State Children’s Health Insurance Program (SCHIP)

Background

The State Children’s Health Insurance Program (SCHIP) is a federal-state partnership that provides six million low-income children with access to health insurance. Created by the Balanced Budget Act of 1997 (and enacted under Title XXI of the Social Security Act), SCHIP was authorized through 2007 at a level of $40 billion.

The SCHIP program reaches a population in great need of health care. It covers children who are not eligible for Medicaid because their family income is too high by Medicaid standards, yet they are still unable to afford private health insurance. Children qualifying for SCHIP are under 19 years of age and have family incomes below 200% of the Federal Poverty Level.

States have several options in designing their SCHIP program, including expanding Medicaid, creating a separate state program, or utilizing a combination of both. Fourteen states expanded Medicaid to children using federal SCHIP funds, 19 states created separate state CHIP programs, and 18 states have combination Medicaid and SCHIP programs. The federal government shares with states the expense of providing health coverage, through the Federal Medical Assistance Percentage (FMAP) rate. The match rate is based on each state’s per capita income; states with lower per capita incomes receive more federal funding. The FMAPs are generally more favorable for SCHIP than Medicaid; in 2006 the average federal match for SCHIP was 72.13% of expenses versus 60.19% for Medicaid. States can receive a maximum 85% FMAP for SCHIP.

Some states have utilized waiver options or implemented innovative practices to widen the reach of their SCHIP programs. A number of states have expanded eligibility beyond the 200% Federal Poverty Level (FPL); in Missouri the eligibility level for children is 300% below FPL and in New Jersey 350% below FPL. Other localities have conducted organized outreach in schools and communities to ensure the eligible are enrolled. In Nevada, officials created Help Sessions at local schools to provide bilingual application assistance (Covering Kids and Families). In Connecticut, a partnership was created with businesses to supply information on children’s health insurance at pharmacy stores and in shopping bags. Additionally, states have tried to simplify and streamline application processes to reach more children. For example, the majority of states have done away with in-person interviews for SCHIP applications. More states could utilize other public benefit applications such as child-care or food stamps as a means or gateway to enroll children in SCHIP; in California food stamp applicants who appear eligible for SCHIP or Medicaid are sent a notice with more information to apply.

Current Issues and Challenges

The SCHIP program has been successful in increasing the number of low-income children who are insured. For example, between 1997 and 2003, the uninsured rate of low-income children was reduced by a third, from 23% to 15%. However, many children are still in need. In 2005, the rate of uninsured children increased from 10.8% to 11.2%. Today there are 9 million children without any health coverage. Added to that, employer-based coverage has been decreasing in recent years. Low-income parents often do not have the option of obtaining health insurance through their jobs. For those with the option, it is often not be affordable.

The SCHIP program is of vital importance to fill the unmet gap in providing health coverage to needy children. Ensuring that the program covers all eligible children is very important in SCHIP reauthorization. Advocates estimate that $50 billion is needed to reauthorize SCHIP in a manner that would allow it to not only continue covering currently enrolled children, but extend the program to those who are eligible but not yet enrolled. Mere extension of the SCHIP program as it is will not provide sufficient resources to cover the many uninsured children in our nation as these populations increase and health costs increase. Without additional funding provided above the baseline, by 2012, 34- 36 states would experience shortfalls equivalent to the cost of covering up to 1.8 million children (Center on Budget and Policy Priorities).

In August 2007, Congress took important steps forward to reauthorize the State Children’s Health Insurance Program (SCHIP) and improve health coverage for low-income children.

On August 1, the U.S. House of Representatives passed its legislation, the “Children’s Health and Medicare Protection Act of 2007” or CHAMP Act (HR 3162). The measure passed by a vote of 225 to 204. The House legislation includes a number of important policy changes to SCHIP. It provides $50 billion in new resources over five years, paid for with a new tobacco tax and changes to Medicare Advantage payments. The legislation allows states to extend health insurance to legal immigrant children and pregnant women who have been in the United States for less than five years, provides a state option to expand SCHIP coverage to age 21; gives incentives to states that effectively reach and enroll eligible children; improves benefits for dental health and mental health parity; and extends Medicaid Transitional Medical Assistance (TMA) for two years. The current TMA extension expires in September.

On August 2, the Senate passed its legislation (S.1607) to reauthorize SCHIP. The bill passed by a vote 68 to 31, a strong indication of bipartisan support for SCHIP. The Senate bill makes significant changes to SCHIP, including $35 billion in new resources over five years; improvements to dental and mental health coverage; state incentives to enroll eligible children; and demonstration projects for express lane eligibility.  Click here to see a comparison of the House and Senate bills.

While Catholic Charities USA is pleased with many of the important changes in both the Senate and House bills, there are significant challenges ahead. There are significant differences between the House and Senate bills and both chambers will need to negotiate those differences in September. President Bush has also threatened to veto any comprehensive legislation to strengthen SCHIP.

Catholic Charities USA’s Position

Catholic Social Teaching tells us that every person has a basic human right to adequate health care. Society has a responsibility to ensuring that everyone has access to health care, to protect the dignity of the human person and ensure the common good. In 2005, Catholic Charities USA member agencies provided health-related services to 170,773 persons across the nation. In addition to providing such direct services, Catholic Charities USA Catholic Charities USA strongly supports:

  • Preserving the Medicaid and SCHIP safety net and the benefits they provide for low-income children
  • Expanding SCHIP to all eligible children in low-income families
  • Providing incentives to states to provide coverage up to 300 percent of poverty
  • Providing adequate funding to prevent a SCHIP funding shortfall in states
  • Reauthorizing SCHIP at a higher funding level rather than freezing funding
  • Providing federal financial incentive for states to engage in outreach and improve enrollment processes
  • Improving access to quality health care and health education to all families
  • Provide states with the flexibility to cover more immigrant children
  • Provide options to states to serve more youth aging out of Foster Care

To download our one-page statement on SCHIP, click here.

To download our issue brief on Uninsured Children, click here.

To download our fact sheet on the Medicaid citizenship documentation requirement, click here.