GAO-01-993R SCHIP Enrollment and Expenditures

United States General Accounting Office

Washington, DC 20548

July 25, 2001

The Honorable Christopher S. Bond

Ranking Minority Member

Committee on Small Business

United States Senate

Subject: Children’s Health Insurance: SCHIP Enrollment and Expenditure

Information

Dear Senator Bond:

The Congress created the State Children’s Health Insurance Program (SCHIP) in

1997 to reduce the number of low-income uninsured children in families with

incomes that are too high to qualify for Medicaid, the federal-state program that

provides health care coverage to certain categories of low-income adults and

children.1

 The Congress appropriated $40 billion over 10 years (fiscal years 1998

through 2007) for SCHIP and, on the basis of a formula accounting for the number

of a state’s low-income children, allocates funds annually to the 50 states, the

District of Columbia, and the U.S. commonwealths and territories. Each state’s

SCHIP allotment is available as a federal match based on state expenditures.2

Although the SCHIP statute generally targets children in families with incomes up

to 200 percent of the federal poverty level, 13 states’ programs cover children in

families above 200 percent of the federal poverty level.3

Expanding the SCHIP-eligible population beyond children to include adults is an

issue of ongoing interest. Some analysts have suggested that providing health

 1

Established as title XXI of the Social Security Act by Public Law 105-33, SCHIP is set out at 42

U.S.C. § 1397aa et seq.

2

SCHIP and Medicaid both are financed jointly by the states and the federal government under a

formula in which a state’s share of program expenditures is based on its per capita income in

relation to the national average. The federal share of expenditures for Medicaid can range from 50

to 83 percent, with the national average federal matching rate at about 57 percent. SCHIP offers

an “enhanced” federal matching rate derived from the states’ Medicaid rate, with a national

average federal share of about 70 percent. Each state’s SCHIP match is equal to 70 percent of its

Medicaid matching rate plus 30 percentage points, not to exceed a federal share of 85 percent.

3

Two hundred percent of the federal poverty level translated to $35,300 for a family of four in 2001.

The statute allows a state to expand eligibility to 200 percent of the poverty level or up to 50

percentage points above its Medicaid eligibility standard as of March 31, 1997. See 42 U.S.C.

§ 1397jj(b)(1)(B)(ii)(I).
2 GAO-01-993R SCHIP Enrollment and Expenditures

insurance to parents may lead to increased insurance coverage among children.4

Medicaid set a precedent for a public program to provide health care coverage for

pregnant women. Since the late 1980s, Medicaid has covered eligible pregnant

women with the goal of reducing infant deaths and poor birth outcomes

(currently, Medicaid requires states to cover pregnant women with incomes up to

133 percent of the federal poverty level). Although the SCHIP statute allows a

state to enroll the parents of eligible children if the state can demonstrate it is

cost-effective to do so, the cost-effectiveness test is difficult to pass.5 Recent

legislative proposals would broaden states’ ability to spend federal SCHIP funds

to insure the parents of children in public health programs and pregnant women

who meet SCHIP income-eligibility criteria.

In response to your concern about ensuring that SCHIP funding is adequate to

cover eligible children before considering expansion to others, we are providing

information on (1) enrollment and federal expenditures for SCHIP and estimates

of the number of and costs to enroll eligible unenrolled children and incomeeligible pregnant women and (2) factors that may influence states’ future

expenditures for SCHIP and the availability of funding for any program expansion.

To do our work, we analyzed the March supplements of the 1998 through 2000

Current Population Surveys for data on insurance coverage; interviewed officials

from the Centers for Medicare and Medicaid Services (CMS),6 which has oversight

responsibility for both SCHIP and Medicaid, and the Health Resources and

Services Administration (HRSA), which shares oversight responsibilities for

SCHIP with CMS; reviewed the most current, available SCHIP enrollment and

expenditure data through 2000;7 interviewed private researchers with knowledge

of state programs and SCHIP projections; and reviewed the SCHIP statute. We

relied on prior and ongoing work and relevant published literature to identify

 4

Leighton Ku and Matthew Broaddus, The Importance of Family-Based Insurance Expansions:

New Research Findings About State Health Reforms (Washington, D.C.: Center on Budget and

Policy Priorities, Sept. 5, 2000), p. 14.

5

Cost-effectiveness is achieved when the cost of covering both the adults and children in a family

does not exceed the cost of covering only the eligible children. See Children’s Health Insurance

Program: State Implementation Approaches Are Evolving (GAO/HEHS-99-65, May 14, 1999), pp. 61-

67.

