Understanding the State Children's Health Insurance Program (SCHIP)

State Children's Health Insurance Program (SCHIP) is a government health insurance program that provides health insurance coverage for children from low income families. The income is usually too high to qualify for Medicaid, but not high enough to afford private insurance. The program covers US citizens and legal immigrants. SCHIP is administered on both the state and federal level. U.S. Department of Health and Services creates general budgets. Right now, every state except Arizona has a SCHIP program.

Background Information

SCHIP was originally created in 1997 as the way to expand health care coverage to children. It was based on a children's health insurance program that was already active in Massachusetts at the time. The program would reduce the financial burden on low-income families. The program placed a strong emphasis on preventative care, which helped to avoid health complications in the future. The original legislation gave states leeway to customize many aspects of their program to best suit their local conditions. It also allowed states to either incorporate SCHIP into their existing Medicaid programs, create new programs from scratch or some combination of both. Taking the later approach allowed them greater flexibility to customize the programs.

SCHIP was originally scheduled to expire in 2007, but Congress passed a reauthorization bill that extended it until the end of 2013. In 2008, President Obama signed the legislation that increased SCHIP's federal funding and extended it until 2015.

SCHIP Eligibility Requirements

The program is open to children under the age of 19. They must be either citizens, permanent resident aliens or visa-holding immigrants who are residents of the state where they are applying. Some states also include pregnant women under their versions SCHIP. Different states have different rules regarding what income the families need to have and how big the families have to be in order be eligible for their version of SCHIP. In most states, the program is limited to families who have no more then four children and whose income falls between 100 and 200 percent of the federal poverty levels. Those levels are adjusted every year, so eligibility requirements tend to change accordingly.

SCHIP Benefits

The federal guidelines require SCHIP programs to cover routine check-ups, immunizations, dental care, emergency room visits, short-term and long-term hospital care and laboratory and X-ray services. The states are required to cover preventative care in full using state and federal funds. If the SCHIP is separate from the state's Medicaid program, states are allowed to require patients to partially pay for anything else through monthly premiums or co-payments. However, those payments tend to be fairly low compared to the states' share. Some states set payment rates depending on income while others charge fix premiums.

How SCHIP is Funded

The SCHIP funding is split between state and federal governments, with federal government providing matching funds for state governments. Currently, the state governments pay 25 percent of the costs while federal government pays 75 percent. The total funding is adjusted every year to account for the number of people enrolled in each state's programs. The most recent reauthorization act paid for the increased funding by increasing the federal tax on tobacco products by 62 cents.

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