Communities Play Key Role in Extending Public Health Insurance to Children

Issue Brief No. 44, October 2001 — By Laurie E. Felland and Andrea Staiti

Virtually all low-income children in the United States became eligible for public health insurance through either Medicaid or the State Children's Health Insurance Program (SCHIP) by the early 2000s, yet millions of qualifying children remained without coverage. Recognizing that eligibility alone was not enough, states began partnering with local communities to boost SCHIP enrollment. Site visits by the Center for Studying Health System Change (HSC) to 12 nationally representative communities revealed that organizations with no traditional involvement in public health insurance — schools, employers, churches, and neighborhood groups — had taken on significant outreach responsibilities. Local social service agencies, health departments, and medical providers were also helping children gain coverage. For policy makers working to increase enrollment, these grassroots efforts provided a practical blueprint. However, local SCHIP outreach, while generally effective, was expensive — and state budget shortfalls combined with declining federal SCHIP appropriations posed a real threat to sustaining these activities.

States Partner with Local Organizations

Roughly 2.7 million children had enrolled in SCHIP by December 2000 — the most recent monthly enrollment data available at the time — but an estimated 2 million additional children who likely qualified had not signed up. Research from The Urban Institute pointed to several persistent barriers: lack of information among eligible families, confusion surrounding eligibility requirements, and administrative burdens that discouraged applications. Meanwhile, an HSC study suggested that improved outreach, rather than further eligibility expansions, was the most promising route to extending coverage to low-income children.

Over the preceding two years, states had increasingly relied on local organizations to help identify and enroll eligible families in SCHIP. The program allowed states to extend coverage to children in households earning too much for Medicaid but too little to afford private insurance. States could structure SCHIP as a standalone program or as a Medicaid expansion, covering children in families with incomes up to 200 percent of the federal poverty level — approximately $35,000 for a family of four in 2001 — or even higher.

To distance the program from the stigma often attached to government assistance, states made deliberate efforts to present public health insurance as something separate from welfare. Many adopted branding strategies that made their programs resemble commercial health plans, using names like Washington state's "Healthy Kids Now" and issuing enrollees insurance cards that looked like those from private carriers.

Even with these design features and large-scale media campaigns, many states initially found it difficult to get children enrolled. In response, they simplified application processes and directed funding and training to local organizations that could raise awareness about SCHIP, locate eligible children, and walk families through the application process. In many communities, health departments, social service agencies administering SCHIP and Medicaid, or consumer advocacy groups coordinated outreach and subcontracted with other organizations — many of which had no ties to the welfare system. HSC's site visits found a broad mix of local players deeply engaged in reaching hard-to-find children, including health care providers, schools, employers, and community and religious groups.

Early observations from state and local leaders working on SCHIP suggested that local organizations could meaningfully boost enrollment in public programs. Several states and communities reported substantial enrollment gains over the prior year. Because SCHIP and Medicaid outreach often overlapped — states were required to screen SCHIP applicants for Medicaid eligibility first — many respondents noted that SCHIP outreach had also driven up Medicaid enrollment.

Several factors contributed to the success of locally driven outreach. Efforts led at the community level could be tailored to the specific demographics and needs of a given area, making it easier to identify and reach key populations. The involvement of organizations that low-income families already trusted and interacted with regularly helped build participation in public health programs.

To connect with hard-to-reach populations, organizations translated SCHIP materials into families' native languages and hired outreach workers who shared the racial, ethnic, or cultural backgrounds of the groups they were targeting. Many focused specifically on minority communities and families with relatively higher incomes, reasoning that the stigma of government programs might keep these groups from applying on their own. Eligible immigrants who faced language barriers or feared that participation could jeopardize their immigration status were also a priority. Communities also targeted their own unique populations — in Miami, for instance, outreach was heavily directed toward Haitians and migrant farm workers.

While local leaders considered targeted outreach effective, the intensive one-on-one approach came at a high cost. Funding for outreach typically came from state and federal SCHIP and Medicaid administrative budgets, Temporary Assistance to Needy Families (TANF) dollars, and other state and local sources. Organizations received either lump-sum or per-application payments, generally between $25 and $50 per application. In many cases, however, the actual cost of outreach exceeded the funding organizations received, leading them to draw on their own resources and private funding sources such as The Robert Wood Johnson Foundation's Covering Kids initiative.

