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State Children's Health Insurance Program (SCHIP)
At Issue
The State Children's Health Insurance Program (SCHIP) began in 1997. Also know as Title XXI, SCHIP was part of the Federal Balanced Budget Act of 1997. SCHIP provides a capped amount of funds to states on a matching basis for federal fiscal years (FY) 1008 through 2007 to provide coverage to low-income uninsured children. SCHIP represents the most comprehensive federal effort to ensure health insurance coverage of children since the creation of Medicaid. Since the states have several options as to how they can develop programs to provide coverage to the children in their states, different parts of the country have been more successful than others in reaching out to low-income kids.
SCHIP will expire on September 30, 2007 unless it is reauthorized by Congress. The program enjoys wide bipartisan support but there are differences of opinion regarding the reauthorization. Some members of Congress would like to expand the program. Among the policy changes under consideration include formally allowing adults into the program, changing the program from a block grant to an entitlement and raising the eligibility criteria.
Actual 2007 Sponsored Plan Costs - The health insurance premium rates real employer-clients currently pay to cover dependent children under their employer-sponsored health insurance plans.SCHIP Reauthorization Compromise Improves Premium Assistance For Employer-Sponsored Coverage - Press release
NAHU's Position
SCHIP has certainly helped many American children; however, the program could be modified. SCHIP cannot be considered the sole solution to the problem of the uninsured. NAHU is concerned about the challenges various state programs have encountered in enrolling eligible children, as well as regulatory barriers for states and problems with crowd-out. NAHU believes that a great opportunity exists to improve SCHIP's current public/private partnership structure in order to cover low-income uninsured children more cost-effectively. During the reauthorization process, NAHU has been focusing our efforts on improvements to SCHIP's premium assistance provisions in order to allow more families to be covered together under private employer-sponsored plans.
NAHU Supports:
Premium Assistance
Read NAHU's analysis of current state subsidy programs here. Under a premium assistance program, SCHIP funds subsidize a child's portion of an employer-sponsored health insurance premium.
Many parents of SCHIP-eligible children have access to employer-sponsored health insurance coverage but cannot afford their portion of the dependent premiums. Some of these parents enroll their children in SCHIP, but many do not; many children remain uninsured.
The original SCHIP legislation included an option for states to utilize premium assistance if the employer coverage met certain requirements. The current rules, however, are so onerous that only nine states have attempted to implement premium-assistance programs. NAHU would like the process for states to voluntarily use SCHIP dollars to subsidize employer-sponsored coverage made simpler. NAHU has developed very specific legislative recommendations as to how the existing law can be modified to make premium assistance a workable reality. NAHU supports SCHIP legislation that reduces the difficulties states and employers encounter when attempting to implement premium assistance.Doing so would have the following benefits:
The block-grant financing structure of SCHIP has allowed beneficial state program innovations that include cost-saving partnerships with the private insurance market. An open-ended entitlement program would cause states to lose the innovative methods conceived and implemented on the state level. NAHU continues to support the block-grant financing structure of SCHIP and also supports other reasonable financing measures. For example, a moderate increase in the federal excise tax on tobacco products would help provide the funds necessary to insure children, as well as encourage healthy behaviors. NAHU Opposes:
Expansion of SCHIP
NAHU opposes expansion of SCHIP to cover parents or other adults beyond those adults incidentally covered through premium assistance. Expansions of coverage to parents and other adults clearly go beyond the legislation's original intent of helping low-income children. NAHU also opposes efforts to expand SCHIP eligibility to children whose family incomes vastly exceed the 200 percent of the Federal Poverty Level outlined when SCHIP was created. One of the key problems associated with dramatic expansion of publicly-sponsored health coverage assistance programs like SCHIP is the substitution of public program coverage for private health insurance coverage. Expanding SCHIP beyond the intended core population would only exacerbate this problem of crowd-out. NAHU would strongly oppose any attempt to finance an SCHIP expansion through cuts to the Medicare Advantage program, which provides affordable private health care choices to millions of senior citizens. Improvements need to be made to SCHIP to benefit children and working families, but such improvements should not be made at the expense of our nation's senior population.
NAHU's Action
In an effort to advance premium assistance improvements in SCHIP, NAHU has developed a number of tools for lawmakers.
Additionally, while HR 976 included many provisions that would have improved premium assistance, NAHU also has prepared a detailed list of how future SCHIP reauthorization legislation can go above and beyond the original proposed improvements.
Ms. Trautwein also provided a statement to the House Committee on Energy and Commerce's February 14, 2007 hearing on "Covering the Uninsured Through the Eyes of the Child."
Additionally, she provided a statement to the House Committee on Education and Labor Subcommittee on Health, Labor and Pensions Regarding Examining Innovative Approaches to Covering the Uninsured Through Employer-Provided Health Benefits on March 21, 2007; click here for this statement.Legislative Action
Initial federal funding for SCHIP expired on September 30, 2007. As a result, Congress spent a great deal of time during 2007 crafting reauthorization legislation to further fund, expand, and improve upon SCHIP. In July of 2007 both the House and the Senate passed separate versions of SCHIP reauthorization legislation. The House legislation, HR 3162, was passed on a party-line vote, and in contrast to the Senate approved bipartisan legislation, HR 976, which passed the Senate with a veto-proof majority. The Senate version of the SCHIP legislation included extensive improvements to the private-market premium assistance component of SCHIP, supported by NAHU. Eventually, the full House agreed to pass a variation of the Senate-approved legislation, HR 976; however, this bill passed by smaller margins in the House and was vetoed by President Bush. Funding for SCHIP was temporarily extended during the fall of 2007, as Congress attempted and failed to override the veto of HR 976 in the House. Both chambers again passed a modified version of the original Senate-passed legislation, HR 3963, in November and December of 2007, but President Bush vetoed the legislation. Unable to come to a long-term agreement on reauthorization terms, Congress agreed to a 15-month short-term reauthorization at the end of December 2007. The current reauthorization bill extends funding for the program at FY 2007 levels through March 31, 2009, and does not in any way change the program's structure. Although the reauthorization extends into next year, a number of states will be unable to fully fund their existing programs for of the entire year of 2008 operating only on FY 2007 funding levels. NAHU hopes to see Congress continue to work on a compromise, and create full-scale reauthorization legislation in 2008. Read President Bush's statement on SCHIP here.For more information, please contact the Government Relations Department at NAHU at legislative@nahu.org.
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