State Children's Health Insurance Program

From Wikipedia, the free encyclopedia

The State Children’s Health Insurance Program (SCHIP) is a United States federal government program that gives funds to states in order to provide health insurance to families with children. The program was designed to cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid.

At its creation in 1997, SCHIP was the largest expansion of health insurance coverage for children in the U.S. since Medicaid began in the 1960s. The statutory authority for SCHIP is under title XXI of the Social Security Act. It was sponsored by Senator Ted Kennedy in a partnership with Senator Orrin Hatch^[1] with support coming from First Lady Hillary Rodham Clinton during the Clinton administration.^[2][3][4]

States are given flexibility in designing their SCHIP eligibility requirements and policies within broad federal guidelines. Some states have received authority through waivers of statutory provisions to use SCHIP funds to cover the parents of children receiving benefits from both SCHIP and Medicaid, pregnant women, and other adults. SCHIP covered 6.6 million children and 670,000 adults at some point during Federal fiscal year 2006, and every state has an approved plan.^[5] However, the program is already facing funding shortfalls in several states.^[6] Attempts to expand funding for the program have met with political controversy amidst studies that debate the program's fiscal impacts. Two proposals passed by the Congress in 2007 to reauthorize and expand SCHIP from an average of $5 billion yearly to approximately $12 billion yearly over the next five years were vetoed by President George W. Bush.^[7][8][9] At the end of 2007, President Bush signed an extension of the program to cover current enrollment levels through March 2009.^[10]

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 in families whose incomes were 200 percent of the federal poverty level or higher.^[11]

Contents 1 History of original legislation 2 Federal dollars with state administration 3 Debate over impacts 4 2007 reauthorization bills 4.1 HR 976 4.2 HR 3963 4.3 HR 3584 5 See also 6 References 7 External links

[edit] History of original legislation

As a part of the fallout from the failed 1993 Clinton health care plan, both Democratic Senator Ted Kennedy and the Clinton administration were looking for smaller health care initiatives that could gain bipartisan support.^[2]

Kennedy was intrigued by a children's health insurance plan in Massachusetts that had passed in 1996, and met with a Boston Medical Center pediatrics director and a Massachusetts state legislator to discuss the feasibility of a national initiative.^[12] Kennedy also saw using an increase in tobacco taxes as a way to pay for the expanded coverage.^[12] Thus, in October 1996, Kennedy introduced a bill to provide health care coverage for children of the working poor, to be financed via a 75 cents a pack cigarette tax increase.^[3]

Meanwhile, in December 1996 First Lady Hillary Rodham Clinton examined several possible such initiatives and decided expanding health care insurance to children who had none was the one to advance,^[2] especially as its focus on children would be politically popular.^[3] (Indeed, a different variant of this approach, dubbed "Kids First", had been envisioned as a backup plan during original 1993 Task Force on National Health Care Reform meetings, as a way of gradually implementing universal health care,^[13][4] and Hillary Clinton had discussed an SCHIP-ish program with a White House health policy coordinator during the time her full-blown health care plan had suffered political failure.^[14] )

The new initiative was proposed at Bill Clinton's January 1997 State of the Union address, with the stated goal of coverage up to five million children.^[2][3] Kennedy continued to write much of the bill, using the increase in tobacco taxes to pay the $20 billion price tag.^[1] In March 1997, Kennedy brought Republican Senator Orrin Hatch onto the legislation as co-sponsor; Kennedy and Hatch had worked together as an "odd couple" in the Senate before, and here Hatch said that "Children are being terribly hurt and perhaps scarred for the rest of their lives" and that "as a nation, as a society, we have a moral responsibility" to provide coverage.^[1] Hatch's role would infuriate some Republican colleagues^[15][16] and conservative commentators.^[17] The First Lady did not hold news conferences or testify before Congress on behalf of the bill.^[14]

An initial objection of Republicans in the Senate was that raising the federal tax on cigarettes, from 24 cents a pack to 67 cents a pack, would result in less smoking and less revenues from the tax to states.^[18] Kennedy and Hatch scoffed at the objection, with the former saying, "If we can keep people healthy and stop them from dying, I think most Americans would say 'Amen; isn't that a great result?' If fewer people smoke, states will save far more in lower health costs than they will lose in revenues from the cigarette tax."^[18] Republicans also criticized the bill as an open-ended entitlement program, although it was structured as a block grant rather than an entitlement;^[18] Senate Majority Leader Trent Lott was an early opponent of the measure, calling it a "big-government program" that would not pass.^[15]

