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Three Years into SCHIP

What States Are and Are Not Spending

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Document date: September 01, 2000
Released online: September 01, 2000

Number A-44 in Series, "New Federalism: Issues and Options for States"

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

Note: This report is available in its entirety in the Portable Document Format (PDF).


Introduction

The State Children's Health Insurance Program (SCHIP), Title XXI of the Social Security Act enacted as part of the Balanced Budget Act of 1997, is often referred to as the largest expansion of the federal commitment to health insurance since the enactment of Medicare and Medicaid in 1965. The new program, designed to provide health insurance coverage to low-income children ages 18 and under, makes approximately $4 billion available to states each year, beginning in fiscal year 1998. To obtain these federal funds, states must contribute matching funds at rates that are 70 percent of their state share under Medicaid. Under SCHIP, states can expand their existing Medicaid programs, establish a program separate from Medicaid, or combine the two approaches.

All states and the District of Columbia have received approval from the Department of Health and Human Services (HHS) to implement expansions of coverage under SCHIP. While states were authorized to begin drawing their federal allotments in October 1997, less than two months after SCHIP's enactment, they had to first develop and submit a plan and have it approved by HHS. As of April 1, 1998, only six states had approved SCHIP plans. The number of states with approved plans increased to 35 by October 1, 1998, and reached 49 a year later.

While states have responded to the SCHIP legislation by substantially expanding eligibility to children (Ullman, Hill, and Almeida 1999), concerns have been raised because overall spending on SCHIP has fallen short of the federal funds that are available (Pear 1999; White House 1999). This report examines spending on SCHIP programs relative to federal allotments to states in the early years following the enactment of SCHIP and discusses the pros and cons of different options for reallocating unspent SCHIP funds.

Note: This report is available in its entirety in the Portable Document Format (PDF).



Topics/Tags: | Children and Youth | Economy/Taxes | Health/Healthcare


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