SCHIP appeals to lawmakers because the Center for Medicare and Medicaid Services (CMS) allows states to adjust eligibility requirements, change the benefits package, use managed care principles, and add cost controls. This flexibility matters during economic downturns. During budget squeezes states avoid cutting SCHIPs by raising premiums and copays, reducing outreach and marketing, tightening income verification, and closely managing care. In good times states expand SCHIPs by subsidizing employer coverage, raising upper income limits, covering prenatal care, and, through federal waivers, adding some adults.
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April 2007Casting a Wider Net
Although SCHIP seems to make broadening access to health care possible, no less an authority than John Kitzhaber, MD, former Oregon governor and prime mover of the Oregon Health Plan (OHP), that state’s program to cover the uninsured, disputes such feasibility. I have come to believe that universal coverage by itself will not solve our health care crisis….Everyone over age 65 is already covered by Medicare, yet the result is an unfunded entitlement in excess of $65 trillion that casts a dark shadow over our nation’s fiscal future, said Dr. Kitzhaber on his Web site (www.archimedesmovement.org ).
In Oregon, initial talk about universal access brought fear that extending health coverage without controls would swamp the budget. Dr. Kitzhaber bravely forced public attention on cost control through rationing, a concept anathema to most Americans, who seem to want everything without having to pay for it. A protracted debate ensued. After heavy negotiations, OHP published a list of diagnoses and procedures; those above the line were paid for; those below the line were not covered.
Mark A. Richardson, MD, Chairman of the Otolaryngology Department of the Oregon Health and Sciences University School of Medicine, said OHP’s rationing successfully broadened access to care. A tonsillectomy for chronically inflamed tonsils wasn’t covered but we saw a lot of chronic ear diseases earlier and reimbursement was okay, nearly equivalent to Medicare, he explained.
In 1989 Oregon enacted legislation for universal access funded by an employer mandate, which was quickly rejected. So Oregon, led by Dr. Kitzhaber, focused on expanding Medicaid via a cigarette tax. OHP offered a benefits package leaner than Medicaid and with capitated managed care. In its halcyon days of 1994-1998, OHP covered more than 100,000 uninsured individuals per month and dropped the uninsured rate from 18% to 11%. In 2002 OHP Phase II added 46,000 more uninsured persons, with premium subsidies at 185% FPL.