Five Things Everyone Should Know about SCHIP

No. A-55 in Series, "New Federalism: Issues and Options for States"

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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In August 1997, Congress enacted the State Children's Health Insurance Program (SCHIP), with bipartisan support, as Title XXI of the Social Security Act. SCHIP gives states a higher federal match than Medicaid—that is, a higher federal contribution for every dollar of state funds spent on the program. In contrast to Medicaid, however, SCHIP's federal contribution is not an open-ended entitlement, but is capped (as a block grant) at $40 billion over 10 years.

SCHIP gives states an opportunity to build on the poverty-related expansions initiated under Medicaid in the late 1980s, by expanding coverage to children with family incomes too high to qualify for Medicaid, using Medicaid, a separate program, or some combination of the two. Choosing the option of separate programs allows states more flexibility in program design. Recently, states were also given the opportunity to expand SCHIP coverage to parents using waiver authority.

Five years into SCHIP, qualitative evaluations have provided early positive evidence regarding SCHIP and its operations. We are also seeing reductions in uninsurance among low-income children, particularly those with family incomes of 100 to 200 percent of the federal poverty level (FPL), the income range targeted by SCHIP expansions. While this news is encouraging, it is troubling that over a quarter of all poor children (defined as having family incomes below 100 percent of FPL) remain uninsured and their uninsurance rates do not appear to be dropping. Fully addressing the uninsurance problem among children will depend critically on the availability of both state and federal funds earmarked to address this issue.

This brief discusses five key points about SCHIP as we mark the five-year anniversary of its enactment. The information presented here draws upon research conducted under the Urban Institute's SCHIP evaluation, which is part of the Institute's Assessing the New Federalism project.

Note: This report is available in its entirety in the Portable Document Format (PDF).

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