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Agency for Healthcare Research Quality

Coordinating Publicly Funded Healthcare Coverage for Children

Research Report

This report reviews various strategies States have used to coordinate their child health programs, and identifies policies and procedures that promote coordination between separate State Children's Health Insurance Program (SCHIP)-funded child health programs and Medicaid.

About the Workshop Sponsor.


In 1997, Congress enacted the State Children's Health Insurance Program (SCHIP), offering States over $40 billion in Federal matching funds to provide health care coverage to low-income uninsured children. The law allows States to use their Federal SCHIP funds to cover children who were not already eligible for Medicaid by either expanding Medicaid, creating a separate child health program, or adopting a combination of these two approaches.

By August 1999, 27 States had Federal approval to expand coverage for children through a separate child health program, either exclusively or in combination with a Medicaid expansion. Each of these States, as well as those that create separate child health programs in the future, needs to devise strategies for coordinating the new coverage program with Medicaid. This report discusses some administrative strategies that could promote coordination.

Coordination between Medicaid and separate SCHIP-funded programs allows States with two child health programs to create one coverage system. It provides many advantages:

  • Coordination helps prevent children from falling through the cracks in the event that their parents apply to the wrong program.

    Congress specifically required States that use their SCHIP funds to create separate child health programs to screen all children applying for coverage for Medicaid eligibility and to devise systems to enroll Medicaid-eligible children in Medicaid. (This Federal requirement has become known as "screen and enroll.")

  • The screen-and-enroll requirement could help boost enrollment by assuring that families are able to enroll their children in either Medicaid or SCHIP without having to navigate two separate application processes.

    Burdensome application procedures have been shown to be major barriers to enrollment. In a well-coordinated system, one application process serves all children, and the decision about the appropriate program or funding source for a particular child is made behind the scenes.

  • The screen-and-enroll requirement also helps to maximize the number of children who will gain coverage as a result of the SCHIP initiative.

    Without effective screening, Medicaid-eligible children may be inappropriately covered with SCHIP funds. In that case, fewer newly eligible children would be covered as a result of the SCHIP initiative since Federal SCHIP funds are capped. Coordination procedures assure that children who are eligible for regular Medicaid matching payments do not take up an SCHIP health insurance "slot."

  • Coordination at the enrollment stage also helps to ensure that Medicaid-eligible children receive the applicable benefits and cost-sharing protections.

    In States where the SCHIP benefit package is limited, children who are Medicaid eligible but mistakenly enrolled in the separate SCHIP program may not be able to access the medical services they need. They might also be subject to premiums or copayments that are difficult for their families.

  • Effective coordination assures that children retain coverage as long as they are eligible for either coverage option.

    The need for coordination extends beyond the enrollment stage. Fluctuations in income and changes in family circumstances can make children ineligible for the program in which they are enrolled but eligible for the other program. This can result in the loss of coverage and disrupt continuity of care unless systems are in place to assure smooth transitions between coverage programs.

Coordination Strategies

While the benefits of coordination are clear, developing effective coordination strategies can be challenging, particularly if a State creates a separate SCHIP-funded program that looks and operates very differently from the way that Medicaid has traditionally operated in that State.

There is no one right way to coordinate child health programs. However, States appear to have had the most success when they have streamlined their Medicaid application procedures so that they can coordinate enrollment and make the application process simple and accessible for the families of all children.

Coordination is also easier when States align program rules, service delivery systems, and redetermination procedures as far as possible. States that take these steps are likely to be better able to create relatively seamless systems of coverage without adopting complicated coordination strategies that are difficult and costly to administer.

Some of the key Coordination Strategies are listed below and discussed in detail in the full report along with specific State examples. States could adopt most of these strategies without making major changes in the way they have set up their SCHIP-funded coverage; some strategies would require more significant modifications.

Although no one strategy is essential and no one strategy is sufficient to assure that a State's system is well coordinated, State practice has shown that these strategies can make it easier for States to assure that paperwork burdens, inconsistent program requirements, and problems with interagency coordination do not keep eligible children from benefiting from SCHIP and Medicaid.

Administrative Strategies That Could Promote Coordination

  • One program/one name.

    Many of the challenges of coordination can be avoided if Medicaid and SCHIP coverage options are blended into one program. Under this approach, coverage is financed through Medicaid for some children and through SCHIP for others, but all children are served by the same State-created program.

