The General Accountability Office says the Centers for Medicare & Medicaid Services needs to upgrade its information on whether crowd-out should be a concern in states due to the State Children's Health Insurance Program.
In a report released Monday, the GAO recommended that CMS ensure that states collect and report consistent information on whether SCHIP applicants have affordable private insurance available to them.
Congress created SCHIP to reduce the number of uninsured children in low-income families that do not qualify for Medicaid. States have flexibility in structuring their SCHIP programs, and their income eligibility limits vary. Some have raised concerns that individuals might substitute SCHIP for private health insurance – known as crowd-out.
The study comes as Congress prepares to draft healthcare reform legislation that Democrats would like to gear toward a private-public system. Republicans have said the crowd-out of private insurance is one of their major concerns with such a plan.
For the report, the GAO said it reviewed federal laws and guidance, examined state annual reports and interviewed CMS officials, including SCHIP officials from nine states.
Of the nine states interviewed, five measured the occurrence of crowd-out, but all used different methods to develop their estimates. None of the officials in the nine states said they view crowd-out as a concern, with most basing their assessment on a variety of factors, including the lack of available and affordable private health insurance for the SCHIP population in their state.
Overall, CMS officials agreed with the GAO's recommendation, but raised concerns about the difficulty of measuring crowd-out, particularly in assessing the affordability of private coverage. GAO officials agreed that measuring crowd-out is complicated, but said they "are an essential first step to better assessing whether concerns about crowd-out are warranted."