State Medicaid administrators have been telling state children's health insurance programs (SCHIP) to back off outreach efforts, Inside CMS ($) reports today.

The crux of the issue is that when SCHIP programs do outreach, they tend to find and sign up children and adults not only for SCHIP, but for Medicaid, as well.

Medicaid is an entitlement program whose costs are determined largely by the number and type of participant. When more people sign up for Medicaid, it's mandated by law to provide services, and costs go up. (SCHIP is not an entitlement program. States can deny services to eligible children if they do not have enough resources available.)

States and the federal government split the cost of both SCHIP and Medicaid- 85 federal/15 state and 65 federal/35 state, respectively. So states are mandated to pay a lot more when people sign up for Medicaid- hence the resistance to SCHIP outreach that attracts new Medicaid participants.

With rising medical costs and smaller tax bases, states nationwide have been scaling down outreach, as many state administrators quoted in the article attested to.

"I don't think that states are doing the kind of out there, in-your-face campaigns that they were doing at the beginning of the program," said another state Medicaid official. "Hopefully, through the reauthorization process, some of these concerns can get addressed," the official told Inside CMS.

This may help explain why enrollment in SCHIP has not increased substantially in recent years, and perhaps why Medicaid costs did not increase this year. Recall also that states have been cutting Medicaid costs by requiring "proof of citizenship" documentation that low-income citizens often do not have. Is this arbitrary, unfair way of discouraging eligible Medicaid recipients really the way we want to control Medicaid costs?

If legislators design an expansion of the SCHIP program this year, they should consider how Medicaid cost concerns can influence SCHIP rolls. Otherwise, states may not vigorously pursue new SCHIP enrollees, and too many children will still lack proper health care.