Welcome to the
State Children's Health Insurance Program

SCHIP Summary

As part of the Balanced Budget Act of 1997, Congress created title XXI, the State Children's Health Insurance Program (SCHIP), to address the growing problem of children without health insurance. SCHIP was designed as a Federal/State partnership, similar to Medicaid, with the goal of expanding health insurance to children whose families earn too much money to be eligible for Medicaid, but not enough money to purchase private insurance. SCHIP is the single largest expansion of health insurance coverage for children since the initiation of Medicaid in the mid-1960s.

SCHIP is designed to provide coverage to "targeted low-income children." A "targeted low-income child" is one who resides in a family with income below 200% of the Federal Poverty Level (FPL) or whose family has an income 50% higher than the state's Medicaid eligibility threshold. Some states have expanded SCHIP eligibility beyond the 200% FPL limit, and others are covering entire families and not just children.

The Three Options

SCHIP offers states three options when designing a program. The state can either:

• use SCHIP funds to expand Medicaid eligibility to children who previously did not qualify for the program;
• design a separate children's health insurance program entirely separate from Medicaid; or,
• combine both the Medicaid and separate program options.

The State Plan

Similar to Medicaid, a state's SCHIP state plan is the mechanism that begins Federal Financial Participation (FFP) in a given state. As in Medicaid, CMS must either approve or disapprove a state plan within 90 days of its submission to CMS. The "90-day clock" remains ongoing unless CMS submits a formal written request for additional information from the state. When the information is received, unlike Medicaid, SCHIP does not reset the clock, but rather, starts counting again from the day that the written request was issued. Unlike Medicaid, there is no limit to the number of requests for additional information that may be made.

Similar to Medicaid, under SCHIP, states can modify their State Plans by submitting State Plan Amendments (SPAs). As with the initial plan submission, when a SPA is received by CMS, a 90-day clock begins. Here again, the 90-day clock may be stopped by a written request for additional information, and it resumes when the response is received. The 90-day clock does not reset, but begins counting from the day that the request for additional information was made. Click here for additional information regarding state plans. View state plan information or select a state from the SCHIP state plan map to view a specific state's plan.

Funding

The amount of the Federal funds available for title XXI programs is limited for each fiscal year both nationally and on a state-specific basis. The statute appropriates the following amounts for allotment:

• $4,295,000,000 for FY 1998;
• $4,275,000,000 for FY 1999 through FY 2001;
• $3,150,000,000 for FY 2002 through FY 2004;
• $4,050,000,000 for FY 2005 through FY 2006; and,
• $5,000,000,000 for FY 2007.

In general, state allotments for a fiscal year remain available for expenditure by that state for a 3-year period; the fiscal year of the award and the two subsequent fiscal years. However, any allotment amounts for a fiscal year that remain available after the three fiscal year period are subject to reallocation.

The Commonwealths and Territories also receive allotments based on a pool of funds prescribed in statute. The pool is equal to 0.25 percent of each year's total appropriation plus an additional amount. The additional amounts available for allotment to the Territories and Commonwealths are as follows:

• $32,000,000 for FY 1999;
• $34,200,000 for FY 2000 and FY 2001;
• $25,200,000 for FY 2002 through FY 2004,
• $32,400,000 for FY 2005 through FY 2006; and,
• $40,000,000 for FY 2007.

For qualifying expenditures, states receive an enhanced Federal matching rate that is equal to 70 percent of their Medicaid Federal Medical Assistance Percentage (FMAP) for the fiscal year plus 30-percentage points, not to exceed 85 percent. In addition to the limits imposed on the overall allotment amounts, there is a 10-percent limit on certain expenditures by each state that is applied on a fiscal year basis. This limit is referred to as the "10-percent fiscal year limit" and pertains to expenditures related to administration, outreach, and other child health assistance and initiatives. Read additional information regarding state allotments.

Eligibility

As stated earlier, eligibility for SCHIP is targeted towards uninsured low-income children. As a result, certain groups of children cannot be covered under SCHIP. These ineligible groups include:

• children who are covered under a group health plan or under health insurance coverage;
• children who are members of a family that is eligible for state employee insurance based on employment with a public agency;
• children who are residing in an Institution for Mental Diseases; and,
• children who are eligible for Medicaid coverage.

