The State Children's Health Insurance Program, known as SCHIP, was legislation designed to provide health insurance to children from low-income families who were not eligible for Medicaid. Since the inception of SCHIP, several million children have gained health insurance, but millions still remain uninsured, and the program has not been without its problems.
Origin
The State Children's Health Insurance Program was formed as part of the Balanced Budget Act of 1997 and became title XXI of the Social Security Act. The program was initially designed to last 10 years, and the federal government designated about $40 billion to finance it.
Function
States were allowed to choose from several options when implementing SCHIP. They could either create a separate program for it, make SCHIP a part of the state's Medicaid plan or create a combination of the two.
Eligibility
To be eligible, a child had to be 18 years or younger and live in a family whose earnings were too high to qualify for Medicaid. Each state set its own eligibility requirements, but all requirements were based on the federal poverty level, which was $17,170 in 2007. In 2006, most states set the maximum household earnings to be eligible for SCHIP at 200 percent of the poverty level, but overall the maximum ranged from 140 to 350 percent of the poverty level, according to the Congressional Budget Office. Some states opted to cover some adults with SCHIP, including parents and legal guardians, pregnant women and even adults without children.
Considerations
While SCHIP provided insurance to millions of children who had been without insurance, the Congressional Budget Office reports that eligible families that once had private insurance through employers opted to switch to SCHIP because it was more affordable or provided better coverage. The Congressional Budget Office voiced concerns that the reduction in private health plans might make employers less likely to offer them to their workers.
Controversy
When it came time to renew SCHIP in 2007, Congress twice voted to expand the program in an effort to insure 10 million children, at a cost of approximately $65 million over five years. Some legislators wanted to fund the increase by raising the federal tax on cigarettes, but others felt that the price spike might cause people to quit smoking, leaving the program without funding. Both times, President George W. Bush vetoed the plan. However, Bush signed legislation extending SCHIP without expansion through March 2009.
Renewal
SCHIP was reauthorized by President Obama in 2009 through the Children's Health Insurance Program Reauthorization Act of 2009, and the program dropped the "S" and became known as CHIP. The program will run through 2013, and is largely the same program that failed to pass in 2007. The 2009 SCHIP bill also extends coverage to legal immigrants.
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