Has the Jury Reached a Verdict? States' Early Experiences with Crowd Out under SCHIP. Occasional Paper Number 47. Assessing the New Federalism: An Urban Institute Program To Assess Changing Social Policies.

Prior to the enactment of the State Children's Health Insurance Program (SCHIP), policymakers examined the need to safeguard the private insurance market from "crowd out," the substitution of public health insurance coverage for private health insurance coverage. This qualitative study examined how 18 states are addressing crowd out, the degree to which state officials perceive crowd out to be occurring, and the implications of crowd-out prevention strategies on enrollment. Data were collected through site visits and telephone interviews with a broad range of key informants in the 18 states (Alabama, California, Colorado, Connecticut, Florida, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Texas, Washington, and Wisconsin). Findings indicate that 17 states adopted policies to address crowd out. Seven types of crowd-out strategies were identified: (1) waiting periods; (2) monitoring/application questions regarding children's health insurance status; (3) verifying insurance status against databases of private coverage; (4) cost sharing; (5) subsidizing employer-based coverage; and (6) imposing obligations on employers or insurers. SCHIP and Medicaid officials, as well as other key informants, consistently reported little to no concern over crowd out. However, the pressures to increase enrollment have begun to outweigh concerns about crowd out at the state and local levels. It was concluded that although it is difficult to predict the direction that SCHIP will take, clearly the issues surrounding crowd out will continue to influence the discussion, particularly as the program reaches higher income families. (Two appendices delineate the types of policies to deter crowd out in 50 states and the District of Columbia, and list key SCHIP and Medicaid contacts in the study states. Contains 16 references.) (KB)