Econometrics Medicaid/Medicare

SCHIP expansion in Minnesota and New York

Under the Balanced Budget Act of 1997, the Federal government established the State Children’s Health Insurance Program (SCHIP), which was aimed at reducing the number of uninsured children in the United States. States were given a variety of options of how to implement this program. Nineteen states decided to operate the SCHIP program as an extension of Medicaid (M-SCHIP), fifteen states operated stand-alone programs (S-SCHIP) and 17 states used both approaches.

Researchers often use a variety of regression methods to test for the impact of government programs on various variables. A common approach in this case is to use an ‘eligibility’ variable to test for a change in insurance coverage. However, a Rosenbach, Ellwood, Czajka, Irvin, Coupe and Quinn (2001) paper gives one pause as to the effectiveness of such a simple approach.

For instance Minnesota’s M-SCHIP program extended insurance benefits to less than 100 individuals. New York’s S-SCHIP program had an enrollment of over 500,000 children. What accounts for these differences?

Prior to Title XXI–the SCHIP legislation–Minnesota already had a generous public insurance benefit for children under their Medicaid system. Children at or below 275% of the poverty line were eligible for Medicaid insurance prior to the national legislation. After the legislation, a child had to be at or below 280% of the federal poverty line–an insignificant change.

New York also had a children’s insurance benefit (CHPlus) before Title XXI came into effect. CHPlus granted insurance to children below a less generous threshold, ranging between, 100% to 192% of the federal poverty line. The state, however, rolled over all CHPlus participants (over 170,000 individuals) into their new S-SCHIP program.

Thus, it is imperative that a researcher not assume that pre-SCHIP benefit levels in each state are comparable, or else one will reach erroneous conclusions.