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Essay on State Children's Health Insurance Program
The Balanced Budget Act of 1997 creates a new program and funding source for states to provide health insurance to children. The purpose of the new State Children’s Health Insurance Program (S-CHIP), enacted as Title XXI of the Social Security Act, is "to provide funds to States to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children.States have a great deal of flexibility in how they design their new S-CHIP programs. One of the first choices states will face is whether to use the new matching funds to expand Medicaid or to develop or expand existing separate child health insurance programs. After providing an overview of the new program, this brief discusses issues states might consider when making this choice.
The S-CHIP program was enacted as a partial response to census data showing that about 10 million children under age 18, or 13.8 percent of children, were uninsured in 1995. The two major sources of coverage for children are employer-sponsored coverage through a parent and Medicaid. In 1995, private coverage, almost all of which is employer-sponsored, reached 66.1 percent of children and Medicaid covered 23.2 percent (some children had both. Medicaid plays a particularly large role for low-income children, covering almost half of all children with family incomes below 200 percent of the federal poverty level (FPL). (The FPL is $13,330 for a family of three in 1997.)
Federal Medicaid law requires that states cover all children through age five in families with income below 133 percent of FPL, and children ages 6 through 13 to 100 percent of FPL. Children ages 14 through 18 must be covered only if they would have been eligible under the old Aid to Families with Dependent Children (AFDC) program rules......