If a state opts for a separate child health program, certain other rules can affect eligibility:

• States can allow for self-declarations of citizenship;
• States are prohibited from enforcing duration of residency requirements;
• States may not enact lifetime caps or other time limits for eligibility;
• States can, at their option, choose to offer children 12 continuous months of eligibility; and,
• States may enforce enrollment caps and waiting lists for coverage, if these provisions are in the approved state plan.

Cost sharing

States are permitted to impose cost-sharing provisions on individuals who are enrolled in SCHIP. States may not charge cost sharing for preventive services or immunizations. States may not impose cost sharing that exceeds 5% of a family's gross or net income. Moreover, American Indian/Alaska Native children who are members of a federally recognized Tribe must not be charged any cost sharing. At their option, states may allow for self-declaration of Tribal membership to exempt families from cost-sharing provisions. Each SCHIP enrollee's family must be told of the maximum yearly cost-sharing limit for each child. The state plan must describe the methodology used to determine cost-sharing amounts, the consequences of not paying cost-sharing charges and the disenrollment protections that are provided for families that do not pay cost-sharing obligations. States must allow eligible families to pay any past due cost-sharing charges before the disenrollment process begins. States must allow families an opportunity to show that their family income has declined before being disenrolled for failure to meet cost-sharing obligations. Select a state from the SCHIP state plan map.

Other cost-sharing rules for children at or below 150% FPL include:

• States may not impose more than one type of cost sharing for a service;
• States may only impose one cost-sharing charge for all services delivered during a single office visit; and,
• Cost sharing for these children is limited to nominal amounts as set forth in the SCHIP regulation.

Coverage

For states that opt for a Medicaid expansion, the services provided under SCHIP mirror the Medicaid services provided by that state.

For states that opt for a separate child health program, there are four options for determining coverage:

1. Benchmark coverage: This is a coverage package that is substantially equal to either the Federal Employee Health Benefits Program Blue Cross/Blue Shield Standard Option Service Benefit Plan; or a health benefits plan that the state offers and makes generally available to its own employees; or a plan offered by a Health Maintenance Organization that has the largest insured commercial, non-Medicaid enrollment of any such organization in the state.
2. Benchmark equivalent coverage: In this instance, the state must provide coverage with an aggregate actuarial value at least equal to one of the benchmark plans. States must cover inpatient and outpatient hospital services, physicians surgical and medical services, laboratory and X-ray services, and well-baby and well-child care, include age-appropriate immunizations.
3. Existing state-based comprehensive coverage: In the states where existing state-based comprehensive coverage existed prior to the enactment of SCHIP (i.e., New York, Pennsylvania and Florida), the existing health benefits package is deemed to be meeting the coverage requirements of the SCHIP program.
4. Secretary approved coverage: This may include coverage that is the same as the state's Medicaid program; comprehensive coverage for children offered by the state under a Medicaid demonstration project approved by the Secretary; coverage that either includes full EPSDT benefit or that the state has extended to the entire Medicaid population in the state; coverage that includes benchmark coverage plus any additional coverage; coverage that is the same as the coverage provided by New York, Florida or Pennsylvania; or coverage purchased by the state that is substantially equal to coverage under one of the benchmark plans through the use of benefit-by-benefit comparison.

Regardless of the type of health benefits coverage provided by a state, they must provide coverage for well-baby and well-child care, immunizations and emergency services.

Other rules that affect which services are to be covered under SCHIP:

• Abortion services may only be provided to save the life of the mother, or to terminate a pregnancy resulting from an act of rape or incest.
• In general, states can not permit the implementation of preexisting condition exclusions.
• If SCHIP plans provide coverage through group health plans, preexisting condition exclusions are permitted only in so far as HIPAA rules allow.

Substitution of Coverage

States that opt for a separate child health program must implement procedures to ensure that coverage provided under the SCHIP program does not substitute for private group health plan coverage.

The potential for substitution of SCHIP coverage for private group coverage exists because SCHIP coverage may cost less or provide better coverage. States providing SCHIP coverage through premium assistance for group health plan coverage must adopt specific protections against substitution of coverage. These protections include a required waiting period without group health plan coverage and a minimum employer contribution. Select a state from the SCHIP state plan map.