News Release

HHS Secretary Sebelius Announces Release of $6 Billion in New CHIP Funds to Insure Children

HHS Secretary Kathleen Sebelius today announced that $6 billion in new federal funds will be made available to states and U.S. territories for fiscal year 2009 to provide health care to millions of children across America through their Children’s Health Insurance Programs (CHIP). 

The new funds for CHIP were made available by the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), which was signed into law by President Barack Obama on February 4. CHIPRA provides additional funding that will help states and territories maintain existing CHIP enrollment and expand their programs. 

“We are taking an important step to provide quality, affordable health care to millions of children,” Secretary Sebelius said at the Bergen Family Center in Englewood, N.J. “Through CHIPRA, states and territories will receive additional funds to provide health insurance to 11 million children, including 4 million who were previously uninsured.  Parents now have more help if their children fall ill.”

“In these difficult economic times, more and more families will turn to CHIP to assure their children’s continued access to critical health care services,” Secretary Sebelius said. “To ensure our nation’s future, we must insure our children now.”

Secretary Sebelius was joined by New Jersey Governor Jon S. Corzine and other officials who have led the efforts to gain health insurance coverage for all the children of the Garden State and our nation. 

“Thanks to our partners in Washington and through New Jersey’s hardworking Congressional delegation, the struggle to secure children’s health legislation in our state is finally over,” said Governor Jon S. Corzine. “At a time when our state and nation are facing substantial economic challenges, we have remained steadfast in our commitment to provide access to quality health insurance for our uninsured children. I’m pleased that through our successful NJ FamilyCare program and new Express Lane option, we will continue to make great strides in reaching and enrolling every eligible child in New Jersey.”

Of the $6 billion in new funding under CHIPRA, HHS has released more than $1 billion and expects to allocate the remainder to the states and territories by the end of September.  CHIP provides health insurance for children of working families whose incomes are too high for traditional Medicaid, but too low for either employer-sponsored family plans or other private coverage.

While CHIP is optional, each state and every territory operates a program. Similar to Medicaid, CHIP is jointly funded by states and the federal government.  However, the federal government pays states a higher share of their CHIP costs than for their Medicaid programs.

A list of funding by state for CHIP programs can be viewed at: www.insurekidsnow.gov.

A fact sheet follows:

HHS FACT SHEET

$6 Billion in New CHIP Funds

June 19, 2009

The Children's Health Insurance Program Reauthorization Act (CHIPRA), extends the Children Health Insurance Program (CHIP) through fiscal year 2013 and provides substantial new resources to states and U.S. territories to strengthen their existing programs and extend coverage to an estimated 11 million children, 4 million who were previously uninsured.  

CHIPRA will help serve more children and avoid federal funding shortfalls.  In addition to increased funding, CHIPRA revised the annual allotment formula to better reflect projected state and program spending.

NJ FamilyCare

The CHIP program in New Jersey is called NJ FamilyCare. NJ FamilyCare covers children up to 350 percent of the federal poverty level (FPL), $77,175 for a family of four.  Families pay premiums based on their income as part of their share of the cost of the program.  During fiscal year 2008, more than 151,000 children were enrolled in the CHIP program in NJ.

Under CHIPRA, New Jersey’s allotment will be increased from $102.2 million to $505.4 million (nearly a 400 percent increase), the second largest percentage increase in the nation.  

For the first time, this allotment will fully fund New Jersey’s CHIP program and provide the necessary funding for the expected increase in enrollment of an additional 33,000 children over the next year.

Express Lane Eligibility

CHIPRA gives states the option to provide children with “Express Lane Eligibility,” in which Medicaid and CHIP eligibility requirements may be satisfied based on information available through other government agencies.  

On April 14, 2009, Governor Jon S. Corzine announced a new “Express Lane” state insurance application to streamline the enrollment of uninsured childen in NJ FamilyCare, using government records.  Through May 31, 2009, New Jersey has identified nearly 280,000 households with 450,000 children who have reported that they do not have health insurance coverage. 

In addition to New Jersey’s efforts to increase participation of eligible children in NJ FamilyCare through the Express Lane option, Governor Corzine signed into law a health reform bill – The New Jersey Health Care Reform Act of 2008 – mandating health coverage for all children under the age of 19.  It establishes an outreach, enrollment, and retention workgroup charged with developing a plan to strengthen outreach and maximize enrollment in the NJ FamilyCare program.  New Jersey expects that 80,000 children will gain health insurance coverage by June 2010 either through Medicaid, CHIP or New Jersey’s full cost buy-in program.

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last revised: July 30, 2009