State Children's Health Insurance Program (SCHIP)   The State Children's Health Insurance Program (SCHIP) was created by the Balanced Budget Act of 1997, enacted Title XXI of the Social Security Act, and has allocated about $20 billion over 10 years to help states insure low-income children who are ineligible for Medicaid but cannot afford private insurance.  States receive an enhanced federal match (greater than the state's Medicaid match) to provide for this coverage.  Each state is entitled to a specific allotment of federal funds each year.  States are allowed three years to spend their allotments.  After three years, Title XXI provides that all remaining funds be reallocated to states that have used up their allotments. CMS August 17, 2007 letter to state health officials CMS May 7, 2008 clarifying letter to state health officials SCHIP reauthorizations resources August 17, 2007 CMS Directive to State Health Officials The Centers for Medicare and Medicaid Services (CMS) recently provided clarification to state health officials concerning how CMS plans to apply existing statutory and regulatory requirements when reviewing state requests to extend eligibility under State Children's Health Insurance Programs (SCHIP) to children in families with incomes above 250 percent of the federal poverty level (FPL). The letter to officials dated August 17th, 2007, sites regulations at 42 C.F.R. 457.805 which state: "§ 457.805 State plan requirement: Procedures to address substitution under group health plans. The State plan must include a description of reasonable procedures to ensure that health benefits coverage provided under the State plan does not substitute for coverage provided under group health plans as defined at § 457.10." The letter indicates that CMS expects states to include certain strategies in their procedures to prevent SCHIP substitution for coverage under group health plans. The letter outlines these strategies and specifies CMS' expectation of their use by states wishing to expand their SCHIP eligibility above 250 percent of the FPL. The letter provides additional detail to these original strategies including certain cost sharing requirements, the establishment of a one year period of being uninsured prior to receiving coverage, and verification of potential coverage provided by a non-custodial parent. CMS expects states to amend their state plans in accordance with this review strategy within 12 months of this notification.   May 7, 2008 CMS Clarifying Letter to State Health Officials The Centers for Medicare and Medicaid Services (CMS) sent a letter to state health officials on May 7 to clarify the August 17 directive.  In response to concerns expressed by states that they would not be able to achieve the requirement that 95 percent of the children in their state living in families with incomes at or below 200 percent of the federal poverty guidelines were insured through public or private programs before they may enroll children in families with incomes above 250 percent, CMS stated, "This is an achievable goal and based on conversations with states, we are convinced that a number of states have already reached this goal."  The letter says that states may use a variety of approaches to prove compliance, including state-specific survey data or Current Population Survey (CPS) data. The letter also clarifies that states are not expected to apply new crowd-out procedures to current enrollees ("These children are grandfathered into the State's current coverage and cost sharing levels, as long as they remain continuously enrolled in the program."), children in families with incomes at or below 250 percent of federal poverty guidelines, children whose enrollment costs are paid exclusively with state dollars, and unborn children.     If you have any questions concerning this information please contact Joy Johnson Wilson at 202-624-8689. Resources Answers to Frequently Asked Questions on SCHIP National Conference of State Legislatures, February 2007 Legal Review of the CMS "Crowd-Out" Clarification Letter August 17, 2007 National Conference of State Legislatures At Least Nine of 17 States With SCHIP Income Eligibility Thresholds Above 250% of Federal Poverty Level Will Meet Federal Enrollment Guidelines for Expanding Coverage, CMS Says Kaiser Family Foundation, Daily Health Policy Report, April 10, 2008 Congressional Budget Office testimony from the hearing is available online. Moving Backward: Status Report on the Impact of the August 17 SCHIP Directive to Impose New Limits on States' Ability to Cover Uninsured Children Center for Children and Families, Georgetown University Health Policy Institute, December 2007 SCHIP REAUTHORIZATION RESOURCES SCHIP continues to receive considerable attention at the state and federal levels. In August of 2007, the House passed HR 3162 and the Senated passed S 1893.  In September, Congress passed compromise legislation (HR 976) to reauthorize the SCHIP program, which expired on September 30, 2007.  The President vetoed this compromise bill on October 3, 2007.  The House failed to override the President's veto of this bill on October 18, 2007.  