Then the bill had to comply with the existing balanced budget agreement between Congress and the White House, something that Lott said it did not.^[2] Pressure was on to reduce the amount of grants involved, with $16 billion a possible compromise; Hillary Clinton instead argued for $24 billion.^[2][4] The Clinton administration had a deal with the Republican leadership in Congress that forbade the administration from backing any amendments to the budget resolution.^[12] Thus, Bill Clinton phoned members of Congress and asked that they kill the children's health insurance provision when it came to the floor.^[2] On May 22, it was so done, with the necessary cigarette tax amendment defeated by a 55–45 margin.^[19] Hillary Clinton defended her husband's action at the time, saying "He had to safeguard the overall budget proposal,"^[2] but Kennedy was surprised and angered by it,^[12] considering it a betrayal,^[3] and saying that his calls to Bill Clinton and Vice President Al Gore had not been returned.^[19] Hatch was also upset, saying that Lott may have been bluffing and that, "I think the President and the people in the White House caved here."^[19]

Kennedy did not give up on the measure, saying: "We shall offer it again and again until we prevail. It's more important to protect children than to protect the tobacco industry."^[19] Both Bill and Hillary Clinton argued for including the children's health insurance in subsequent legislation.^[12] The bill was indeed revived by Kennedy and Hatch a month after its initial defeat.^[3] Organizations from the Children's Defense Fund to the Girl Scouts of the USA lobbied for its passage, putting public pressure on Congress;^[3] Hillary Clinton was pushing for it as well,^[2] with Kennedy urging her to use her influence within the White House.^[3] SCHIP was then passed and signed into law by Bill Clinton on August 5, 1997^[2] as part of the Balanced Budget Act of 1997, to take effect the following month.^[20] At a press conference following the signing, Kennedy thanked Hatch, Senate Majority Leader Tom Daschle, Children's Defense Fund head Marian Wright Edelman, Bill Clinton, and Hillary Clinton.^[4] About the latter, Kennedy said, "Mrs. Clinton ... was of invaluable help, both in the fashioning and the shaping of the program and also as a clear advocate."^[3][21]

SCHIP is located at Title IV, subtitle J of H.R. 2015 [105th] Balanced Budget Act of 1997. H.R. 2015 was introduced and sponsored by Rep John Kasich [R-OH] with no cosponsors. ^[22] On 25 June 1997, H.R. 2015 passed House Vote Roll #241 mainly among partisan lines, 270 ayes and 162 nays, with most Democrats in the House of Representatives in opposition. On the same day, the bill passed in the Senate by unanimous consent. After further resolution of the bill, passage in both House (Roll #345) and Senate (Roll #209) became more bipartisan.

[edit] 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.

By February 1999, 47 states had set up SCHIP programs, but it took effort to get children enrolled.^[4] That month, the Clinton administration launched the "Insure Kids Now" campaign, designed to get more children enrolled;^[23] the campaign would fall under the aegis of the Health Resources and Services Administration. By April 1999, some 1 million children had been enrolled, and the Clinton administration set a goal of raising the figure to 2.5 million by 2000.^[24]

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 employ 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. Out of 50 state governors, 43 support SCHIP renewal.^[25]

In Ohio, SCHIP funds are used to expand eligibility for the state's Medicaid program. Thus 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. 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).

In August 2007, the Bush Administration announced a rule requiring states (as of August 2008) to sign up 95% of families with children, earning 200% of the federal poverty level, before using the funds to serve families earning more than 250% of the federal poverty level. The federal government said that 9 out the 17 states that offer benefits to higher-earning families were already compliant. Opponents of this rule argued that signing up higher-income families makes lower-income families more likely to sign up, and that the rule was incompassionate toward children who would otherwise go without medical insurance.^[26]

[edit] Debate over impacts

SCHIP has cost the federal government $40 billion over its first 10 years, and the debate over its fiscal impacts reflects the larger debate in the U.S. over the government's role in health care.

