Setting Income Thresholds in Medicaid/SCHIP

With discussions on the State Children’s Health Insurance Program’s (SCHIP) reauthorization expected soon, important policy questions are being raised about who will be covered. A new Urban Institute analysis compares current costs of living and costs of employer-sponsored insurance (ESI) with figures from a decade ago.

The authors suggest that while a family income ceiling of 200 percent of the federal poverty level (FPL) might have been reasonable in many states when SCHIP was created in 1997, that may not be the case today. This seems particularly true in high cost-of-living areas, given the large increases in health care premiums relative to much smaller changes in the federal poverty level over the past decade.

In fact, the analysis finds that ESI premiums now consume a higher share of income for families at 300 percent of FPL than they did for families at 200 percent of FPL in 1996.

The authors say that unless cost containment strategies are implemented, budgetary pressures on public programs will keep increasing.