Local Outreach Involves a Wide Range of Organizations

The push for community-based SCHIP outreach drew in a large and varied network of local organizations. The most active participants were health care organizations and schools. Community and religious groups were becoming increasingly involved, and employers had begun to participate in some areas.

Health Care Organizations: Local health departments, providers, and health plans had long conducted Medicaid outreach, but many stepped up their efforts under SCHIP. Hospitals and community health centers, in particular, devoted significant resources to identifying uninsured children when they came in for services and then assisting parents with the application. Providers generally had a financial motivation for helping uninsured patients enroll, since SCHIP payments for covered children could exceed what they received for uncompensated care. In some cases, however, SCHIP reimbursement rates were relatively low and could actually fall below payments from a charity care pool or other public funding streams.

Local health departments and social service agencies often supported other providers' SCHIP activities while running their own outreach programs. The Ingham County Health Department in Lansing, Michigan, for example, trained area providers about the MIChild program and helped them screen potentially eligible children. These agencies also tried to locate uninsured children who did not access regular medical services, conducting neighborhood health fairs, deploying mobile health vans, and canvassing door to door.

In some communities, health plans promoted general SCHIP awareness through broad public information campaigns. However, plans in a number of states were restricted from marketing their SCHIP products directly because of concerns about inappropriately influencing beneficiaries' plan selection at enrollment.

Schools: Schools emerged as a major vehicle for SCHIP outreach in many communities, and school-based strategies became a leading approach. School nurses often coordinated these efforts, screening students for health insurance during annual registrations, sending information home with students, and discussing the program with parents at meetings. Many schools linked SCHIP outreach to the federal free-and-reduced school lunch program. In South Carolina, however, schools expressed concern that SCHIP outreach might stigmatize children by drawing attention to their families' financial situations.

States and communities with lagging enrollment increasingly promoted school-based outreach. Arizona's legislature, for instance, passed a law allowing the state to contract directly with schools for this purpose.

Community and Religious Groups: Reaching children outside the school system — often the hardest to find — required the involvement of community organizations. Childcare centers, food banks, homeless shelters, children's groups, and VISTA volunteers all played important roles. Local organizations also distributed SCHIP applications through small businesses like neighborhood grocery stores and beauty salons.

Religious organizations were becoming more active in SCHIP outreach, partly because recent changes in federal rules allowed states to contract with faith-based groups as long as the individuals they served were not required to participate in religious activities. Indiana's SCHIP agency, for example, distributed TANF funds to Indianapolis churches to help members complete applications for Hoosier Healthwise. The United Methodist Church of New Jersey was planning to designate leaders in 300 congregations to help ensure eligible members knew about the state's Family Care program.

Employers: Some communities directed outreach toward business groups or employers with low-wage workforces, including small businesses and temporary employment agencies. Many of these employers either did not offer health insurance to workers or their dependents, or offered coverage that was too expensive for low-income employees to afford. Employers were well-positioned to direct workers to SCHIP, especially those who did not realize they might qualify for public insurance.

Consultants and insurance brokers participated in educating employers and employees about SCHIP in some areas. Cuyahoga County, Ohio, contracted with a human resources firm to conduct presentations and provide application assistance to workers at several hundred small companies in the Cleveland area, enrolling 590 children and adults at an estimated outreach cost of $157 per enrollee. In Orange County, California, brokers initially signed on with the state to conduct Healthy Families outreach through their small employer clients but later pulled back, saying the payments were too low.

A major concern about employer involvement in SCHIP outreach was crowd-out — the risk that employees would drop employer-sponsored coverage in favor of SCHIP. States were required to have crowd-out prevention measures in place, such as verifying that a child had not been covered by private insurance for a set period before receiving public coverage. With the economy softening, some states worried crowd-out could worsen and were attempting to measure it so they could adjust eligibility rules if needed — for instance, by extending the waiting period for children who had recently been privately insured.