6

On June 14, 2001, the Secretary of Health and Human Services announced that the name of the

Health Care Financing Administration (HCFA) had been changed to the Centers for Medicare and

Medicaid Services. In this report, we will continue to refer to HCFA where our findings apply to

the organizational structure and operations associated with that name.

7

The most current “point-in-time” data for SCHIP enrollment we identified are from a survey of all

50 states and the District of Columbia that allows for comparison of state enrollment from June

1999 through June 2000, conducted by Vernon K. Smith, Ph.D., CHIP Program Enrollment: June

2000 (Washington, D.C.: The Kaiser Commission on Medicaid and the Uninsured, Jan. 2001), p. 2.

In its SCHIP enrollment reports, HCFA provided the number of children ever enrolled during a

calendar quarter or federal fiscal year. Because of ongoing enrollment attrition, the number of

children who are ever enrolled in a quarter or a year will be larger than the number enrolled at any

point in time during that period.
3 GAO-01-993R SCHIP Enrollment and Expenditures

factors that influence states’ SCHIP enrollment and expenditures. (For detail on

our methodology for determining enrollment and expenditures, see enc. I.) We

did our work from April through July 2001 in accordance with generally accepted

government auditing standards.

The following summarizes information on actual and estimated SCHIP enrollment

and expenditures:

• About 2.3 million children were enrolled in SCHIP as of June 2000, the most

current date for which a specific monthly enrollment figure was available. We

estimated that another 2.8 million children may have been eligible but not

enrolled at that time.

• Of the cumulative $12.6 billion in available federal allotments to states for

fiscal years 1998 through 2000, the states spent about $2.9 billion (23 percent)

by the end of fiscal year 2000, leaving approximately $9.7 billion (77 percent)

unspent and available for future years (see enc. II).8

• Fiscal year 2000 expenditures were about $1.9 billion. We estimated that fiscal

year 2000 SCHIP expenditures would have been between $3.3 billion and $3.9

billion, depending on the success with which states might have enrolled

additional eligible children who were not enrolled as of June 2000 (see enc.

III).9 While these amounts are significantly greater than the actual $1.9 billion

the states spent during that year, they are within the total SCHIP appropriation

of $4.2 billion for 2000.

• Providing coverage to an estimated 41,000 pregnant women whose incomes

met states’ eligibility levels for SCHIP in fiscal year 2000 would have cost an

estimated $247 million to $288 million if all those eligible were enrolled.

States’ future SCHIP expenditures for both children and income-eligible pregnant

women will be influenced by a variety of economic and demographic factors and

state policy choices, such as the following:

• Any increase in the cost of health care services will affect the amount of

SCHIP expenditures if SCHIP beneficiaries continue to use these services to

the same or a greater degree. The CMS Office of the Actuary projects that

 8

The SCHIP statute made a state’s yearly allotment available for 3 years. Thus, the fiscal year 1998

allocation was made available from October 1, 1997, through September 30, 2000. The Medicare,

Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA), enacted December

21, 2000, amended statutory provisions for redistributing funds from states with unspent

allotments to states that had spent all of their annual SCHIP allotments for those years. The

change allows states that did not spend all of their annual allotments to keep any unused funds not

needed to cover the expenditures of the states that spent in excess of their allotments for 1998 and

1999. The 1998 and 1999 redistributions are available to states through 2002.

9

Not all children who are eligible for a public program will enroll. Researchers have found that

public program “take-up rates” range from 40 percent to 70 percent. Therefore, we developed

scenarios based on this range of expected enrollment of children who were eligible but uninsured.

See Sherry A. Glied, Challenges and Options for Increasing the Number of Americans With Health

Insurance (New York, N.Y.: The Commonwealth Fund, Dec. 2000), pp. 7-9.
4 GAO-01-993R SCHIP Enrollment and Expenditures

health care inflation will increase and be between 3.6 percent and 4.2 percent

from 2001 through 2007, or an average of 4.1 percent per year.

• Any changes in the number of SCHIP-eligible children also would influence

expenditures if these children were enrolled. The Bureau of the Census

estimates that the number of children through age 19 will increase an average

of 0.37 percent per year from 2001 through 2007, or a total of about 2.2 percent

through the remaining years of the program’s authorization. Changes in the

economy may also affect the number of families with incomes that fall within

SCHIP eligibility limits.

• Trends in the private insurance market are less certain and may increase or

decrease the availability of employer-sponsored or privately purchased health

insurance for persons at lower incomes.

