The Health Care Financing Administration (HCFA) released guidelines on July 31 for states seeking to create demonstration programs under the State Children's Health Insurance Program (CHIP). Similar waiver programs—state-initiated experiments to evaluate new approaches to providing health care that are not otherwise permitted by federal law—have been implemented by many states under Medicaid, including 13 that expand eligibility for family planning services (see related story). CHIP, unlike Medicaid, was designed to give states broad flexibility in providing health care coverage to uninsured, low-income children. The new guidelines go further, allowing CHIP funds to be used for other purposes, such as expanding coverage to other, related populations, including parents; providing supplemental benefits or developing public health initiatives for children; or promoting enrollment of children eligible for other benefits, such as free and reduced school lunches. The guidelines set several requirements before states may seek waivers, including at least one year of experience providing assistance under CHIP, coverage of children up to age 19 and up to at least 200% of the federal poverty level, and demonstrated success in reaching, enrolling and retaining eligible children. Notably, HCFA will not allow states to waive the statutory provision that caps non-health insurance expenditures, including outreach and enrollment efforts, at 10%.

The new CHIP guidelines were released within weeks of two new studies addressing states' successes under the program and barriers to enrollment in CHIP and Medicaid. A report by the Children's Defense Fund, All Over the Map, details states' programs and ranks each state on its average monthly progress. It also makes recommendations for achieving such goals as maximizing eligibility, simplifying and coordinating CHIP and Medicaid enrollment, improving and expanding outreach, and securing coverage for parents. A separate report, by researchers at George Washington University's Center for Health Services Research and Policy, finds that Medicaid's historical association with welfare is not a barrier to Medicaid and CHIP enrollment, contrary to conventional wisdom. However, other fears—of intrusive questions during the enrollment process and of discrimination by providers—do affect individuals' decisions about enrolling, as does the experience of having applied for benefits at a welfare office.