State Children Health Insurance Program

The State Children's Health Insurance Program (SCHIP) also known as the Children's Health Insurance Program (CHIP), is a program administered by the U.S. Department of Health and Human Services they provide matching funds to states for health insurance to families with children. The program was designed with the intent to cover the more than 8 million uninsured children in families with incomes that are modest but too high to qualify for Medicaid. [1][2] SCHIP was originally apart of the Social Security Act title XXI and authorized by the federal Balanced Budget Act of 1997.[3] Under the new act, the government would spend $24 billion over five years for children's health with a commitment to expend over $40 billion for the initiative over the next ten years. New funding would be created to allow states to expand coverage under Medicaid, or provide the SCHIP through title XXI of the Social Security Act by creating a new insurance plan or a collaboration of both programs.[4] Funding for the program would come from a tax increase on tobacco products. The federal government would pay nearly 75 percent of the cost, with individual states paying 15 percent of the estimated cost to cover each child. The federal funding for the program was a part of a ten year block grant which meant in 2007 the grant funding would expire if not re-authorized. Under the presidency of George W. Bush two efforts to expand funding for the program failed when President Bush vetoed them. He contended that such efforts were steps toward federalization of health care, and would "steer the program away from its core purpose of providing insurance for poor children and toward covering children from middle-class families."[5] Eventually a two year re-authorization was passed in 2007 but ceased any expansion of any portion of the program. In 2009 along with the inauguration of President Barack Obama came the Reauthorization Act of 2009, expanding the healthcare program to an additional 4 million children and pregnant women, including for the first time legal immigrants without a waiting period.[6] Funding for the $32.8 billion program came from another surge in cigarette tax of 0.62 cent bringing the total tax to $1.01 per pack, other tobacco products also received a tax increase.[7]

SCHIP is designed to offer additional funds to states to expand their Medicaid benefits to children younger than 19 years of age, who otherwise may not qualify because their family income is in excess of Medicaid levels. Particularly in Missouri the state chose to expand its Medicaid program to children in families with incomes up 300 percent of the federal poverty level (FPL), which is a monthly income of $5,588 for a family of four. SCHIP in Missouri is titled "MC+ for Kids in Missouri," currently Missouri has 73,000 children enrolled in its program with a total of 125,000 children still uninsured. MC+ uses an income scale to determine if individuals will be charged premiums to participate in the program, rates range from 1-5 percent of the families income. In order to qualify for MC+ a child must be no older than 19 years of age, applied for a social security number, be a Missouri resident and U.S. citizen and whose family meets the income guidelines. Children are eligible if their monthly family income is 150-300 percent of the FPL, have been uninsured for up to six months with no access to affordable health insurance premiums and have family assets worth less than $250,000. If all qualifications are met families pay a set premium based on their family size and income, premiums should be no more than 5 percent of their total income.[8] As of 2008, 81 percent of children at or below 200 percent of the FPL were enrolled in MC+ with 19 percent of children above 200 percent of the FPL enrolled. As of 2010 there have been a total of 86,261 children ever enrolled in the MC+ program.[9]

Within Missouri compared to Medicaid, SCHIP funding is paid out at a higher rate by the federal government. In 2007 SCHIP was matched 73 percent in contrast to Medicaid's 62 percent of federal funding. According to the Missouri Department of Social Services MC+ cost the state little in general revenue because of the higher match rates, in 2005 the program only cost the state $346,299 in general revenue with expenditure averages of $1,652 per child by 2006.[4] As of 2009 total SCHIP expenditures in Missouri at the state level totaled $35,039,142 and $100,937,484 at the federal level, Missouri also had a federal matching rate of 74.23 percent in 2009.[9]

Not every state participates in the SCHIP, Arizona completely eliminated their program after passing a budget that eliminated their KidsCare program. After realizing they would lose federal matching and stimulus funds they are looking at reinstating some of the program, but not permitting new enrollment.[10] According to the article ¬Impact of Medicaid Disenrollment on Health Care Use and Cost from May 2007, researchers from Brigham Young University and Arizona State found that children who drop out of SCHIP cost states more money because they shift away from routine care to more frequent emergency care situations. The conclusion of the study is that an attempt to cut the costs of a state healthcare program could create a fabricated savings because other government organizations pick up the tab for the children who lose insurance coverage and later need care.[11]

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