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Memorandum: Approximate Costs of Covering More Children in Medicaid and SCHIP [i] (February 2007)

handle is hein.congrec/cbo9298 and id is 1 raw text is: MEMORANDUM TO: Health staff of the House and Senate Budget Committees, the House Energy and Commerce Committee, and the Senate Finance Committee FROM: Jeanne De Sa and Eric Rollins, CBO DATE: March 13, 2007 RE: Clarifications to our estimates of the costs of covering more children in Medicaid and SCHIP On February 20, we issued a memo that included rough estimates of the costs of covering an additional one million children in Medicaid or the State Children's Health Insurance Program (SCHIP). There has been some confusion about how to use those figures to estimate the cost of providing coverage to uninsured children who are eligible for Medicaid or SCHIP, so we would like to make some additional points about those estimates. First, our earlier memo provided the approximate cost of covering an additional one million children at some time during the year. As we noted in our February 20 memo, many children are covered for only part of the year, and the increase in enrollment averaged over the course of the year-sometimes known as average monthly enrollment-would be smaller. (Children in Medicaid are enrolled, on average, for about 80 percent of the year, while children in SCHIP are enrolled, on average, for about 60 percent of the year.) As a simplified example, consider a proposal that enrolls two additional children: one for the first six months of the year and the other for the second six months of the year. The increase in enrollment averaged over the course of the year (or average monthly enrollment) would be one child. The increase in terms of children covered at some time during the year, however, would be two children. Our February 20 memo provided rough cost estimates for this latter concept, while noting that it differed from the average monthly enrollment concept. The table below provides separate estimates of the approximate cost of covering an additional one million children, measured for both concepts. The first set of estimates assumes that a total of one million children would be enrolled at some time during the year, which would increase average enrollment over the course of the year (that is, average monthly enrollment) by about 800,000 for Medicaid or about 600,000 for SCHIP. The second set of estimates assumes that average enrollment over the course of the year would increase by one million children, which would raise the number of children who are enrolled at some time during the year by about 1.25 million for Medicaid or about 1.67 million for SCHIP. Second, estimates of the number of uninsured children who are eligible for Medicaid or SCHIP are typically based on data from the Census Bureau's Current Population Survey

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