HR 3963, a slightly revised version of HR 976, was introduced on the House floor on October 25, 2007.   The revised bill would have:  (1) set the top income limit to 300 percent of the federal poverty level; (2) clarify and emphasize that illegal immigrants are not eligibility for coverage; and (3) phase-out adult coverage, except for pregnant women, in one year instead of two (click here for a fact sheet authored by House Leadership).  This revised bill passed, but President Bush vetoed it on December 12, 2007.  President Bush signed legislation (S 2499) that would extend SCHIP on December 29, 2007, after twice denying attempts to expand its reach. The extension of the State Children's Health Insurance Program (SCHIP) should provide states with funds to cover those enrolled through March 2009. Resources NOTE: NCSL provides links to other Web sites for information purposes only. Providing these links does not necessarily indicate NCSL's support or endorsement of the site. The Congressional Research Service's report on HR 976, including where state allotments stand. Senate Majority Leader Harry Reid of Nevada made the following statement on October 3, 2007 after President Bush vetoed the Children’s Health Insurance Program Reauthorization Act of 2007. House Republican Leader John Boehner (R-OH) issued the following statement on October 3, 2007 supporting President Bush’s veto of a Democratic bill to reauthorize the State Children’s Health Insurance Program (SCHIP) CMS Projected FY2008 Allotments Under Compromise Proposal, Compared to Allotment Projected Under Current-Law Baseline The Congressional Budget Office (CBO) and the Joint Committee on Taxation have prepared a cost estimate and estimate of changes in health insurance coverage for the amendments to Senate amendments to H.R. 976, the Children’s Health Insurance Program Reauthorization Act of 2007, as reported by the House Committee on Rules on September 24, 2007. NCSL Analysis of SCHIP Reauthorization Proposals The Congressional Research Service (CRS) has recently published an analysis of the two bills under consideration in the House (H.R. 3162) and Senate (S. 1893/H.R. 976) to re-authorize the State Children's Health Insurance Program (SCHIP).  This side-by-side comparison (prepared by the Congressional Research Service) provides a brief description of current law and the changes that would be made to Medicaid and SCHIP under these measures. Medicare provisions in Titles II through VII of H.R. 3162 are not described here. CRS REPORT TO CONGRESS: The Cigarette Tax Increase to Finance SCHIP In order to finance re-authorization of the State Children's Health Insurance Program (SCHIP), Congress has been considering a variety of mechanisms which will provide the necessary revenue. The Senate Budget Resolution, S. Con. Res. 21, 110th Congress, proposes to raise the federal cigarette tax to pay for SCHIP re-authorization. The measure makes the increase possible but does not mandate the change nor does it set a level for the increase. The Congressional Research Service (CRS) has recently released a report of their analysis of the proposal along with a report of the current taxes and basic issues surrounding a tax increase. Additional Resources Answers to Frequently Asked Questions on SCHIP National Conference of State Legislatures, February 2007 ABCs of The State Children's Health Insurance Program (SCHIP) National Conference of State Legislatures, 2007 Highlights FY 2009 Administration Budget Request: Selected Health Programs-In Brief National Conference of State Legislatures, February 2008 FY 2009 Federal Budget - Legislative and Regulatory Proposal: Medicaid, SCHIP, and Medicare National Conference of State Legislatures, February 2008 SCHIP Funding in the Year Ahead: Implications of the Medicare, Medicaid and SCHIP Extension Act Center for Children and Families, Georgetown University Health Policy Institute, March 2008 The Failure of SCHIP Reauthorization:  What Next? Urban Institute, March 2008 Reports by Kaiser Family Foundation's Commission on Medicaid and Uninsured (KCMU) New reports indicate that states promoted broader coverage for children in 2007, but report that a declining economy coupled with lack of SCHIP reauthorization and new federal rules now compromise efforts to reduce the number of uninsured Kaiser Family Foundation, January 2008 The State Children's Health Insurance Program Congressional Budget Office Report, May 2007 Children's Coverage and the SCHIP Reauthorization Kaiser Family Foundation The State Children's Health Insurance Program: Past, Present, and Future; Commonwealth Fund, January 2007 SCHIP Covering More Kids in 2007, New CMS Data Show CMS Press Release, March 12, 2008   2007 - 2008 Health Committee Policy Positions State Children's Health Insurance Program Reauthorization NCSL Letter To House Energy and Commerce Subcommittee on Health Regarding SCHIP NCSL Letter to the Senate Finance Committee Concerning SCHIP Reauthorization This site is made possible by project, MCU 1 H03 MC 00017, from the Maternal and Child Health Bureau (Title V, Social Security Act), Health Resources and Services Administration, U.S. Department of Health and Human Services.

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