Background
and Summary
The Children’s Health
Insurance Program (CHIP) was established in 1997 by a bi-partisan majority of
Congress to provide health insurance coverage to children who would otherwise
be uninsured. CHIP is targeted to low-income families who do not qualify
for Medicaid, but are unable to afford private insurance, and the program has
made great strides in covering uninsured children. The program requires
reauthorization by Congress by September 30th of this year.
On
July 19, 2007, the Senate Finance Committee approved S. 1893, the Children’s
Health Insurance Reauthorization Act of 2007 (the “CHIP Reauthorization
Act”) by a vote of 17 to 4. The legislation would reauthorize CHIP,
investing an additional $35 billion over five years to strengthen the program’s
financing; increase outreach and enrollment for low-income children of the
working poor; enhance premium assistance options for low income families; and
improve the quality of health care that children receive from public programs
like Medicaid and CHIP.
Major Provisions
Enactment
of the CHIP Reauthorization Act would accomplish the following
priorities:
Lower
the rate of uninsured low-income children. The CHIP Reauthorization Act would provide coverage for 6.6 million
children currently enrolled in CHIP, and for an additional 3.2 million children
who are uninsured today. The legislation would also provide financial
incentives for states to lower the rate of uninsured children by enrolling
eligible children in CHIP and Medicaid.
Strengthen
CHIP by increasing and targeting funding. In order to address the
funding shortfalls faced by many states in recent years, the CHIP Reauthorization Act would improve
the program’s financing rules to ensure resources are better directed to cover
eligible children. States’ funding would be based on their spending
projections. States would also have access to a contingency fund to cover
unforeseen shortfalls arising from economic downturns or emergencies.
Improve
state tools for outreach and enrollment. The bill would provide $100
million in new grants to fund outreach and enrollment efforts that increase
participation of eligible children in both Medicaid and CHIP. Outreach
efforts would range from national efforts to raise awareness of CHIP, to
efforts targeting children in rural areas with high populations of eligible but
unenrolled children and higher incidence of racial
and ethnic disparities of coverage, to targeted efforts to find and enroll
eligible Native American children. The bill would also create a $49
million demonstration project allowing up to 10 states to implement “express
lane” enrollment for low-income children already eligible for benefits.
Improve
the quality of health care for low-income children. The CHIP Reauthorization Act would establish
a new framework for improving the quality of health care for children, creating
a quality initiative within the U.S. Department of Health and Human Services
(“HHS”) charged with developing and implementing quality measures and improving
state reporting of quality data.
Help
reduce racial and ethnic disparities in coverage and quality. The CHIP Reauthorization Act would implement
initiatives to reduce racial and ethnic health care disparities, by improving
outreach to minority populations including Native Americans, and providing new
funding for state translation and interpretation services in CHIP.
Prioritize
children’s coverage in CHIP. The CHIP Reauthorization Act would eliminate childless adult
coverage within two years; eliminate future state waivers for parents; and
lower the federal reimbursement for existing parent populations. These
provisions would encourage states to direct limited CHIP resources to targeted
low-income children. States would have an additional option to cover
pregnant women in addition to existing options to cover them through a state
waiver or through regulation.
Improve
access to critical benefits. The CHIP Reauthorization Act would improve access to mental health
services by requiring states that offer these services to provide coverage for
those services on par with medical and surgical
benefits covered under
CHIP. The bill would also provide $200 million in new grants for states
to improve accessibility and strengthen dental coverage for children.
Reduce
administrative barriers. The bill would create a new option for states to
choose in implementing citizenship documentation requirements and would extend
to CHIP the requirement to establish citizenship for program enrollees.
The bill would also encourage states to standardize enrollment
procedures, and to eliminate requirements for face-to-face interviews to
complete enrollment in public health programs. The bill would also
require states to detail efforts to lower administrative barriers to
enrollment.
Improve
access to private coverage options through new premium assistance rules. The
bill would expand upon current premium assistance options for states, allowing
them to offer a premium assistance subsidy for qualified, cost-effective
employer-sponsored coverage to all targeted low-income children who are
eligible for child health assistance and who have access to such
coverage. The bill would also change the federal rules governing
employer-sponsored insurance to make it easier for states to offer premium
assistance programs.
Maintain
state flexibility. The bill would retain state flexibility to set
eligibility levels for the program based on the cost of living in each state,
but lower federal matching rates for states newly covering children above 300
percent of the federal poverty level.
Consistent with the 1997 law that
created CHIP, the CHIP Reauthorization Act is paid for with new revenue from a
$.61 per-pack increase in the excise tax on cigarettes and a corresponding
proportional increase on all tobacco products.
Legislative History
S. 1893, the CHIP Reauthorization Act, was approved by
the Senate Finance Committee on July 19, 2007, by a vote of 17to 4. As
discussed above, a tax on tobacco products generates the revenue to pay for
CHIP under this bill. Because the Constitution requires all revenue
measures to originate in the House, a House bill, H.R. 976, will serve as the
vehicle for the Senate to consider the CHIP Reauthorization Act. Once the
Senate proceeds to the bill, the substance of S. 1893 will be offered as
a substitute to H.R. 976.
Possible Amendments
The DPC will publish
information on amendments when it becomes available.
Administration Position
The Bush Administration has
issued a Statement of Administration Policy indicating its opposition to this
legislation and the President’s intent to veto the bill if it is presented to
him in its current form.