• Slowdowns in economic growth may affect states’ efforts to address the

demand for public financing of health services. Some states may respond by

increasing health care spending to reduce the numbers of uninsured children,

while others may curtail their health care spending as a result of increased

pressure on state budgets.

• States may choose to expand eligibility for children in the SCHIP program.

For example, as of July 1, 2001, Maryland expanded its SCHIP coverage of

children in families with incomes from 200 percent to 300 percent of the

federal poverty level. (See enc. IV for states’ current eligibility levels.)

• Additional states may seek authority to enroll adults in SCHIP. HCFA has

approved section 1115 demonstration waivers for four states (Minnesota, New

Jersey, Rhode Island, and Wisconsin) to enroll parents of children eligible for

public health insurance programs, within state-defined income levels, without

a cost-effectiveness test. As of July 20, 2001, California had a waiver request

pending.10 Massachusetts’ and Wisconsin’s original SCHIP plans authorized

the states to provide family coverage when it proves cost effective.

• Because unused SCHIP funds can be redistributed among states, one state’s

choice to incur additional expenditures for eligible children or adults would

affect the amount of available unused funds that another state could use for

children.

We did not seek agency comments on this correspondence because it does not

focus on agency activities. However, we briefed responsible officials within CMS

and HRSA on our findings and incorporated their technical suggestions where

appropriate.

- - - - -

 10Section 1115 of the Social Security Act allows the Secretary of Health and Human Services to

waive many statutory SCHIP requirements, thus enabling states to conduct demonstration projects

that may provide additional opportunities to develop innovative methods for expanding children’s

coverage, promoting participation in SCHIP and Medicaid, and improving the scope and quality of

the services available to children.
5 GAO-01-993R SCHIP Enrollment and Expenditures

As arranged with your office, unless you release its contents earlier, we plan no

further distribution of this correspondence until 30 days after its issuance date.

At that time, we will send copies to the Secretary of Health and Human Services,

the Administrators of CMS and HRSA, and other interested parties. This

correspondence also will be available on GAO’s home page at http://www.gao.gov.

If you or your staff have any questions regarding this correspondence, please

contact me at (202) 512-7118 or Carolyn Yocom at (202) 512-4931. Staff

acknowledgments are listed in enclosure V.

Sincerely yours,

Kathryn G. Allen

Director, Health Care—Medicaid

 and Private Health Insurance Issues

Enclosures - 5
Enclosure I Enclosure I

6 GAO-01-993R SCHIP Enrollment and Expenditures

METHODOLOGY FOR DEVELOPING SCHIP ENROLLMENT

AND EXPENDITURE INFORMATION

This enclosure describes our methods to develop information on (1) SCHIP enrollment

and expenditures, (2) an estimate of the number of children eligible for but not enrolled

in SCHIP, and (3) estimated federal expenditures if states enrolled both a greater number

of eligible children and income-eligible pregnant women.

SCHIP ENROLLMENT

AND EXPENDITURES

To identify SCHIP enrollment in 2000, ]we reviewed the most current data available

representing specific “point-in-time” enrollment for all 50 states and the District of

Columbia published by the Kaiser Commission on Medicaid and the Uninsured.11

Monthly point-in-time data are different from another commonly reported measure of

enrollment—the number of children “ever enrolled” during a calendar quarter or federal

fiscal year—which is often reflected in enrollment reports from CMS. We used point-intime enrollment because it is comparable to our estimate of unenrolled eligible children

that is calculated from the Current Population Survey (CPS).12 To determine

expenditures of SCHIP federal allotments from federal fiscal years 1998 through 2000, we

used state-reported information from HCFA’s on-line expenditure data system, the

Medicaid and State Children’s Health Insurance Program Budget and Expenditure

System.

ESTIMATED CHILDREN

ELIGIBLE BUT NOT ENROLLED,

AND THOSE LIKELY TO ENROLL

In order to estimate the number of children eligible for but not enrolled in SCHIP, and

the number likely to enroll, we used the Bureau of the Census’ March supplements of the

CPS for information on children’s insurance status, income, and demographic

characteristics such as age.13 Because CPS counts are based on samples, we combined 3

 11See Vernon K. Smith, Ph.D., CHIP Program Enrollment: June 2000 (Washington, D.C.: The Kaiser

Commission on Medicaid and the Uninsured, Jan. 2001). The unit of eligibility for SCHIP in most cases is a

calendar month, and some children gain and lose eligibility from month to month. Therefore, the number

of children who are ever enrolled in a quarter or year will be larger than the number enrolled in a specific

month during that period.

