Children's Health Insurance Program

The State Children’s Health Insurance Program (SCHIP) is a national program in the United States that provides health insurance for families who earn too much money to qualify for Medicaid, yet cannot afford to buy private insurance. The program was created to address the growing number of children in the United States without health insurance. At its creation in 1997, SCHIP was the largest expansion of health insurance coverage for children in the United States since Medicaid began in the 1960s. The statutory authority for SCHIP is under title XXI of the Social Security Act. A proposal recently passed in the Congress to expand SCHIP from $5 billion yearly by $35 billion over five years was vetoed by George W. Bush.. The veto follows changes of program administrative rules in August which make it more difficult for states to expand eligibility.

SCHIP covered 6.9 million children at some point during Federal fiscal year 2006, and every state has an approved plan. States are given flexibility, and an enhanced match is paid to states. Some states have received Section 1115 demonstration authority to use SCHIP funds to cover the parents of children receiving benefits from both SCHIP and Medicaid, pregnant women, and other adults. However, the program is already facing funding shortfalls in several states.

In 2007, researchers from Brigham Young University and Arizona State found that children who drop out of SCHIP cost states more money because they shift away from routine care to more frequent emergency care situations. The conclusion of the study is that an attempt to cut the costs of a state program could create a false savings because other government organizations pick up the tab for the children who leave SCHIP and later need care. In a 2007 analysis by the Congressional Budget Office, researchers determined that "for every 100 children who gain coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children." The CBO speculates this is because the state programs offer better benefits and lower cost than the private alternatives. A Cato Institute briefing paper estimated the "crowding out" of private insurers by the public program could be as much as 60%. The program cost $40 billion federal dollars over 10 years.

Despite SCHIP, the number of uninsured children continues to rise, particularly among families that cannot qualify for SCHIP. An October 2007 study by the Vimo Research Group found that 68.7 percent of newly uninsured children were from families 200 percent above the federal poverty level.

Federal dollars with state administration

Like Medicaid, SCHIP is a partnership between federal and state governments. The programs are run by the individual states according to requirements set by the federal Centers for Medicare and Medicaid Services. States may design their SCHIP programs as an independent program separate from Medicaid (separate child health programs), use SCHIP funds to expand their Medicaid program (SCHIP Medicaid expansion programs), or combine these approaches (SCHIP combination programs). States receive enhanced federal funds for their SCHIP programs at a rate above the regular Medicaid match.

States with separate child health programs follow the regulations described in Section 42 of the Code of Federal Regulations, Section 457. Separate child health programs have much more flexibility than Medicaid programs. Separate programs can impose cost sharing, tailor their benefit packages, and have a great deal of flexibility in eligibility and enrollment matters. The limits to this flexibility are described in the regulations, and states must describe their program characteristics in their SCHIP state plans.

In Ohio, SCHIP funds are used to expand eligibility for the state's Medicaid program. As a SCHIP Medicaid expansion program, all Medicaid rules and regulations (including cost sharing and benefits) apply. Children from birth through age 18 who live in families with incomes above the Medicaid thresholds in 1996 and up to 200% of the federal poverty level are eligible for the SCHIP Medicaid expansion program. In 2004, the maximum annual income needed for a family of four to fall within 100% of the federal poverty guidelines was $18,850, while 200% of the poverty guidelines was $37,700.

Other states have similar SCHIP guidelines with some states being more generous or restrictive in the number of children they allow into the program. SCHIP Medicaid expansion programs typically use the same names for the expansion and Medicaid programs, and separate child health programs typically have different names for their programs. A few states also call the SCHIP program by the term "Children's Health Insurance Program" (CHIP).

Current bill

On October 3, 2007, President Bush vetoed H.R. 976, a bipartisan bill passed by Congress that would have expanded the program by $35 billion. The veto was the fourth of his administration. This proposal would have increased coverage to over 4 million more participants by 2012, and also would have phased out most state expansions in the program that include any adults other than pregnant women. Despite claims that it also would have increased the eligibility from couples earning up to 200% of the federal poverty level to couples earning 300% of the federal poverty level , FactCheck.org has noted that this eligibility was already possible under the old program and is not required by the new bill. The expansion of the SCHIP program was to have been funded by an over one hundred percent increases in cigarette and cigar taxes, coming to an increase of 61 cents per pack of cigarettes nationwide. President Bush vetoed the bill because he believed the bill would "federalize health care", expanding the scope of SCHIP much farther than its original intent. After his veto, Bush said he was open to a compromise that would entail more than the $5 billion he originally budgeted, but would not drastically expand the number of children eligible for coverage. Democratic leaders have delayed a vote to override the veto until October 18, in hopes that grassroots, television, and radio publicity will persuade fifteen Republicans to cross party lines to override the veto.

See also

• TexCare
• Graeme Frost

References

• SCHIP Summary - Centers for Medicare and Medicaid Services
• Ohio Medicaid Basics - Health Policy Institute of Ohio
• BYU News - BYU researcher helps show the cost of kids losing health insurance: more than $2,000 each

External links

• The Heritage Foundation's State Children's Health Insurance Program
• SCHIP information, including an Action Alert users can take to contact their elected officials at www.easterseals.com
• Portal for SCHIP information at cms.hhs.gov
• Kaiser Foundation Resources on SCHIP - wide range of background information, fact sheets, and studies on SCHIP and other U.S. health programs.
• SCHIP Blog Blog covering SCHIP news for parents.
• President Bush's Stance on SCHIP Reauthorization, Bush: No Deal On Children's Health Plan