SCHIP: Where does it stand and what do journalists need to know?

By Jessica Nuñez
Association of Health Care Journalists

Nov. 2 update: President Bush vetoed legislation to reauthorize and expand SCHIP. The House did not have enough votes to override a veto. The Senate has now approved a similar bill that has passed the House, but not with enough votes to override a veto. Bush has said he will veto the legislation.

In September, Congress is due to reauthorize legislation that decides whether some U.S. children will keep their government-funded health insurance. The State Children's Health Insurance Program – SCHIP or CHIP, as it is more commonly known – expires on Sept 30. The program, which was created as part of the Balanced Budget Act of 1997 to address the growing problem of children without health insurance, is a federal/state partnership, similar to Medicaid, with the goal of expanding health insurance to children whose families earn too much money to be eligible for Medicaid, but not enough money to purchase private insurance.

In the decade that SCHIP has been in place the rate of insured children has been reduced by one-third; however, Congress is looking to improve the program as the reauthorization deadline draws closer. To find out the details of the House and Senate SCHIP bills, as well as possible complications in reauthorizing the program, AHCJ interviewed Robin Rudowitz, principal policy analyst for the Kaiser Commission on Medicaid and the Uninsured.

How many kids are covered by SCHIP?
There are currently 6 million kids covered by SCHIP. Combined with the 28 million that are covered by Medicaid, the government covers the medical insurance of one in four U.S. kids. Seventy-five percent of all kids that are eligible for the programs are enrolled.

How many are eligible but not covered?
Eight to nine million children in the U.S. don't have insurance. Of those, 5.4 million are eligible for SCHIP or Medicaid.

What are the critical issues facing Congress in the reauthorization of SCHIP?
This is a bill that has had broad public support, bipartisan support in Congress and states' support since it was first introduced 10 years ago. The biggest areas of debate for reauthorization are the level of financing, how to get the money to finance the program, how that money will be allocated and who will be covered.

How much does each party want to spend?
Current spending on SCHIP is $5 billion per year. In order to cover those currently enrolled at the baseline amount for the next five years, $25 billion needs to be allocated. However, the Congressional Budget Office estimates that the baseline number is not enough to cover rising health care costs and the fact that states are running out of carry-over funds. The office estimates that $14 billion extra will need to be allocated to SCHIP in order to keep the program running at current enrollment levels. The Bush administration proposed in February to allocate $5 billion extra. The Senate's bill proposes $35 billion extra and the House proposes $47 billion extra. See full versions of the House bill, H.R. 3162, and the Senate bill, S. 1893.

How is each house of Congress planning to finance the bill?
The Senate bill would be completely financed by an increased tobacco tax, while the House bill is proposing a combination of tobacco tax increase and reductions in Medicare Advantage.

How will the money be allocated to each state?
The biggest change is going to be in the formula that decides who gets what. Right now, SCHIP money is capped at the federal level and the way the money is allocated is based on the percentage of uninsured children in that state. Now that SCHIP has been in place for a decade and the amount of uninsured children is reduced, that formula is no longer representative. The new formula would be based on the states' actual projected spending.

Recently, the Bush administration stated in a letter to lawmakers that it will limit SCHIP expansions to families with incomes greater than 250 percent of the federal poverty level. In order for states to cover these families, they must show 95 percent enrollment for families under 200 percent of the federal poverty level. How will this affect the reauthorization?
Achieving a 95 percent participation rate would be very challenging for a voluntary program; there are currently no states that meet that level. Participation rates in other voluntary programs, such as the low-income subsidy for Medicare Part D, are lower than children's current participation rates in Medicaid and SCHIP. There are at least 17 states that currently cover kids above 250 percent of the federal poverty level, 11 of which received approval to do so within the past year, including Pennsylvania, Oklahoma, Indiana and Connecticut. Both the House bill and the Senate bill would permit coverage above 250 percent of poverty yet this new rule favors a smaller, more restrictive program.

Conservatives argue that middle income people are on SCHIP. How many of them are there and how does it work for them?
Ninety-one percent of the kids enrolled in SCHIP are below 200 percent of the federal poverty line, so the largest majority is made up of lower-income children. States that do allow increasingly higher-income level families to be covered, say above 350 percent, require them to pay premiums, much like private insurance.

How many adults are covered under SCHIP, and how would they find insurance if they are excluded from the program?
There are six million kids covered under SCHIP, but a very small number of adults. The Senate bill would limit any new waivers to cover parents. The House bill permits coverage of parents conditional on states covering kids. If the reauthorization caused childless adults to be excluded from the SCHIP, other options would be for states to expand Medicaid to cover them, or use their own funds. Adults are increasingly seen without coverage; since 2000, over 7 million adults have become uninsured. Research does show that covering parents helps increase enrollment and retention and improves access for care for kids.

Photo: National Eye Institute

What are some of the other components of the two bills?
Outreach is a big thing in both the House and Senate. Both are looking to provide an enrollment incentive; the Senate has allocated money for outreach and the House bill contains a proponent for express lane eligibility.

What can the new legislation look like?
I don't like to give predictions. One of the jobs facing Congress in September is to reach an agreement on a bill that satisfies both houses. The Bush administration has clearly threatened to veto both bills. The newest Census data showing a continued increase in the number and rate of uninsured children is likely to put additional pressure on Congress and the administration to reach an agreement. SCHIP will not be able to support current program levels or be able to reach more uninsured children without additional federal funding.

What are some things journalists should be looking for when covering SCHIP?
What happens in September is really critical because of that September 30^th deadline. If it is not reauthorized there will be no federal funding and six million kids will be at risk for losing their health insurance. It's good to look for individuals covered by the program who can tell how much they appreciate and rely on it.

Jessica Nuñez is a Web producer for AHCJ. She is a senior studying convergence journalism and Spanish at the University of Missouri. Her focus is news editorial writing, and she plans to pursue a master's degree in magazine writing.