Across HSC's 12 study sites, hospitals and health centers were extensively involved in SCHIP outreach in all 12 communities. Community groups and social service agencies or health departments were active in 11 sites each. Schools were involved in 10 sites, while health plans and religious organizations each participated in 7. Employer-related outreach activities were present in 5 communities.

Policy Implications

By 2001, SCHIP had expanded health insurance coverage to millions of children nationally, and some communities and states were nearing or surpassing their enrollment goals. While local outreach was not the sole driver of this progress, community organizations' creativity in customizing strategies and their ability to provide personal, one-on-one assistance produced meaningful results — though at a considerable cost.

States that continued to struggle with enrollment, such as Arizona and California, were increasingly shifting their focus to local activities. In California, the effectiveness of school-based outreach prompted the governor to increase local outreach funding, and early reports indicated the change was helping to boost enrollment. At the federal level, the Centers for Medicare and Medicaid Services had encouraged states to develop school-based outreach activities.

Despite outreach successes, SCHIP continued to face serious challenges. Many states and communities had struggled to enroll eligible children, and millions remained eligible but unenrolled. Respondents pointed to ongoing problems with language barriers, stigma, and cumbersome application requirements.

Keeping children enrolled also proved difficult because frequent changes in family income or insurance status affected eligibility. Many enrollees unintentionally lost coverage when they were required to renew every six or twelve months. Reports from several communities indicated that for every three children newly enrolled in SCHIP, one dropped out. A few states had begun turning to local organizations to address this turnover problem. A Massachusetts pilot program, for example, planned to use local health care providers to help patients re-enroll using streamlined forms with fewer documentation requirements. In general, however, most organizations lacked the ability to track the enrollment status and renewal dates of the children they had helped bring into the program.

Funding shortfalls may have posed the greatest threat to local SCHIP outreach. Many states faced budget deficits alongside higher-than-expected Medicaid and SCHIP enrollment and per-enrollee costs. Federal funding for SCHIP in fiscal year 2002 was set to decline roughly 25 percent, dropping from $4.2 billion in 2001 to $3.1 billion in 2002, with reduced funding levels continuing through fiscal year 2004.

Some relief was expected from the federal Benefits Improvement and Protection Act of 2000, which allowed states to use some unspent SCHIP funding from fiscal year 1998 on outreach. Legislation introduced in the U.S. Senate would have provided federal grants to community organizations for outreach activities, but the shrinking federal budget surplus was likely to dampen appetite for new spending.

In theory, communities could adapt to reduced outreach funding over time as more children gained coverage and outreach and retention strategies became more efficient. Yet communities still needed resources to maintain enrollment, locate hard-to-reach children, and enroll newly eligible populations — including adults. Orange County formed a task force to determine how to leverage existing local funds to preserve its extensive outreach infrastructure in the event of federal and state funding cuts. Many other states and communities faced similarly difficult decisions about sustaining successful local outreach with fewer dollars.

Data Sources and Methodology

The role of local organizations in SCHIP outreach was examined as one of several special study topics during HSC's 2000-01 site visits to 12 nationally representative communities: Boston; Cleveland; Indianapolis; Lansing, Michigan; Little Rock, Arkansas; Greenville, South Carolina; Miami; northern New Jersey; Orange County, California; Phoenix; Seattle; and Syracuse, New York. Researchers interviewed individuals in each community who were involved directly or indirectly in outreach, including representatives of state government and health agencies, local health departments, SCHIP agencies, consumer advocates, health care providers, and health plans. This Issue Brief is based on a systematic analysis of these individuals' assessments of local SCHIP outreach, formal evaluations, and informal tracking at participating organizations.

Sources and Further Reading

1. Smith, Vernon K., et al., "CHIP Program Enrollment: December 2000," The Kaiser Commission on Medicaid and the Uninsured (September 2001).
2. U.S. General Accounting Office, GAO-01-993R, "SCHIP Enrollment and Expenditures" (July 2001).
3. Kenney, Genevieve, and Haley, Jennifer, "Why Aren't More Uninsured Children Enrolled in Medicaid or SCHIP?" The Urban Institute, Series B, No. B-35 (May 2001).
4. Cunningham, Peter J., "Targeting Communities with High Rates of Uninsured Children," Health Affairs, Vol. 20, No. 5 (September/October 2001).