12The CPS questions on health insurance refer to the previous year. However, some analysts consider that

the CPS reflects the health insurance status of individuals in the survey during a point in time, for example,

a typical month, rather than at any time during the previous year. See, for example, Paul Fronstin,

Counting the Uninsured: A Comparison of National Surveys (Washington, D.C.: Employee Benefit

Research Institute, Sept. 2000), pp. 4-5.

13The CPS is based on a sample designed to represent a cross-section of the nation’s civilian

noninstitutional population. For each of the March surveys, about 60,000 households were sampled, and

about 47,000 of them, containing approximately 94,000 persons 15 years of age or older, were interviewed.

The CPS can be used to calculate state-specific estimates of the uninsured; however, estimates for some

states may be less accurate, particularly those for smaller states, which have small sample sizes.
Enclosure I Enclosure I

7 GAO-01-993R SCHIP Enrollment and Expenditures

years of CPS data, from 1998 through 2000, to improve the reliability of the estimates.

These surveys represented children’s insurance status from 1997 through 1999. If a child

was reported to have had insurance at any time during the year, we considered that child

to be insured.

Additionally, we made adjustments to the CPS data to reflect state-specific Medicaid and

SCHIP income exclusions, the likelihood of some substitution of public for private

insurance, and the expected enrollment of fewer than all eligible children. The SCHIP

statute requires states first to determine a child is ineligible for Medicaid in order to

consider the child for SCHIP. In their determination of income eligibility for both

programs, states may exclude certain family income, referred to as income disregards, in

order to increase eligibility for both programs.14 Income disregards typically include

some portion of family income such as Supplemental Security Income (SSI), a portion of

earnings, or child care expenses. In order to identify uninsured children with family

incomes meeting SCHIP standards, for each state we adjusted income using Medicaid

and SCHIP income disregards.15 Because the CPS does not identify child care expenses,

we assumed disregards at the level of state-specific maximums for all children in a family

through age 12. If a state did not set a maximum child care disregard, we used a national

average annual child care payment of $3,432 for each child through age 12 in a family.16

Since we assumed child care disregards for all children through age 12, this may have the

effect of overstating the number of families that actually pay for child care and

increasing the number of children qualifying for either Medicaid or SCHIP.

Additionally, our estimate addressed the likelihood that some families may drop their

existing private coverage in order to enroll children in SCHIP—a phenomenon known as

“crowd out.” To adjust for crowd out, we added to the estimate of uninsured SCHIPeligible children a number equal to 20 percent of the number of children whose family

incomes met the SCHIP eligibility requirements but were reported as being insured.17

 

14The SCHIP statute contains a provision that, in order for a child to be eligible for SCHIP-funded coverage,

the child’s family income must exceed the Medicaid income level that was in effect on March 31, 1997.

15We used Medicaid and SCHIP income disregards as of October 1998, as reported by Leighton Ku, Frank

Ullman, and Ruth Almeida, What Counts? Determining Medicaid and CHIP Eligibility for Children

(Washington, D.C.: The Urban Institute, 1999). All but four states used Medicaid disregards. States with

SCHIP income disregards included Alabama, California, Colorado, Massachusetts, Michigan, North

Carolina, Vermont, and Virginia.

16See Linda Giannarelli and James Barsimantov, Child Care Expenses of America’s Families (Washington,

D.C.: The Urban Institute, Dec. 2000), pp. 3-4.

17The Congressional Budget Office (CBO) estimates that 20 percent of those who would have otherwise

had insurance will participate in SCHIP.
Enclosure I Enclosure I

8 GAO-01-993R SCHIP Enrollment and Expenditures

Finally, because not all eligible uninsured children are eventually enrolled in public

programs, we developed three scenarios for states’ enrollment of a greater number of

eligible children by using “take-up rates” of 40 percent (low-level additional enrollment),

55 percent (medium-level), and 70 percent (high-level) of our estimate.18 Therefore, we

estimated states’ additional enrollment of eligible children in 2000 by adding to the actual

June 2000 enrollment figures a number that is (1) the estimated number of children

whose families would drop private insurance coverage in order to enroll in SCHIP and

(2) 40 percent, 55 percent, and 70 percent, respectively, of the estimated number of

eligible uninsured children; this number is reduced by the number of children

representing the actual change in SCHIP enrollment from June 1999 through June 2000.19

ESTIMATED FEDERAL

EXPENDITURES FOR ENROLLMENT

OF ADDITIONAL CHILDREN AND

PREGNANT WOMEN

To estimate expenditures in fiscal year 2000 for states to enroll both a greater number of

eligible children and income-eligible pregnant women, we developed a state-specific

fiscal year 2000 cost estimate for SCHIP children and a national estimate of the number

of income-eligible pregnant women and the costs to insure them. We estimated federal

expenditures for enrollment of additional children by multiplying our per-child cost

estimates by each of the three enrollment scenarios.

