State Children's Health Insurance Program - State Administration

State Administration

Like Medicaid, SCHIP is a partnership between federal and state governments. The programs are run by the individual states according to requirements set by the federal Centers for Medicare and Medicaid Services. States may design their SCHIP programs as an independent program separate from Medicaid (separate child health programs), use SCHIP funds to expand their Medicaid program (SCHIP Medicaid expansion programs), or combine these approaches (SCHIP combination programs). States receive enhanced federal funds for their SCHIP programs at a rate above the regular Medicaid match.

By February 1999, 47 states had set up SCHIP programs, but it took effort to get children enrolled. That month, the Clinton administration launched the "Insure Kids Now" campaign, designed to get more children enrolled; the campaign would fall under the aegis of the Health Resources and Services Administration. By April 1999, some 1 million children had been enrolled, and the Clinton administration set a goal of raising the figure to 2.5 million by 2000.

States with separate child health programs follow the regulations described in Section 42 of the Code of Federal Regulations, Section 457. Separate child health programs have much more flexibility than Medicaid programs. Separate programs can impose cost sharing, tailor their benefit packages, and employ a great deal of flexibility in eligibility and enrollment matters. The limits to this flexibility are described in the regulations, and states must describe their program characteristics in their SCHIP state plans. Out of 50 state governors, 43 support SCHIP renewal. Some states have incorporated the use of private companies to administer portions of their SCHIP benefits. These programs, typically referred to as Medicaid managed care, allow private insurance companies or health maintenance organizations to contract directly with a state Medicaid department at a fixed price per enrollee. The health plans then enroll eligible individuals into their programs and become responsible for assuring SCHIP benefits are delivered to eligible beneficiaries.

In Ohio, SCHIP funds are used to expand eligibility for the state's Medicaid program. Thus all Medicaid rules and regulations (including cost sharing and benefits) apply. Children from birth through age 18 who live in families with incomes above the Medicaid thresholds in 1996 and up to 200% of the federal poverty level are eligible for the SCHIP Medicaid expansion program. In 2008, the maximum annual income needed for a family of four to fall within 100% of the federal poverty guidelines was $21,200, while 200% of the poverty guidelines was $42,400.

Other states have similar SCHIP guidelines, with some states being more generous or restrictive in the number of children they allow into the program. 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. North Dakota currently has the lowest at 160%. New York currently has the highest at 400% of the federal poverty guidelines. SCHIP Medicaid expansion programs typically use the same names for the expansion and Medicaid programs. Separate child health programs typically have different names for their programs. A few states also call the SCHIP program by the term "Children's Health Insurance Program" (CHIP).

States are allowed to use Medicaid and SCHIP funds for premium assistance programs that help eligible individuals purchase private health insurance. As of 2008 relatively few states had premium assistance programs, and enrollment was relatively low. Interest in this approach remained high, however.

In August 2007, the Bush Administration announced a rule requiring states (as of August 2008) to sign up 95% of families with children, earning 200% of the federal poverty level, before using the funds to serve families earning more than 250% of the federal poverty level. The federal government said that 9 out the 17 states that offer benefits to higher-earning families were already compliant. Opponents of this rule argued that signing up higher-income families makes lower-income families more likely to sign up, and that the rule was incompassionate toward children who would otherwise go without medical insurance.