Fact Sheet

SCHIP Reauthorization: Renewing Our Commitment to America's Children

The State Children’s Health Insurance Program, or SCHIP, is an important tool for helping low-income children -- and should be reauthorized. 

• The administration supports reauthorizing SCHIP and has proposed boosting SCHIP spending by $5 billion in new funding over the next five years.
• SCHIP was developed for a targeted population -- low income children not eligible for Medicaid. These are children in families earning below 200 percent of the federal poverty level (FPL). For a family of four, that would be an annual income of $41,300 or less.
• SCHIP is not the best way to help children at higher income levels who are uninsured, and this Administration does not support extending SCHIP to higher-income children and adults.
• Legislation should also fix the SCHIP allotment formula for states. An improved formula, based largely on what states are actually spending on children in the targeted population, would more accurately direct resources to needs.

The President’s Budget adequately funds low-income children -- $50 billion in new SCHIP spending (as some have proposed) is not a responsible use of taxpayer dollars. 

• According to an Urban Institute analysis, 689,000 children in low-income families (below 200 percent of FPL) are uninsured for a full calendar year and eligible for SCHIP. If all children eligible under the different state qualifications were included, the number rises to 794,000 children eligible for SCHIP and uninsured for a full calendar year.
• This estimate is lower than other assessments of this population, and demonstrates that adding $50 billion in additional funding is unnecessary.
• Since FY 2001, two million more children have been enrolled in SCHIP and enrollment of children in Medicaid has increased by 6 million. Enrollment of children in SCHIP and Medicaid has increased by 16 million between FY 1998 and FY 2006, for combined coverage of 36 million children in FY 2006.
• Under the President’s proposal, any child or adult currently on SCHIP still remains eligible. But the federal government will not pay states to cover adults at the same rate it pays to cover low income children.

SCHIP was never intended to put all 77 million children in the United States on public assistance.

• About 45 percent of American children are currently enrolled in either Medicaid or SCHIP, though only 37 percent are in families earning less than two times the FPL.
• Ten states and the District of Columbia now cover children from families with incomes of up to three times the poverty level. In those states, SCHIP provides health insurance for children in a family of four earning up to $61,950.
• New Jersey has extended eligibility to $72,275 for a family of four (350 percent of FPL).
• New York has voted to extend eligibility to families of four earning up to $82,600 (400 percent of FPL).
• Some members of Congress have proposed extending SCHIP to four times the poverty level nationwide, which would make 71 percent of all American children eligible for public assistance.

A government program intended for children should not cover adults. SCHIP should not be the vehicle for universal coverage.

• Some states use SCHIP funds mostly for adults. Wisconsin covers almost twice as many adults as children -- and spends 75 percent of its SCHIP funds on them. Minnesota spends 61 percent on adults, Illinois 60 percent, Rhode Island 57 percent, and New Jersey 43 percent.
• This year, 13 percent of SCHIP funds will go to adults other than expectant mothers. Nearly 30 percent of these adults are not even parents.
• Of the 14 states that were projected to exceed their federal SCHIP allotments in 2007, five cover children not considered low-income, and five cover adults other than expectant mothers. 

SCHIP and Medicaid are “crowding out” private insurance.

• A recent report by the Congressional Budget Office (CBO) estimates that SCHIP has reduced the uninsured in the target population by only 25 percent.
• CBO also puts the crowd-out rate for SCHIP children between 25 and 50 percent. In other words, for every 100 children enrolled in SCHIP, 25 to 50 of those children were previously on private insurance.
• A recent study published by the independent National Bureau of Economic Research put the crowd-out rate as high as 60 percent.
• More than 10 million children in families with incomes below 200 percent of FPL still have private insurance. Our goal should not be to take private insurance away.