For each state, we developed a cost per child by dividing the state’s fiscal year 2000

federal expenditures by its full-year-equivalent enrollment. We approximated full-yearequivalent enrollment by using states’ reports of the total number of months of children’s

enrollment (called “member months”) and dividing that number by 12.20 For example,

one child may be enrolled in the program for 6 months, while another remains enrolled

for 9 months. Together, the number of children’s member months is 15. Calculating the

full-year-equivalent enrollment provides a more specific estimate of the average annual

cost per child.

 18Research findings indicate that public program take-up rates range from 40 percent to 70 percent.

Additionally, in December 1997 CBO estimated that about 55 percent of children who were uninsured and

eligible for SCHIP would enroll (corresponding to our medium-level scenario).

19Nine states (Alaska, Kentucky, Minnesota, Montana, Nevada, North Dakota, West Virginia, Wisconsin, and

Wyoming) and the District of Columbia enrolled more children from 1999 through 2000 than the CPS

estimated were available to be enrolled in some or all of our scenarios (using 40, 55, or 70 percent of the

estimated number of eligible uninsured children). Therefore, we used the actual June 2000 enrollment

figure for the scenarios in which there were no calculated additional children to enroll in a state.

20For the states that did not report member months for 1 of the 4 quarters in fiscal year 2000, we imputed

the missing quarter by assuming the missing quarter member months would be in the same ratio to

expenditures as that of the prior quarter’s member months to that quarter’s expenditures. Because reports

from Alabama and Alaska did not provide enough data to make full-year-equivalent calculations, we used

the number of children ever enrolled in fiscal year 2000 from HCFA’s on-line Statistical Enrollment Data

System (SEDS) for these states.
Enclosure I Enclosure I

9 GAO-01-993R SCHIP Enrollment and Expenditures

We estimated the number of pregnant women whose family incomes were within the

SCHIP income eligibility range by using the number of eligible infants as a proxy. To the

number of infants enrolled in SCHIP in fiscal year 2000 we added the CPS estimate of

uninsured infants who were eligible but not enrolled, reduced by the change in

enrollment of infants from 1999 through 2000.21 This calculation yielded an estimate of

41,107 pregnant women who met SCHIP income eligibility criteria in 2000. We used a

cost estimate for maternity coverage of between $6,000 and $7,000 per pregnant woman

provided by the National Perinatal Information Center. Our estimate of the number of

eligible pregnant women and the cost to insure them may be overstated because (1)

teenage pregnant women may already be eligible for SCHIP as children and (2) we

assume 100 percent enrollment rather than a low-, medium-, high-enrollment scenario.

 21A monthly point-in-time enrollment figure for infants was not available for 1999 or 2000. Therefore, we

used state-reported fourth quarter enrollment for 1999 and 2000 from the SEDS system.
Enclosure II Enclosure II

10 GAO-01-993R SCHIP Enrollment and Expenditures

SCHIP APPROPRIATIONS AND EXPENDITURES

Fiscal year

Annual

appropriation

Cumulative

annual

appropriation

Annual federal

expenditures

Cumulative

annual federal

expenditures

1998 $4,224,262,500 $4,224,262,500 $121,232,954 $121,232,954

1999 4,204,312,500 8,428,575,000 901,848,306 1,023,081,260

2000 4,204,312,500 12,632,887,500 1,867,165,308 2,890,246,568

2001 4,204,312,500 16,837,200,000

2002 3,082,125,000 19,919,325,000

2003 3,142,125,000 23,061,450,000

2004 3,142,125,000 26,203,575,000

2005 4,039,875,000 30,243,450,000

2006 4,039,875,000 34,283,325,000

2007 4,987,500,000 39,270,825,000

Note: The cumulative annual appropriation through 2007 to the states and the District of

Columbia totals less than the total statutory appropriation of $40 billion because of two

allocations. First, each year 0.25 percent of the total SCHIP appropriation is allocated to

the U.S. territories and commonwealths. Second, two diabetes research programs

receive $60 million a year through 2002 ($300 million in total) from the appropriation.

