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Home > Advocacy > CWLA 2008 Children's Legislative Agenda > State Children's Health Insurance Program (SCHIP)


CWLA 2008 Children's Legislative Agenda

State Children's Health Insurance Program (SCHIP)

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  • Reauthorize and strengthen the State Children's Health Insurance Program (SCHIP or   CHIP)

  • Ensure SCHIP programs have sufficient funds to, at a minimum, maintain current enrollment.


Ensuring the safety and well-being of children and families involved in the child welfare system is impossible without working on the shortcomings of our nation's health care system. Accessible, affordable, comprehensive, quality health insurance coverage for all children and their families through Medicaid, SCHIP, or private insurance can address or alleviate issues that prevent children from ever needing the child welfare system in the first place. The availability and receipt of such health services can also help families remain intact, aid family reunification efforts, or simply make individuals healthier and, thus, more likely to reach their fullest potential.
Although Medicaid coverage is available to almost all children in foster care, SCHIP has successfully broadened health coverage for low-income children and families- namely at-risk families and children transitioning out of foster care. Enacted in a bipartisan fashion as part of the Balanced Budget Act of 1997, SCHIP provides much needed health insurance to more than 6 million children whose families earn too much to qualify for Medicaid and those who are either not offered or cannot afford private coverage. 1 Each state has a SCHIP program that operates in three ways: as an extension of Medicaid, as a separate, stand-alone state SCHIP program, or as a combination of the two. Benefits provided depend on the program's structure and additional discretion afforded to the states. 2 Each As a federal-state partnership, the federal government matches states' SCHIP spending with an enhanced match rate. Unlike Medicaid, however, which is an entitlement program, SCHIP is a capped block grant. As such, a finite amount of federal dollars are available for the program, which is divided and distributed to the states annually, based on a complex formula. 3

Over the past decade, amidst a backdrop of rising health care costs, significant declines in employer-based coverage, and an increase in the number of uninsured Americans, SCHIP has played a valuable role in ensuring access to health care for low-income children. Serving as Medicaid's essential companion, the programs together have effectively reduced the uninsured rate of low-income children by one-third. 4

SCHIP in the 110th Congress

When Congress created SCHIP in 1997, it appropriated approximately $40 billion for the program's first 10 years, necessitating action by and additional funds from Congress to continue SCHIP past 2007. Despite SCHIP's widely hailed success and positive impact on children's health care coverage, the Census Bureau reported that in 2006, 8.7 million children remained uninsured. 5 In fact, since 2004, due in part to scarce funding and restrictive policies such as the newly implemented Medicaid citizenship documentation requirements, the number of children without health insurance has risen by 1 million. 6 Many saw the reauthorization of SCHIP as a historic opportunity to help close these unfortunate gaps by insuring more eligible low-income children and enacting more equitable policies for our nation's young.

In its first session, Congress passed two strong, forward- moving compromise bills that would have reauthorized SCHIP for five years with enough funding to maintain current enrollment and provide health insurance to millions more low-income children-most of whom are already eligible. Among other positives, both bills provided mental health parity in CHIP programs, guaranteed dental benefits, more appropriately calculated allotment formulas to avoid state shortfalls, funding for state outreach and enrollment efforts, and the establishment of a child health quality initiative. The President, citing various points of opposition, vetoed Congress's first reauthorization bill (H.R. 976).

Members of Congress quickly regrouped and produced another bipartisan compromise bill that addressed areas of concern by strengthening SCHIP's focus on low-income children, ensuring that only citizen children are enrolled in SCHIP and Medicaid, and vigorously protecting against the substitution of employer-sponsored coverage with SCHIP. This legislation (H.R. 3963), too, passed both houses of Congress, but the President again vetoed the bill. This final roadblock occurred despite the fact that 72% of Americans polled support Congress's planned spending increase on SCHIP to provide more children with needed health insurance. 7

In view of the President's intractability, Congress decided to simply extend SCHIP through March 31, 2009, with sufficient funds for states to maintain current enrollment. The Medicare, Medicaid, and SCHIP Extension Act of 2007 (S. 2499) extended the program. While it is immeasurably important that SCHIP lives on and no children lose coverage because of this extension, Congress must reauthorize SCHIP so that the program is strengthened and, at a minimum, reaches more eligible, uninsured children.

In addition, in the immediate future, certain issues that the short-term extension failed to handle must be addressed. Perhaps most critically, the Administration's restrictive policy directive, issued in the form of an August 17, 2007 letter to state health officials, must be halted. Recognizing that states are very differently situated-in terms of costs of living, for example-SCHIP has long afforded states flexibility to uniquely tailor certain aspects of their programs, including the ability to set income eligibility limits. In a sharp departure from that sound policy, however, the August 2007 directive makes it next to impossible for states that are already covering or desire to cover children in families who earn over 250% of the federal poverty level (FPL) to do this, effectively imposing an across-the-board income eligibility cap (250% of FPL is $51,625 for a family of four).