    Several States have adopted variations of this approach. (In some States, the SCHIP component is known as a "Medicaid look-alike.") Typically, different rules relating to benefits, cost-sharing, and entitlement apply to the two groups of children but distinctions in policies and procedures are kept to a minimum.

  • One agency to determine eligibility.

    Even if SCHIP and Medicaid operate as two distinct programs, coordination is simpler if one agency determines eligibility for both Medicaid and SCHIP. When one agency determines eligibility, applications do not have to be passed between agencies (or between a public agency and a private entity) in order for final eligibility determinations to be made.

    Some States that rely on separate entities to determine eligibility for the two programs have eligibility workers for both entities at the same site or have implemented systems for electronic transfer of applications and supporting documents to avoid delays and other problems that can arise.

  • Simplified joint application and single point of entry.

    Most States have recognized the value of using a joint application and single point of entry for Medicaid and SCHIP.
    Under this approach, one application serves both programs, and one entity receives all the applications and screens them to determine if the child appears to be eligible for Medicaid or the separate SCHIP program. Applications are then sent to the appropriate entity for a final eligibility determination. Almost all States with a separate SCHIP program are using or are planning to use a joint application.

  • Verification requirements simplified and the same for both programs.

    Streamlined verification requirements that apply to both programs reduce paperwork burdens for families and for administering agencies. With the same verification requirements for both programs, States that are trying to coordinate enrollment do not need to devise systems to alert families to different verification requirements, and families do not have to supply additional documents if their children are screened and identified as likely to be eligible for Medicaid.

    Federal law accords States broad flexibility to devise streamlined verification rules for both Medicaid and separate SCHIP-funded programs. A growing number of States have taken advantage of this flexibility and eased verification requirements for all children.

  • Easy transitions when eligibility is redetermined.

    Many States are just beginning to focus on ways to coordinate eligibility reviews so that children can retain coverage as long as they are eligible for either program. Some States have already developed a simplified mail-in system for reviewing eligibility that screens children who become ineligible for one program and, when appropriate, automatically enrolls them in the other program without a separate application or a lapse in coverage.

  • Common service delivery system.

    If the programs use the same plans and providers, children who move from one program to another will not have to switch providers or plans. Unnecessary disruptions for families, providers, and managed care plans are avoided.

Program Rules That Could Promote Coordination

  • Age-based eligibility rules ended.

    There are many reasons States might consider dropping age-based eligibility rules that prevent some families from enrolling all of their children in the same program. Age-based standards can complicate enrollment procedures and redeterminations and require some children to transfer from one program to another even when their family circumstances have not changed.

    Although many States have limited or eliminated such age-based "staircase" eligibility, some have not. States can take advantage of the enhanced matching payments under SCHIP to eliminate or limit age-based eligibility standards in their Medicaid program and simplify their eligibility rules.

  • Income and asset rules aligned.

    The screening process is likely to be more complicated and error prone when the two programs use different rules to compute a family's countable income. States have broad flexibility to devise SCHIP rules that are similar to Medicaid rules. They also have some flexibility to revamp their Medicaid rules so that screening and eligibility determinations (and redeterminations) can be accomplished through the same or similar income calculations.

    In both SCHIP and Medicaid, States have the flexibility to drop asset rules or use the same rules for both programs. Different asset rules add another layer of complexity to the screening process. In addition, since States with asset rules generally require applicants to verify assets, asset rules tend to add to the paperwork requirements for families and agencies. Most States disregard assets in both programs.

  • Continuous eligibility.

    "Continuous eligibility" is an option available under both SCHIP and Medicaid that allows children to retain coverage for a period of time regardless of changes in family circumstances. By adopting continuous eligibility in both programs, States could limit the occasions when children will need to move from one program to the other.


Effective coordination strategies connect children to the coverage option that is appropriate for them without creating complex systems that are difficult for families to navigate and States to administer. The key to effective coordination, as demonstrated by State practices, is to simplify procedures for both programs, align program rules and service delivery systems to the extent possible, and make the decisions about which coverage option is appropriate behind the scenes, with as little cross-agency exchange as possible. Such strategies could ease administrative burdens for States and are likely to boost enrollment among Medicaid-eligible and SCHIP-eligible children alike.

AHRQ's User Liaison Program (ULP) disseminates health services research findings in easily understandable and usable formats through interactive workshops. Workshops and other support are planned to meet the needs of Federal, State, and local policymakers, and other health services research users, such as purchasers, administrators, and health plans.

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