Source: GAO analysis of HCFA data.
Enclosure III Enclosure III

11 GAO-01-993R SCHIP Enrollment and Expenditures

SCHIP EXPENDITURES FOR FISCAL YEAR 2000:

ACTUAL EXPENDITURES AND ESTIMATED EXPENDITURES FOR ADDITIONAL

ELIGIBLE UNENROLLED CHILDREN

Dollars in thousands

Estimated fiscal year 2000

expenditures including costs for a

State

Fiscal year

2000

allotment

Actual fiscal

year 2000

expenditures

Total

unspent

allotments at

end of fiscal

year 2000b

Low level of

additional

enrollmentc

Medium

level of

additional

enrollment

High level of

additional

enrollment

Alabama $77,012 $31,948 $191,246 $59,081 $64,685 $70,289

Alaskad 7,730 18,089 -419 18,086 18,086 18,740

Arizona 130,213 29,406 325,015 67,006 79,925 92,845

Arkansas 53,754 1,523 147,141 13,114 14,770 16,426

California 765,548 187,279 2,213,789 387,612 443,106 498,599

Colorado 46,890 13,918 106,331 21,639 23,804 25,969

Connecticut 39,225 12,761 83,916 52,843 56,543 60,244

Delaware 9,036 1,542 22,815 2,946 3,360 3,773

District of

Columbiae 10,817 5,764 28,650 9,774 10,505 11,382

Florida 242,045 125,684 598,152 180,497 198,658 216,819

Georgia 132,381 48,749 324,935 77,581 87,133 96,685

Hawaii 10,037 420 27,465 2,113 2,409 2,704

Idaho 17,818 7,496 36,726 7,634 8,267 8,900

Illinois 137,481 32,660 328,488 66,466 75,379 84,291

Indiana 63,161 53,705 88,432 108,218 117,578 126,938

Iowa 32,383 15,493 70,818 34,955 37,233 39,512

Kansas 30,321 12,771 69,927 19,336 21,206 23,077

Kentuckyf 56,026 60,027 77,803 71,002 71,002 71,002

Louisiana 91,131 25,293 258,469 47,876 54,773 61,670

Maine 13,978 11,402 21,874 14,282 15,471 16,660

Maryland 56,870 92,159 73,549 122,251 129,200 136,148

Massachusettse 48,064 44,165 53,983 46,043 46,069 48,988

Michigan 102,762 36,150 233,774 113,035 125,564 138,092

Minnesotaf 31,861 8 88,504 9 9 9

Mississippi 58,036 21,086 140,627 58,518 68,175 77,832

Missouri 57,979 41,201 100,172 92,605 97,120 101,635

Montanaf 13,173 4,288 31,711 5,609 5,609 5,609

Nebraska 16,576 6,744 35,714 8,381 8,841 9,302

Nevadae 30,526 8,954 78,133 10,501 11,338 12,190

New Hampshire 10,264 1,637 30,587 8,614 9,118 9,622

New Jersey 96,859 46,851 203,269 134,176 146,846 159,517

New Mexico 56,408 3,442 177,846 5,345 6,059 6,773

New York 286,822 401,010 106,350 461,065 486,001 510,938

North Carolina 89,211 65,490 147,442 104,182 113,067 121,951

North Dakotaf 5,656 1,783 13,854 2,330 2,330 2,330

Ohio 129,858 53,069 263,200 92,991 99,322 105,654

Oklahomag 76,765 51,257 196,501 42,344 45,887 49,429
Enclosure III Enclosure III

12 GAO-01-993R SCHIP Enrollment and Expenditures

Estimated fiscal year 2000

expenditures including costs for a

State

Fiscal year

2000

allotment

Actual fiscal

year 2000

expenditures

Total

unspent

allotments at

end of fiscal

year 2000b

Low level of

additional

enrollmentc

Medium

level of

additional

enrollment

High level of

additional

enrollment

Oregon 43,896 12,509 101,807 25,208 27,766 30,324

Pennsylvania 128,956 70,684 240,268 145,944 152,606 159,269

Rhode Island 9,571 10,350 18,218 14,207 14,558 14,910

South Carolina 71,314 46,591 82,058 49,056 50,463 51,870

South Dakota 7,951 3,109 20,338 6,822 7,397 7,972

Tennesseeg 74,226 41,705 164,515 26,614 26,887 27,160

Texas 502,812 41,433 1,541,563 264,912 319,671 374,430

Utah 27,199 12,842 54,731 25,212 27,216 29,221

Vermont 3,967 1,430 9,066 3,966 4,048 4,130

Virginia 73,580 18,558 186,338 46,624 53,245 59,866

Washington 52,355 604 144,853 8,941 10,252 11,564

West Virginiaf 21,146 9,692 57,477 10,758 10,758 10,758

Wisconsinf 45,592 21,394 103,204 66,174 66,174 66,174

Wyomingf 7,069 1,041 21,415 1,484 1,484 1,484

Total $4,204,313 $1,867,165 $9,742,641 $3,265,982 $3,576,974 $3,891,676

a

In general, a SCHIP fiscal year allotment is available for 3 fiscal years. Therefore, states

