U.S. Department of Health & Human Services
Improving the health, safety, and well-being of America	Frequent Questions Search

Font Size     Print     Download Reader

This is an archive page. The links are no longer being updated.

The SCHIP final regulation, which codifies the policies and practices that the federal government has developed in partnership with states, is also on display today at the Federal Register. These regulations implement the statutory requirements for the program, while preserving states' flexibility in designing their SCHIP programs.

"SCHIP is one of the proudest achievements of the Clinton-Gore Administration," said Secretary Shalala. "It recognizes that many working families who play by the rules and work hard still can't afford basic health care for their children. It's been very gratifying to help these families secure access to quality health care for their kids."

Signed into law in August 1997 by President Clinton, the SCHIP program pledges $24 billion over the first five years to help states find and enroll low-income children whose families earn too much to be eligible for traditional Medicaid, but not enough to afford private insurance. HHS has approved SCHIP plans for all 50 states, 5 U.S. territories, and the District of Columbia, along with more than 70 amendments to SCHIP plans which help streamline processes and increase enrollment. SCHIP is the most significant improvement in access to health care for children since the creation of Medicaid in 1965.

The final regulation largely reflects longstanding HHS policies and current state practices. These policies include:

• Basic rules in children's elegibility for SCHIP;
• Procedures for screening children for Medicaid and, if eligible, enrolling them in Medicaid;
• Options available to guard against "crowd out" or to prevent public coverage from substituting for private insurance;
• Limits on out-of-pocket costs for families with children enrolled in SCHIP; and,
• Minimum requirements for the SCHIP benefits package.

The final regulation generally maintains the policies that states have already implemented, while providing states with additional flexibility in some areas. The final rule also includes some changes made in response to more than 1,000 pages of public comments on the proposed regulation published in November 1999. Highlights include:

Employer-Sponsored Insurance

One of the proposed provisions mostly frequently commented upon addresses premium assistance for employer-sponsored insurance (ESI), with states urging additional flexibility to use SCHIP funds to purchase employer-sponsored coverage for children. The final rule strikes a new balance, granting states' more flexibility to experiment with premium assistance programs while preventing substitution of public insurance for employer-sponsored coverage.

The SCHIP law allows states to use program funds to help families buy insurance for their children through their employers. Prior to the publication of this rule, HHS had determined that states could only use SCHIP funds to buy insurance if the employer contributed a substantial amount toward the cost of coverage - at least 60 percent.

Under the new rule, states will no longer be required to limit their premium assistance programs to plans in which employers contribute at least 60 percent of the cost of coverage, although the states will still need to demonstrate that the ESI proposal is cost-effective. This new flexibility will help states use the SCHIP program to build on the private insurance system to cover low-income children and families.

Coordination with the Medicaid Program

The final rule clarifies the states' obligation to "screen and enroll" children for eligibility for Medicaid before enrolling them in SCHIP. The "screen and enroll" requirement is one of the fundamental aspects of the program. Its purpose is to ensure that eligible, uninsured children are enrolled in the appropriate program so that every child receives the best health insurance coverage. This also helps to optimize the use of SCHIP funds by ensuring that limited funds are not spent on covering children already eligible for Medicaid.

Beneficiary Protections

The regulation also includes some important patient protections for children and their families in the event that a child's coverage is denied or terminated or a child is denied access to a needed medical service. The proposed rule included a provision requiring states to allow applicants and enrollees an opportunity to file a grievance or appeal with respect to a broad range of issues. The final rule narrows the scope of the matters subject to review and more fully defines the core elements of the review process. States retain flexibility to design their review procedures as long as they do so in a way that offers families a timely and impartial review.

Other changes in the final rule include:

• Expanded state flexibility to establish exceptions to the six-month period of uninsurance, such as in cases of involuntary loss of coverage, economic hardship or change to an employer that does not offer coverage; and,
• Further clarification of cost-sharing rules that exempt American Indians/Alaskan Natives from having to bear out-of-poc ket costs.

"The publication of this final regulation is a critical step in moving this program forward," said Timothy M. Westmoreland, HCFA's director of the Center for Medicaid and State Operations. "This rule represents more than three years of working with states to develop policies that will continue SCHIP's success. It is a trustworthy blueprint for the states as they continue to strengthen and expand their SCHIP programs."

"Our combined efforts to help hard-working, low-income parents give their kids the kind of access to health care that many of us take for granted are working," said Claude Earl Fox, M.D., M.P.H., administrator of the Health Resources and Services Administration, the agency working with HCFA and states to implement SCHIP. "We will continue to work with states, communities and private organizations to reach America's uninsured children and provide them with the medical care they need to live healthy, happy, and productive lives."

State-by-state enrollment figures can be found at cms.hhs.gov/init/fy2000.pdf.

###