The State Children’s Health Insurance Program (SCHIP) is one of the most important children’s initiatives of the last half-century.
SCHIP was created by Congress in 1997 as a bipartisan effort to provide insurance coverage for children in families with too much income to qualify for Medicaid but not enough to afford to buy a policy in the private insurance market.
Over the last decade, SCHIP has given millions of children nationwide the chance to start out healthy in life. SCHIP is a state-based program that is jointly financed by the federal and state governments. Unlike Medicaid, SCHIP is a block grant program with funding that has caps both nationally and state by state.
To encourage states to participate, the federal government assumes a larger share of SCHIP financing by paying higher matching payments relative to Medicaid. Distribution of SCHIP funds across states is based on each state’s share of low-income children.
The statute creating SCHIP gives states considerable flexibility in designing their child health programs, a factor that helped make it attractive to state policymakers.
There is strong evidence that health insurance for children improves their access to care. At the time of the SCHIP’s inception, nearly a quarter of all low-income children were uninsured. Since that time, the program has extended coverage to millions.
Research has shown that uninsured children are more likely to experience avoidable hospital stays. Children without a primary care physician that SCHIP provides are nine times more likely to be hospitalized for a preventable problem.
A recent analysis by the Robert Wood Johnson Foundation found that SCHIP has reduced the number of uninsured children in America by 24%. There is overwhelming consensus by American health care leaders that SCHIP has been one of America’s rare recent success stories on the health care front, countering the general trend of a steady increase in the ranks of America’s uninsured.
Even so, 9 million American children remain uninsured today. The SCHIP reauthorization bill passed by Congress last year would have reduced the number of uninsured kids to 6 million, but it was vetoed by President George Bush.