may be expending funds from prior fiscal years as well as fiscal year 2000.

b

Unspent allotments at the end of fiscal year 2000 include any funds remaining from

allotments from fiscal years 1998, 1999, and 2000.

c

We estimated fiscal year 2000 state expenditures to include states’ additional numbers of

eligible unenrolled children by adding to the actual June 2000 enrollment figures a

number that is (1) the estimated number of children whose families would drop private

insurance coverage in order to enroll in SCHIP and (2) 40 percent (a low-level estimate),

55 percent (medium-level), and 70 percent (high-level), respectively, of the estimated

number of eligible uninsured children; this number is reduced by the number of children

representing the actual change in enrollment from June 1999 through June 2000. The

number of eligible uninsured children was based on the number of uninsured children

meeting SCHIP income eligibility criteria from combined 1998, 1999, and 2000 March

supplements to the CPS.

d

Change in enrollment from 1999 through 2000 was greater than the CPS estimate of

eligible unenrolled children at the low and medium levels of additional enrollment.

Therefore, calculations of expenditure estimates use actual June 2000 enrollment.

Additionally, Alaska’s reported expenditures in fiscal year 2000 exceeded available

allotments by $418,766. The excess expenditure was charged to the state’s fiscal year

2001 allotments.
Enclosure III Enclosure III

13 GAO-01-993R SCHIP Enrollment and Expenditures

e

Change in enrollment from 1999 through 2000 was greater than the CPS estimate of

eligible unenrolled children when applying the low level of additional enrollment.

Therefore, calculations for the expenditure estimate at the low level of additional

enrollment use the actual June 2000 enrollment.

f

Change in enrollment from 1999 through 2000 was greater than the CPS estimate of

eligible unenrolled children at the low, medium, and high levels, respectively, of

additional enrollment. Therefore, calculations of expenditure estimates use the actual

June 2000 enrollment.

g

The state began reporting enrollment in SCHIP in fiscal year 1998; however, the state did

not begin to claim expenditures for 1998 and 1999 enrollment until fiscal year 2000.

Therefore, fiscal year 2000 expenditures overstate actual expenditures incurred in the

year. Expenditure estimates were calculated taking this overstatement into account by

substituting expenditures from the same fiscal quarter in 2001 for the quarter with high

expenditures in 2000. For example, we substituted Oklahoma’s first quarter 2001

expenditures for first quarter 2000 expenditures.
Enclosure IV Enclosure IV

14 GAO-01-993R SCHIP Enrollment and Expenditures

STATE INCOME ELIGIBILITY LEVELS FOR SCHIP AND MEDICAID

SCHIP generally covers uninsured children in families with incomes too high to qualify

for Medicaid but at or below 200 percent of the federal poverty level ($35,300 for a family

of four in 2001). However, both the SCHIP and Medicaid statutes give states

considerable flexibility in setting income eligibility standards (see table 1).22 States’

SCHIP upper income eligibility limits range from 100 percent to 350 percent of the

federal poverty level. Thirteen states have set their upper income eligibility limits for

SCHIP above 200 percent of the poverty level.23

The population of pregnant women who could be eligible for SCHIP is limited, in part,

because of the broad eligibility this group already has in Medicaid. Seventeen states’ and

the District of Columbia’s Medicaid income eligibility levels for pregnant women as of

October 2000 were at or above the maximum income eligibility levels in their SCHIP

programs.24 Other states had a narrow income eligibility range in SCHIP above the

Medicaid level. For example, North Dakota’s SCHIP eligibility for pregnant women

could range from 133 percent to 140 percent of the poverty level.

