The $7 billion State Children’s Health Insurance Program (SCHIP) is up for reauthorization in Congress this year. SCHIP, which began in October 1997, now covers over four million Americans, primarily children in families with incomes too high to qualify for Medicaid but too low to afford commercial health insurance coverage.
Popular with both Democrats and Republicans, SCHIP is certain to be reauthorized by Congress. However, members of Congress differ on whether and to what extent SCHIP should be expanded, how much to increase federal funding, whether SCHIP should be reserved for truly low income children or open to more moderate income families, and whether SCHIP should be used as a vehicle to expand coverage to uninsured workers. In addition, there remain serious questions about how much taxpayer-funded SCHIP has crowded out employer-sponsored coverage.
The policy issues and design options are many. Ultimately, the battle over SCHIP is a microcosm of the larger national debate on what government can or should do about the uninsured, the role of individual and employer responsibility, what is “affordable”, what is an adequate package of covered benefits, and much more.
Overview of SCHIP:
Each state, within broad federal guidelines, determines the design of its own program, including eligibility, benefit design, cost sharing, and operating procedures. States may operate SCHIP separately or in conjunction with Medicaid. SCHIP benefits are delivered primarily through health plans under contract with states.
On a federal level, SCHIP is governed by Title XXI of the Social Security Act. However, several states have requested and received Section 1115 waivers to redesign the SCHIP eligibility, cost sharing, and/or benefits.
Unlike Medicaid, which is largely an open-ended entitlement, states may cap SCHIP enrollment and federal funds for SCHIP are capped. This year, unless Congress increases aggregate federal funds for SCHIP, about 16 states may need to either cap enrollment or appropriate additional state funds to maintain the program.
Budget Challenge of Funding Children’s Health Coverage:
The best guess is Congress will need to increase the federal cap on SCHIP funding by $12 billion to $15 billion over the next five years to maintain coverage for the four million now enrolled. (During the year, about six million receive coverage at some point and about four million are covered at any given point in time.) Absent either a big increase in the federal cap or a big jump in state-only appropriations to SCHIP, about one million kids will lose coverage.
Resources to Understand SCHIP:
Here are several excellent resources to better understand the State Children’s Health Insurance Program:
- Fact Sheet on SCHIP: How it’s administered and financed, who is eligible, and what services are covered. Crisp two-pager from KFF.
- SCHIP’s Financing Structure: Here’s a great four-page primer on how the State Children’s Health Insurance Program is financed. From Georgetown University’s Health Policy Institute.
- A Decade of SCHIP Experience and Issues for Reauthorization: This KFF report highlights lessons learned since 1997 and key issues for SCHIP reauthorization.
- SCHIP: Past, Present, and Future: This outstanding paper “reviews the program’s history and design, describes its present challenges and successes, assesses issues Congress is likely to consider during reauthorization, and explores future policy options including potential changes in eligibility and financing.” By Jeanne M. Lambrew, Ph.D., an associate professor of health policy at George Washington University.
- State Experiences in Implementing SCHIP and Considerations for Reauthorization: Comprehensive analysis by GAO, with lots of useful background information.
- Coverage Patterns among SCHIP-Eligible Children and Their Parents: This informative Urban Institute paper tackles three critically important questions, namely, (1) how many children remain uninsured, (2) how many SCHIP-enrolled children have access to employer-sponsored commercial health insurance coverage, and (3) how many SCHIP enrollees have uninsured parents.