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State Children's Health Insurance Program (SCHIP): An Overview

Wednesday, October 17, 2007 7:46 PM

Frequently Asked Questions about the State Children's Health Insurance Program (SCHIP)

Q: How does the program work and who does it cover now?

A: The $5 billion-a-year program was created 10 years ago with the goal of covering children from families with annual incomes at or below about twice the poverty level, or $41,300 for a family of four. The target population is children whose parents earn too much to qualify for Medicaid but not enough to afford private insurance on their own.

Currently, 18 states and the District of Columbia have eligibility levels above 200 percent of the poverty level. New Jersey is the highest at 350 percent. No other state is above 300 percent.

About 6.6 million children and 671,000 adults received health coverage through SCHIP in 2006, according to the Congressional Budget Office (CBO).

About 83 percent of those enrolled were children at or below 200 percent of the poverty level, and another 9 percent were low income adults, according to the Congressional Research Service (CRS). The remaining 8 percent were children from families with incomes above twice the poverty level.

Q: How many children are eligible, but not enrolled?

A: About 5.4 million uninsured children are eligible for coverage under SCHIP or Medicaid, the federal health insurance program for the poor, according to an analysis of Census data by the Urban Institute. Of those, 1.7 million are eligible for SCHIP and 3.7 million for Medicaid.

About 90 percent of children who are eligible but still uninsured are from families with incomes below twice the poverty level. Some eligible families have incomes above twice the poverty level because some state SCHIP programs have income limits above 200 percent.

Q: Who would be covered under the bill approved by Congress and vetoed by President Bush?

A: Under the bill, states could receive the full federal matching rate to cover children from families earning as much as three times the poverty level, or $61,950 for a family of four. States seeking to cover families with higher incomes would receive a less favorable federal matching rate. In either case, states would have to receive approval from the Bush administration to raise their eligibility levels that high.

About 70 percent of those who gain or retain coverage under the bill would be from families earning less than 200 percent of the poverty level, according to an analysis by the Urban Institute. The analysis includes an assumption that some states would raise eligibility levels.

Q: How much additional money, on top of the $5 billion-a-year baseline funding, is needed to preserve the same size program over the next five years?

A: Keeping the program at current levels would require expanding funding by about $13.4 billion over five years, for total funding of $38.4 billion between 2008 to 2012, according to a CBO report in May. Part of the reason is rising medical costs. President Bush has proposed a $5 billion expansion, for total program funding of $30 billion over the next five years. He has said he might be willing to go higher. The bill Bush vetoed would increase funding by $35 billion over the five years, for a program total of $60 billion. Ultimately, it would cover 10 million people.

Q: What about adults?

A: About 671,000 adults were enrolled in SCHIP in 2006, according to the CBO.

Under the bill, states would have to transition childless adults to Medicaid. The 11 states that cover parents on their SCHIP programs could continue to do so for two or three more years. After that, those states could continue covering parents only if the states first meet certain benchmarks for covering children. No other states could decide to start covering parents. Pregnant women would remain eligible for coverage.

Q: Does the bill cover children from families earning as much as $83,000 a year, as President Bush contends?

A: No. New York recently asked the Department of Health and Human Services for permission to cover children from families earning as much as 400 percent of poverty -- $82,600 for a family of four. But HHS turned New York down. The White House argues that a future administration could grant the request if New York asks again.

Q. How many children are uninsured in America ?

A: There are about 9.4 million uninsured children age 18 and under, according to Census data.

Sources: Congressional Budget Office, Congressional Research Service, The Urban Institute, congressional aides.

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