow child-only individual health insurance plans to be sold on a non-guaranteed issue basis (Right now an individual insurance child-only plan in Maine costs $700 a month compared to $46 a month in DC, as a result of our guaranteed issue and community rating laws)
* Institute monthly premiums at four percent of family income for all Medicaid/SCHIP recipients (children and parents) earning more than 150 percent of poverty.
* Simplify SCHIP income eligibility. Make $42,500 the eligibility level for all Maine families, regardless of family size (this is about 200% of poverty for a family of four). This would remove the SCHIP/Medicaid fertility bonus where the more kids you have the more you can make and qualify for medical welfare. This hurts single moms and helps married upper income families.
* Educate people about private health insurance availability, its costs, and facilitate enrollment in private plans if the families so desire, as part of any Medicaid/SCHIP outreach.
Right now, Maine spends $210 per month for every child on SCHIP (state and federal funds). Private individual insurance plans for a child in DC run about $46 a month for a $1,000 deductible plan or $77 a month for $0 deductible HMO.
SCHIP is not the solution and should not be expanded.