NCPA - National Center for Policy Analysis

SCHIP: Children's Health Care Program Can't Give It Away

September 7, 2001

Virtually every child in a low-income family is eligible for either Medicaid or the State Children's Health Insurance Program (SCHIP), but 24 percent (or about 7.7 million) of the 32 million children in low-income families remain uninsured. Many analysts are puzzled why so many children remain unenrolled in these government health programs. The answer may be that their parents have decided they don't need or want them.

The states have not been able to spend all the federal SCHIP funds they were allocated. Nearly half of 1998's $4 billion allocation was returned unspent. Of the allocation for the last three years, the states have spent just 24 percent of their federal funds.

An Urban Institute study found that 88 percent of low-income respondents had heard of SCHIP and/or Medicaid -- but less than one-fourth (24 percent) of those ever inquired about the programs. Of low-income parents whose children had no health care coverage (see figure):

  • 22.1 percent said they "did not need or want" the program; 17.7 percent said they did not think their child was eligible; 17.8 percent said their children had been enrolled in SCHIP or Medicaid at some time in the past year but no longer were; and 11 percent said they had applied but never enrolled their children.
  • 96.8 percent of those who "did not want or need" the program considered their kids to be in excellent, very good or good health.
  • Of those surveyed, 24.2 percent said they had "no usual source of care," but only 9.8 percent said they had "any unmet need."

As an alternative, analysts suggest that the money spent on SCHIP be used to help the uninsured buy private insurance.

Source: Greg Scandlen (NCPA senior fellow in health policy), "Propping Up SCHIP: Will This Program Ever Work?" NCPA Brief Analysis No. 371, September 7, 2001, National Center for Policy Analysis.

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