Children’s Health Care Benefits: A Key Issue in SCHIP Reauthorization

Publication Date: June 2007

Publisher: Center for American Progress

Author(s): Karen Davenport

Research Area: Health

Type: Report

Abstract:

As Congress faces reauthorization of the State Children’s Health Insurance Program, it is grappling with several contentious issues, including funding levels, formula allocations, enrollment requirements and program eligibility. The SCHIP benefit design, including covered benefits and cost-sharing structures, was an important issue during initial authorization in 1997 but has received relatively little attention in this year’s debate.

Several parties, including conservative think tanks and insurance industry stakeholders, have advanced proposals that would have a significant impact on the benefits low-income children may receive. In particular, two of their suggestions should prompt a reconsideration of how Medicaid, SCHIP and private coverage benefit packages meet low-income children’s health care needs to various degrees: that some portion of SCHIP reauthorization funding should be used for tax credits or other mechanisms to finance private coverage; and that state SCHIP programs should place more emphasis on enrolling children in private or employer-based coverage.

Neither of these approaches will strengthen the SCHIP program’s ability to provide low-income children with critical health coverage. Policy choices that would use SCHIP funding for tax credits or programs to purchase private coverage would leave low-income children and their families with coverage that does less to meet their needs yet requires greater out-of-pocket contributions from these families. Instead, policymakers should seek to bolster efforts to provide children with appropriate coverage that meets their medical and developmental needs.