Clearing Up Confusion on the Costs of Covering Uninsured Children Eligible For Medicaid or SCHIP

Publication Date: March 2007

Publisher: Center on Budget and Policy Priorities (Washington, D.C.)

Author(s): Edwin Park; Robert Greenstein; Matthew Broaddus

Research Area: Health

Keywords: Federal budget; Economic projections; Health insurance; Health care costs

Type: Report

Abstract:

In recent days, several media accounts have cited some Congressional offices from both parties as saying that a Congressional Budget Office memo issued last month shows that the cost of immediately covering all uninsured children who are eligible for Medicaid or the State Children’s Health Insurance Program (SCHIP) would be $32 billion over five years. Since CBO places the net cost of fully averting the looming federal funding “shortfalls” in state SCHIP programs (i.e. of enabling states to sustain their current programs) at just under $8 billion over five years, some Congressional staff have concluded that the total cost of closing the shortfalls and covering all eligible, uninsured children is $40 billion over five years. The February CBO memo, however, did not discuss the cost of covering all eligible uninsured children. Due to the way that the memo presented its data, it is easy to see how a reader of the memo could draw the conclusion that CBO was estimating the cost of covering all eligible uninsured children at $32 billion over five years. But such a conclusion is not valid, and the $32 billion figure understates the cost, as this analysis — and a new CBO memo issued March 13 — indicate.