Table 1: SCHIP Upper Income Eligibility Limits and Medicaid Upper Income Eligibility

Limits for Pregnant Women, by State, as of October 2000

Percentage of the federal poverty level

State

SCHIP upper income

eligibility limit

Medicaid upper income

eligibility limit for

pregnant womena

Alabama 200 133

Alaska 200 200

Arizona 200 140

Arkansasb100 133

California 250 200

Colorado 185 133

Connecticut 300 185

Delaware 200 200

District of Columbia 200 200

Florida 200 185

Georgia 235 235

Hawaii 200 185

 22Recognizing the variability in state Medicaid programs, the statute allows a state to expand eligibility up

to 50 percentage points above its Medicaid eligibility standard as of 1997. Additionally, because the statute

does not define how a state counts income, a state may exclude certain types of family income by using

income disregards in order to increase eligibility for the program.

23The 13 states are California, Connecticut, Georgia, Minnesota, Missouri, New Hampshire, New Jersey,

New Mexico, New York, Pennsylvania, Rhode Island, Vermont, and Washington.

24The 17 states are Alaska, Arkansas, Delaware, Georgia, Illinois, Iowa, Maine, Maryland, Massachusetts,

Nebraska, Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, West Virginia, and Wyoming.
Enclosure IV Enclosure IV

15 GAO-01-993R SCHIP Enrollment and Expenditures

State

SCHIP upper income

eligibility limit

Medicaid upper income

eligibility limit for

pregnant womena

Idaho 150 133

Illinoisc 185 200

Indiana 200 150

Iowa 200 200

Kansas 200 150

Kentucky 200 185

Louisianad 150 133

Maine 200 200

Marylande 200 200

Massachusetts 200 200

Michigan 200 185

Minnesota 280 275

Mississippi 200 185

Missouri 300 185

Montana 150 133

Nebraska 185 185

Nevada 200 133

New Hampshire 300 185

New Jersey 350 185

New Mexico 235 185

New Yorkf 250 185

North Carolina 200 185

North Dakota 140 133

Ohio 200 150

Oklahoma 185 185

Oregon 170 170

Pennsylvania 235 185

Rhode Island 250 250

South Carolina 150 185

South Dakota 200 133

Tennessee 100 185

Texas 200 185

Utah 200 133

Vermont 300 200

Virginia 185 133

Washington 250 185

West Virginiag150 150

Wisconsin 200 185

Wyomingh133 133

a

Federal Medicaid law mandates that states cover pregnant women up to 133 percent of

the federal poverty level.
Enclosure IV Enclosure IV

16 GAO-01-993R SCHIP Enrollment and Expenditures

b

Only children born after September 30, 1982, and before October 1, 1983, are eligible for

Arkansas’ SCHIP program. The state has received approval from HCFA for a separate

child health program for children in families with incomes from 150 percent to 200

percent of the federal poverty level, but implementation depends on approval of an

amendment to the state’s Medicaid section 1115 demonstration.

c

Infants in Illinois’ SCHIP program born to Medicaid-enrolled mothers are covered to 200

percent of the poverty level; infants whose parents are not enrolled are covered up to 185

percent of the poverty level.

d

Louisiana received approval to raise SCHIP income eligibility to 200 percent of the

poverty level as of June 2001.

e

Maryland implemented a separate child health program extending coverage to children

in families with incomes above 200 percent but at or below 300 percent of the poverty

level effective July 1, 2001.

f

New York began covering pregnant women in Medicaid up to 200 percent of the federal

poverty level as of November 1, 2000.

g

Effective November 1, 2000, West Virginia increased its upper income eligibility limit to

200 percent of the poverty level.

h

Effective September 1, 2001, Wyoming will increase its upper income eligibility limit to

150 percent of the poverty level.

Source: GAO analysis of CMS and state data, and Maternal and Child Health (MCH)

Update: States Have Expanded Eligibility and Increased Access to Health Care for

Pregnant Women and Children (Washington, D.C.: National Governors Association,

Feb. 22, 2001).
Enclosure V Enclosure V

17 GAO-01-993R SCHIP Enrollment and Expenditures

STAFF ACKNOWLEDGMENTS

Key contributors to this correspondence were Karen Doran, Ann Tynan, Catina Bradley,

Paula Bonin, and Elizabeth T. Morrison
18 GAO-01-993R SCHIP Enrollment and Expenditures

RELATED GAO PRODUCTS

Health Insurance: Proposals for Expanding Private and Public Coverage (GAO-01-481T,

Mar. 15, 2001).

Medicaid and SCHIP: Comparisons of Outreach, Enrollment Practices, and Benefits

(GAO/HEHS-00-86, Apr. 14, 2000).

Children’s Health Insurance Program: State Implementation Approaches Are Evolving

(GAO/HEHS-99-65, May 14, 1999).

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