In a State Health Official letter issued Aug. 17, the Centers for Medicare and Medicaid Services (CMS) released guidance to state Medicaid agencies clarifying the application of existing statutory and regulatory requirements in state requests to extend eligibility under the State Children’s Health Insurance Program (SCHIP) to children in families with effective family income levels above 250 percent of the federal poverty level. These requirements ensure that extending eligibility to children at these higher effective income levels does not interfere with providing child health assistance to the core SCHIP population of uninsured targeted low-income children.
Provisions of the Social Security Act requires that state child health plans include procedures to ensure that SCHIP coverage does not substitute for coverage under group health plans (known as “crowd-out” procedures). As CMS has developed more experience and information from the operation of SCHIP programs, it has become clear that the potential for crowd-out is greater for higher-income beneficiaries.
