Children's health insurance: the difference policy choices make

This paper provides estimates of the cost and coverage impacts of the new State Children's Health Insurance Program (SCHIP). The estimates reflect the many choices the states are given by the legislation: whether to use traditional Medicaid or establish separate state-run programs; how far to extend eligibility up the income distribution; and how much to use premiums. We estimate the impacts of these choices on participation by the uninsured as well as by the insured--that is, the crowd-out effect--and on public expenditures. We also estimate the savings to families and firms that substitute SCHIP for private coverage. We conclude with estimates of the cost and coverage impacts of the actual initial choices that states have made.