STATE CHILDREN’S HEALTH INSURANCE PROGRAM (SCHIP)

Increasing numbers of low-income Missourians have lost their health insurance and have either had to forego health care or use hospital emergency rooms for routine care.  These practices increase insurance premiums for people with health insurance and discourage preventative health care.  In August, figures from the U.S. Census showed that the number of Missourians without health insurance jumped 16 percent -- three times the national average -- rising by 104,000 residents to a total of 772,000. The jump was expected after those more than 100,000 Medicaid recipients were dropped from the program in 2005 when the Governor and the state legislature severely restricted income eligibility thresholds.  At least half of those who lost health care coverage were children.

The federal SCHIP program provides important funding for many of the children who still receive health coverage through the Missouri Medicaid program.  By law, the SCHIP program will expire on September 30, 2007 unless reauthorized by congress and approved by the president.  Congress is moving toward a reauthorization of the program that would increase funding by between $35 billion and $50 billion over the next five years.  However, President Bush supports an expansion of only $5 billion.

It is vital to Missouri that SCHIP be reauthorized and funded at a level that returns health insurance to the greatest number of eligible children.

What is SCHIP?

SCHIP is a federal children’s health insurance program created by Congress in 1997.  The program provides states with an option for funding part of the cost of providing health insurance to low-income children under the age of 19 who are otherwise not eligible for Medicaid benefits.  Since inception of SCHIP, the percentage of uninsured children in the U.S. has dropped from 23% to 15%.  Today, about 4.4 million children get health insurance through SCHIP at an annual cost of about $6 billion. 

Why is SCHIP Particularly Important to Missouri?

SCHIP is very flexible and gives states wide latitude in designing approaches that best fit their specific needs.  Missouri is one of 13 states that decided to use SCHIP funding to expand Medicaid coverage to serve additional low-income children.  While these children receive the same health care benefits as regular Medicaid enrollees, SCHIP pays for 73% of the costs as opposed to 62% of the costs under Medicaid.    

In Missouri, about 63,000 children rely on SCHIP for health insurance at a cost of less than $2,000 per child.  The total program costs about $118 million and is supplemented by premiums paid by the families of about 27% of the children enrolled.  Children from families with incomes up to 300% of the federal poverty level (about $62,000 for a family of four) are eligible to participate.  In Missouri, SCHIP is called “MC+ for Kids.”   

Why is Federal Reauthorization Controversial?

Both the U.S. Senate and the U.S. House of Representatives have passed bills that would reauthorize and greatly expand SCHIP.  The Senate bill would increase funding by $35 billion over the next five years and pay for the increase with a new federal cigarette tax of 61 cents per pack.  The House bill would increase funding by $50 billion over five years funded by 45 cents per pack cigarette tax and would make would make several changes in the current Medicaid program including a reduction in payments to managed care providers. 

The House and Senate are close to a compromise that is very similar to the Senate position.  Under the proposed compromise, SCHIP would receive an additional $35 billion in funding over the next five years.  The additional funding would be paid for by an increase in the tobacco tax, which would be "generally similar" to the 61-cent-per-pack tax proposed in the Senate version of the legislation.  The bill does not include revisions to Medicare that were included in the House version of the bill because the provisions are vehemently opposed by Republican legislators.

President Bush has threatened to veto the compromise measure.  He is concerned that the proposed changes to SCHIP are too expensive, rely on new taxes, and increase government control of health care at the expense of private insurers.  The Bush administration has also issued program guidelines that would severely limit states’ ability to offer insurance to children from families earning more than 250% of the federal poverty level.   

While there are probably sufficient votes in the Senate to override a veto, the House is unlikely to muster enough support for an override.  If the president vetos an SCHIP reauthorization bill, it is likely that congress will pass a continuing resolution that permits the program to continue in its current form for a specified number of months.  During continuation of the program, congress would try to reach compromise with the president.      

What can I do?

If you feel strongly about children’s health care and want to make your views count, you can contact your senators, representative, and the president by following the internet links provided below:

Missouri Representatives

http://www.house.gov/house/MemberWWW_by_State.shtml#mo

Missouri Senators

http://www.senate.gov/general/contact_information/senators_cfm.cfm?State=MO

The President

http://www.whitehouse.gov/