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.^[27] The conclusion of the study is that an attempt to cut the costs of a state healthcare program could create a false savings because other government organizations pick up the tab for the children who lose insurance coverage and later need care.

Detractors of the program focus on the impact to the private health insurance industry. 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 at lower cost to enrollees than the private alternatives.^[5] A briefing paper by libertarian think-tank Cato Institute estimated the "crowding out" of private insurers by the public program could be as much as 60%.^[28]

[edit] 2007 reauthorization bills

[edit] HR 976

In 2007, both houses of Congress passed a bipartisan measure to expand the SCHIP program, H.R. 976. The measure would have expanded coverage to over 4 million more participants by 2012, while phasing out most state expansions in the program that include any adults other than pregnant women. The bill called for a budget increase for five years totaling $35 billion, increasing total SCHIP spending to $60 billion for the five-year period. Opposition to HR 976 focused on the $35 billion increase in government health insurance as well as $6.5 billion in Medicaid benefits to illegal immigrants. Originally intended to provide health care coverage to low-income children, HR 976 was criticized as a tax and spend giveaway that would have benefited adults as well as non-U.S. citizens.^[29] Opponents pointed out that SCHIP claimed to cover children, but in reality hundreds of thousands of adults got coverage while many children remained uninsured.^[30] 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,^[31][32] FactCheck.org has noted that this eligibility was already possible under the old program and was not required by the new bill.^[33] The expansion of the SCHIP program was to have been funded by increasing the federal excise tax 6000% on cigars, 700% on rolling tobacco, and 160% on cigarettes, rolling papers, cigarette tubes, snuff, chewing tobacco, and pipe tobacco^[34]

On October 3, 2007, President Bush vetoed the bill,^[35] stating that he believed it would "federalize health care", expanding the scope of SCHIP much farther than its original intent.^[8][36] The veto was the fourth of his administration.^[8] After his veto, Bush said he was open to a compromise that would entail more than the $5 billion originally budgeted, but would not agree to any proposal drastically expanding the number of children eligible for coverage.^[37]

On October 18, 2007, the House of Representatives fell 13 votes short (273-156) of the two-thirds majority required to override the president's veto, although 44 Republicans joined 229 Democrats in supporting the measure.^[38]

[edit] HR 3963

Within a week of the failed veto override vote, the House passed a second bill attempting a similar expansion of SCHIP. According to Democrats, the second bill, H.R. 3963, created firmer caps on income eligibility, prevented adults from joining, and banned children of illegal immigrants from receiving benefits. The Senate passed the measure on November 1,2007, but on December 12, 2007, Bush vetoed this bill as well, saying it was "essentially identical" to the earlier legislation.^[39] Members of Congress added to HR 3963 two provisions that would enable students to receive contraceptive services through schools without parental notification, and would prohibit doctors and schools from informing the children's parents. ^[40] In effect, where Medicaid becomes the vehicle for state SCHIP coverage, HR 3963 would have made it easier for children to obtain contraceptives and safely engage in sexual behavior. While, by itself, SCHIP allows states to fund sexual health services for teens, HR 3963 would have gone even further and require such funding. ^[41] The HR 3963 proposal of SCHIP expansion of Medicaid into the middle class would have been to take what is already the federal government's largest source of family planning funds and inviting even more children to join--400,000 more, according to the Congressional Budget Office estimate. ^[42][43]

[edit] HR 3584

Opponents of elements in HR 976 who wished to continue the program proposed the SCHIP Extension Act of 2007, HR 3584, to reauthorize and fully fund the existing program for an additional 18 months. Motion for HR 3963 was delayed by the pushes for HR 976 and HR 3963. HR 3584 was finally passed and signed by President Bush on December 21, 2007. HR 3584 extended funding for the State Children’s Health Insurance Program for 18 months so that Congress could work out a reasonable compromise.

[edit] See also

• TexCare
• Graeme Frost
• Health insurance in the United States

[edit] References

[edit] External links

• SCHIP at the Center for Medical and Medicare Services
• United States Social Security Administration
• Heritage Foundation's SCHIP-related research
• EasterSeals.com's coverage of SCHIP
• Kaiser Family Foundation resources on SCHIP