To cover children in families above 250% FPL through CHIP, the directive, among other exceedingly high bars, requires states to prove individuals-in this case, children- have been uninsured for at least an entire year. Such states would also have to show that they have enrolled at least 95% of their children below 200% FPL who are eligible for either CHIP or Medicaid. At least 23 states currently cover children in families above 250% FPL or have enacted state legislation to do so, meaning this successful progress and other planned state progress to cover more uninsured children will stop dead in its tracks. 8 Children, who otherwise would have gained coverage, are the obvious and utterly undeserving victims of this directive and Congress must block full implementation of this harmful policy.

Key Facts

  • In 2006, at least 8.7 million children under age 18 were uninsured. 9

  • Uninsured children are more than 13-times as likely as insured children to lack a usual source of health care and more than three-times as likely not to have seen a doctor in the past year. 10

  • Uninsured children are nearly five-times as likely as insured children to have at least one delayed or unmet health care need. 11

  • Compared to children who were insured a year or more, children who were uninsured part of the year were nearly nine-times as likely to have a delayed or unmet medical need. 12

  • Children involved with the child welfare and foster care systems are at extremely high risk for both physical and mental health issues. For instance, when compared to the general population, children younger than age 6 in out-of-home care have higher rates of respiratory illness (27%), skin problems (21%), anemia (10%), and poor vision (9%). Between 54% and 80% of children in out-ofhome care meet clinical criteria for behavioral problems or psychiatric diagnosis. 13

  • Despite the great need, significant gaps remain to comprehensive, quality health care for children who are either at risk of entering the system or who have come to the child welfare system's attention. In 2001, due to limits on public and private health insurance, inadequate supply of services, and difficulty meeting eligibility requirements, parents placed more than 12,700 children into the child welfare or juvenile justice systems solely to receive necessary mental health services. 14

  • Of Americans polled, 72% supported Congress's planned spending increase on SCHIP in order to provide more children with needed health insurance. 15


  1. Congressional Budget Office (CBO). (2007). The State Children's Health Insurance Program. Available online. Washington, DC: Author. back
  2. Herz, E.J., & Peterson, C.L. (updated July 2006). State Children's Health Insurance Program (SCHIP): A brief overview. Available online. Washington, DC: Congressional Research Service. back
  3. CBO, The State Children's Health Insurance Programback
  4. Georgetown University Health Policy Institute Center for Children and Families. (2006). Too close to turn back: Covering America's children. Available online. Washington, DC: Author. back
  5. DeNavas-Walt, C., Proctor, B.D., & Smith, J. (2007). Income, poverty, and health insurance coverage in the United States: 2006. Available online. Washington, DC: U.S. Census Bureau. back
  6. Center on Budget and Policy Priorities. (2007). More Americans, including more children, now lack health insurance. Available online. Washington, DC: Author. back
  7. Cohen, J., & Balz, D. (2007, October 2). Most in poll want war funding cut. The Washington Post, p. A01. back
  8. Mann, C., & Odeh, M. (2007). Moving backward: Status report on the impact of the August 17 SCHIP directive to impose new limits on states' ability to cover uninsured children. Available online. Washington, DC: Georgetown University Health Policy Institute Center for Children and Families. back
  9. DeNavas-Walt et. al, Income, poverty, and health insurance coverage in the United States: 2006back
  10. Families USA. (2006). No shelter from the storm: America's uninsured children. Available online. Washington, DC: Campaign for Children's Health Care. back
  11. Ibid. back
  12. Ibid. back
  13. Takayama, J.I., Wolfe, E., & Coulter, S. (1998). Relationship between reason for placement and medical findings among children in foster care. Pediatrics, 101, 201-207. back
  14. Clausen, J., Landsverk, J., Ganger, W., Chadwick, D., & Litrownik, A.J. (1998). Mental health problems of children in foster care. Journal of Child and Family Studies, 7, 283-296; Halfon, N., Mendonca, A., & Berkowitz, G. (1995). Health status of children in foster care: The experience of the Center for the Vulnerable Child. Archives of Pediatric and Adolescent Medicine, 149, 386-392; Urquiza, A.J., Wirtz, S.J., Peterson, M.S., & Singer, V.A. (1994). Screening and evaluating abused and neglected children entering protective custody. Child Welfare, 123, 155-171. back
  15. U.S. General Accounting Office (GAO) (2003). Child welfare and juvenile justice: Federal agencies could play stronger role in helping states reduce the number of children placed solely to obtain mental health services (GAO-03-397). Available online. Washington, DC: Author. back
  16. Cohen & Balz, Most in poll want war funding cut. back

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