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The S-CHIP Controversy

What is S-CHIP?

The State Children's Health Insurance Program (S-CHIP) is jointly funded by the federal government and the states to provide health insurance to the working poor — children from families that make too much money to qualify for Medicaid, but not enough to pay for health insurance. In 2006, S-CHIP covered approximately 6.7 million children.

What is the controversy?

S-CHIP is up for renewal this year, but Congress and the White House have very different ideas about how to continue this program. Recently the House and Senate both passed bills to extend and expand S-CHIP to cover children from families that are in somewhat higher income brackets, in recognition that the cost of living in some states is higher than in others. But President Bush said he would veto these bills. The White House is concerned that if the eligibility criteria are loosened in that way, some families who make enough money to afford private insurance will switch to the government-funded program instead.

New Bush Administration Rules

Last Friday, Bush Administration health officials sent state health officials a letter containing new criteria that states need to meet before they can expand S-CHIP to include children from families that make more than 250 percent of the poverty level ($42,900 for a family of three). Currently, 18 states and the District of Columbia provide health insurance coverage to children from families with incomes above 250 percent of the poverty line, or are in the process of doing so. States must comply with the new rules within a year.

According to the new requirements, before states can expand S-CHIP to cover children from families that make more than 250 percent of they poverty level, they must:

- Establish that the child has been without health insurance for at least one year.

- Assure the federal government that at least 95 percent of children currently eligible for S-CHIP or Medicaid are enrolled in one of those programs.

- Make sure that an S-CHIP family's contribution to its health care costs (premiums, co-pays and deductibles) is only slightly less than the family would pay for a comparable private insurance plan. However, families could not be required to pay more than 5 percent of their income toward S-CHIP costs.

From NPR reports and the Associated Press

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