Children's Health Insurance Program
CHIP was formulated in the aftermath of the failure of President Bill Clinton's comprehensive health care reform proposal.
Despite opposition from some conservatives, SCHIP was included in the Balanced Budget Act of 1997, which President Clinton signed into law in August 1997.
At the time of its creation, SCHIP represented the largest expansion of taxpayer-funded health insurance coverage for children in the U.S. since the establishment of Medicaid in 1965.
Bipartisan Commission on Comprehensive Health Care was formed in 1989 and charged with recommending "legislative action to ensure coverage for all Americans."
Given the challenges of comprehensive health reform, Governor Jay Rockefeller, who was elected chair following Rep. Pepper's death, emphasized his commitment to pursue legislative action not only on the commission's full set of recommendations but also on a "down payment"—to expand public health coverage immediately for children and pregnant women, consistent with the principles the commission put forward.
The legislation would guarantee public insurance coverage through Medicaid for every American child living in poverty and offset the cost of the improvements by doubling the federal excise tax on cigarettes.
[6] After the HSA failed in the fall of 1994, congressional leaders and the administration recognized the need for an incremental, bipartisan approach to health care reform.
Senator Ted Kennedy, Chairman of the Senate Committee on Health, Education, Labor, and Pensions (HELP) was intrigued by a children's health insurance plan in Massachusetts that had passed in 1996, and met with a Boston Medical Center pediatrics director and a Massachusetts state legislator to discuss the feasibility of a national initiative.
[10] Thus, in October 1996, Kennedy introduced a bill to provide health care coverage for children of the working poor, to be financed via a 75 cents a pack cigarette tax increase.
[11] This had precedents from earlier in the Clinton administration: a different variant of this approach, dubbed "Kids First", had been envisioned as a backup plan during the original 1993 Task Force on National Health Care Reform meetings.
[17] An initial objection of Republicans in the Senate was that proposing to pay for the services by raising the federal tax on cigarettes, from 24 cents a pack to 67 cents a pack, ignored the likely consequence that sale of tobacco products would decrease and tax revenues would increasingly fall short of those needed to pay for the expansion of benefits.
[22] Kennedy and Hatch scoffed at the objection, with the former saying, "If we can keep people healthy and stop them from dying, I think most Americans would say 'Amen; isn't that a great result?'
If fewer people smoke, states will save far more in lower health costs than they will lose in revenues from the cigarette tax.
[11] Organizations from the Children's Defense Fund to the Girl Scouts of the USA lobbied for its passage, putting public pressure on Congress;[11] Kennedy urged Clinton to use her influence within the White House.
[11] SCHIP was then passed and signed into law by Bill Clinton on August 5, 1997, as part of the Balanced Budget Act of 1997, to take effect the following month.
Separate programs can impose cost sharing, tailor their benefit packages, and employ a great deal of flexibility in eligibility and enrollment matters.
[30] With the exception of Alaska, Idaho, North Dakota and Oklahoma, all states have a minimum threshold for coverage at 200% of the federal poverty guidelines.
States are allowed to use Medicaid and CHIP funds for premium assistance programs that help eligible individuals purchase private health insurance.
[32] Children up to the age of 19 from families with incomes too high for Medicaid but below 200% to 300% of the federal poverty level (FPL) are typically eligible for CHIP.
[34] The conclusion of the study is that an attempt to cut the costs of a state healthcare program could create a false savings because other government organizations pick up the tab for the children who lose insurance coverage and later need care.
[35] A briefing paper by libertarian think-tank Cato Institute estimated the "crowding out" of private insurers by the public program could be as much as 60%.
[36] SCHIP was created in 1997 as a ten-year program; to continue past federal fiscal year 2007, passage of a reauthorization bill was required.
The first two reauthorization bills to pass through Congress would also expand the program's scope; President George W. Bush vetoed them as improper expansions.
A two-year reauthorization bill was signed into law by the President in December 2007 that would merely extend current CHIP services without expanding any portion of the program.
The measure would have expanded coverage to over 4 million more participants by 2012, while phasing out most state expansions in the program that include any adults other than pregnant women.
Originally intended to provide health care coverage to low-income children, HR 976 was criticized as a giveaway that would have benefited adults as well as non-U.S.
[45] After his veto, Bush said he was open to a compromise that would entail more than the $5 billion originally budgeted, but would not agree to any proposal drastically expanding the number of children eligible for coverage.
[47] On October 18, 2007, the House of Representatives fell 13 votes short (273–156) of the two-thirds majority required to override the president's veto, although 44 Republicans joined 229 Democrats in supporting the measure.
3963, created firmer caps on income eligibility, prevented adults from joining, and banned children of illegal immigrants from receiving benefits.
[50] In the wake of President Barack Obama's inauguration and the Democrats' increased majorities in both houses of Congress, legislative leaders moved quickly to break the political stalemate over CHIP expansion.
