How Much Can Really Be Saved by Rolling Back SCHIP? The Net Cost of Public Health Insurance for Children

• Published in: Inquiry (Chicago) Vol. 42; no. 1; pp. 16 - 28
• Main Authors: Selden, Thomas M., Hudson, Julie L.
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA Excellus Health Plan, Inc 01.04.2005; SAGE Publications; SAGE PUBLICATIONS, INC; SAGE Publishing
• Subjects: Budgets; Child; Child health; Child Health Services - economics; Children; Children & youth; Childrens health insurance programs; Cost analysis; Cost control; Cost Control - methods; Cost estimates; Costs; Eligibility Determination; Enrollments; Entitlement programs; Expenditures; Federal budgets; Federal government; Finance; Government spending; Health care costs; Health care policy; Health insurance; Humans; Indigent care; Insurance aspects; Insurance coverage; Insurance Coverage - economics; Insurance Coverage - utilization; Low income groups; Medicaid; Medicaid - economics; Poverty; Public health; Public Sector - economics; Simulation; State Health Plans - economics; Subsidies; Tax increases; Uncompensated care; Uninsured people; United States; United States; United States > US
• ISSN: 0046-9580; 1945-7243
• DOI: 10.5034/inquiryjrnl_42.1.16

A growing body of research demonstrates the many benefits of expanded public coverage for children. Expansions in Medicaid and the State Children's Health Insurance Program (SCHIP) have helped to increase insurance coverage, increase access to care, and reduce the financial burdens facing low-income families. Less attention has been focused on the cost of expanding public coverage. We argue that budgetary data may exaggerate the net costs of these expansions because many of the highest-cost children would have received publicly funded care even if the expansions had not taken place. Using data from the 2000 Medical Expenditure Panel Survey, we simulate the net cost of SCHIP, finding that the true cost of this program-both to states and to the federal government-is substantially less than average spending per enrollee would suggest. Our results strengthen the benefit-cost argument against implementing rollbacks in SCHIP.