Analysis on what the SCHIP fight means for Ohio's current program

With President Bush's veto today of the Children's Health Insurance Program (SCHIP) bill, people might be curious how this will affect Ohio and whether our state's SCHIP program will have to suspend operations because of lack of funding.

States had two options for setting up their SCHIP programs. One option was to create a stand alone program, separate from the state's Medicaid program, which would match state funds with the federal SCHIP funds up to the state's fixed federal allotment. If the state’s spending on its SCHIP funds exceeds that federal allotment during the program year, the state must pay 100% of the program costs with state only dollars, scale the program back, or halt the program until new federal dollars became available.

The other option was to integrate the SCHIP program with the state's Medicaid program.  In this scenario, all the children became eligible under Medicaid and the state bills the federal government based at the match rate appropriate for the eligibility status of the child (which is an approximately 72% match rate for SCHIP children and 60% match rate for regular Medicaid children in Ohio). Should the state exceed its SCHIP federal allotment, the state would then continue to cover the children and bill the federal government at the regular match rate. As a result, if the SCHIP program ended for any reason the state would lose 12 cents of federal reimbursement for each child per dollar of funding, not the 72 cents in reimbursement for each child as would occur under a stand alone program.

Ohio chose the Medicaid program option for creating its SCHIP program. Therefore, even if the federal government temporarily stops funding SCHIP because of this political fight over the program, Ohio's SCHIP children will continue to receive their coverage through Medicaid without interruption. Ohio's budget will experience a drop in federal matching funds, but that drop will be roughly 12 cents per dollar per claim or HMO capitation payment.

Ohio's current SCHIP program covers uninsured children living in families with incomes below 200% of poverty. The state budget as passed in July expands coverage to 300% of poverty beginning in January, but this expansion is under doubt due to new rules passed by the Federal government. For more coverage on SCHIP, go here and here.