SCHIP Reauthorization Principles
In anticipation of a potential vote to reauthorize and expand the State Children’s Health Insurance Program (SCHIP), the Republican Conference has prepared a series of principles, based on those articulated by House Republicans in the 110th Congress when considering similar legislation, that Members may want to consider in weighing a vote on legislation—along with an analysis of how the Democrat bill comports with those principles.
SCHIP Must Serve Poor Children First
- SCHIP was passed by a Republican Congress, and signed into law by a Democrat President, as a program to provide health insurance to low-income children. Republicans believe that SCHIP should maintain its focus on low-income populations—that states should cover poor children first.
Some Members may be concerned that the bill falls short of this principle:
- The bill restricts states from benefiting from the higher SCHIP matching rate for children in families making more than three times federal poverty rates—but the bill places no substantive restrictions on states’ ability to circumvent this restriction by disregarding (i.e. ignoring) some or all of beneficiaries’ income, making the notion of an income “cap” on SCHIP participation more fact than fiction.
- The bill’s “cap” exceeds by 50% the threshold for targeted low-income children established by the first SCHIP bill in 1997—a significant expansion of the program’s intended parameters allowing children in families making $65,000 (or more if states “disregard” certain income sources, as they are permitted to do) to enroll in government-funded health insurance.
SCHIP Should Not Force Children Out of Private Health Insurance
- Republicans believe that SCHIP should serve as a backstop for low-income children without other access to health insurance—and should not encourage families to drop their private insurance coverage in order to enroll in a government program.
Some Members may be concerned that the bill falls short of this principle:
- According to the Congressional Budget Office, the bill would result in 2.4 million individuals dropping private health insurance coverage to enroll in government programs—a phenomenon known as “crowd-out”.
- The bill does not require states to establish premium assistance programs that would allow workers with access to employer-sponsored coverage to use State funds to subsidize their existing coverage—which could result in families dropping private health insurance in order to join a government-run SCHIP program.
SCHIP Should Serve Low-Income American Children
- Republicans believe that SCHIP should contain reasonable verification standards that ensure that only eligible recipients receive access to health benefits funded by federal taxpayers.
Some Members may be concerned that the bill falls short of this principle:
- The bill permits States to avoid verifying applicants’ citizenship through a birth certificate or other documentation (as under current law), relying instead on a match of applicants’ names and Social Security numbers—which the Social Security Commissioner has said would simply result in illegal aliens using false Social Security numbers to obtain federal benefits.
- The bill would impose no penalties on States for enrolling illegal aliens in the SCHIP program unless and until error rates exceed a specified percentage—and permits the Secretary of Health and Human Services to waive any state penalties that may apply.
- The bill rolls back the current five-year waiting period—passed by a Republican Congress, and signed into law by a Democrat President—for legal aliens to apply for Medicaid and SCHIP, potentially encouraging individuals to migrate to the United States for the sole or primary purpose of obtaining federal health benefits.
SCHIP Funding Should Be Stable and Should Not Require Tax Increases
- Republicans believe that American working families should not be subjected to a tax increase amounting to tens of billions of dollars to finance expansions of government health programs. Republicans also believe that SCHIP’s funding should not rely on budgetary gimmicks that could result in massive tax increases in future years.
Some Members may be concerned that the bill falls short of this principle:
- The bill relies on a 62-cent increase in tobacco taxes—a regressive tax, which disproportionately falls on poorer American families and a declining source of revenue.
- The bill contains a funding “cliff”—a 66% reduction in funding in the authorization’s final year that no one believes will actually occur, but was included in the bill to avoid a PAYGO point of order in the House.
SCHIP Should Provide Families with Choices
- Republicans believe that SCHIP should provide all eligible families with premium assistance programs or similar options that will allow families to choose the high quality plans that meet their needs.
Some Members may be concerned that the bill falls short of this principle:
- The bill does not require States to establish premium assistance programs as part of SCHIP, and thus does not ensure that all children with access to employer-sponsored coverage will be able to maintain their current coverage.
- The bill prohibits the Centers for Medicare and Medicaid Services (CMS) from approving any new Health Opportunity Account demonstration projects, denying beneficiaries the chance to participate in this purely voluntary and innovative program established by a Republican Congress as part of the Deficit Reduction Act.