Hot Button Issue
Crowd out — replacing private health coverage with public program coverage — was a hotly-debated issue in the months leading up to the enactment of SCHIP.
This report shares results of a study that asked if states were concerned about crowd out under the State Children’s Health Insurance Program (SCHIP) and, if so, how they were addressing these concerns. To complete this study, researchers conducted site visits and telephone interviews with representatives in 18 states.
Most states — 12 of 18 — opted to be fairly aggressive in preventing crowd out under SCHIP. These states implemented waiting periods between 2 and 6 months. Other states, notably those with prior experience administering subsidized children’s health insurance programs, didn’t view crowd out as a major issue. These states implemented less aggressive policies, such as monitoring, cost sharing and inquiring about private health insurance on SCHIP applications.