Reauthorization of the State Children’s Health Insurance Program

by Spencer Lempert In 1997, Congress enacted the State Children’s Health Insurance Program, commonly called SCHIP, to provide health insurance coverage for children of low income families. The program is designed to provide coverage to low-income children whose families earn too much to qualify for coverage under Medicaid. SCHIP is jointly financed by Federal and State governments and administered by the States who determine, subject to broad Federal guidelines, eligibility standards, benefits, payment levels for coverage and other administrative and operating procedures. The Federal government provides block funds to the States, on a matching basis for the fiscal years 1998 through 2007. In most states uninsured children under 19 years old whose families earn up to $36,200 a year (for a family of four) are eligible for insurance under SCHIP. The program covers doctor visits, immunizations, hospitalizations and emergency room visits. Approximately 6 million children were covered by the program in fiscal 2005. Despite coverage under Medicaid and SCHIP approximately 9 million children under 18 were without health insurance according to 2005 census data. SCHIP which is scheduled to expire on September 30, 2007 is up for reauthorization by Congress. Current SCHIP funding is $5 billion annually. The Congressional Budget Office has estimated that for the next five years to maintain current eligibility levels will require an additional $14 billion over the $25 billion baseline. The Senate Finance Committee has proposed a $35 billion increase in funding over the $25 billion baseline through an increase in tobacco taxes. This will allow for an expansion of eligibility for children above the current limit of 200% of the federally designated poverty level to 300%. The House is considering a proposal to expand funding by $50 billion. President Bush has proposed approximately $5 billion in additional funding over 5 years and limiting enrollment to children below 200% of the poverty level. Bush has expressed concern that by expanding eligibility you open up an avenue for people to switch from private insurance to government insurance and therefore promote government-run healthcare. President Bush has threatened to veto a bill that expands SCHIP which would result in the program expiring and leaving 6 million children at risk of being uninsured. For more detailed information on this subject see the Issue Brief prepared by the Henry J. Kaiser Family Foundation at