Public Health Insurance for Children
Public health insurance for children provides low-income—and, in some states, moderate-income—children with free or low-cost health insurance coverage. The two major federal funding sources for this benefit are Medicaid and the State Children’s Health Insurance Program (SCHIP).
Medicaid is by far the larger of the two programs, serving more than 20 million children. SCHIP covers over 3 million children. Both Medicaid and SCHIP require state matching funds, although the federal government pays a larger share of the cost of care provided through SCHIP. States may use SCHIP dollars to increase children’s coverage by expanding their Medicaid programs and/or creating separate SCHIP programs. About a third of the states have implemented Medicaid expansions, another third have created separate SCHIP programs, and the rest have chosen a combination of these approaches. In addition, SCHIP and Medicaid funds may be used to subsidize the enrollment costs (or premiums) of employer-based coverage for children.
Federal requirements establish minimum income eligibility limits, minimum benefit packages, and strict limits on cost-sharing for state Medicaid programs for children. States, however, determine application procedures, which affects access to coverage. States also determine how family income is calculated, resulting in significant differences in eligibility.
Medicaid SCHIP expansion programs must meet the federal Medicaid standards, but greater flexibility is allowed in separate SCHIP programs. Benefit packages and cost-sharing provisions in these programs vary considerably. There is also significant variation in income eligibility limits for children, although as of 2009, 45 states (including the District of Columbia) had expanded coverage to reach children up to or above 200 percent of the federal poverty level ($36,620 per year for a family of three in 2009). Fifteen states (including the District of Columbia) offered coverage to parents at this earnings level, notwithstanding research showing that children are more likely to be enrolled in health insurance programs and access services when their parents are also eligible for coverage.
In addition, while Medicaid is an entitlement program that guarantees coverage to all eligible applicants (and this guarantee extends to SCHIP-funded Medicaid expansions), there is no entitlement to coverage under separate SCHIP programs.
Medicaid was enacted in 1965 to provide health insurance coverage for certain needy populations, including families receiving cash assistance, low-income children, the elderly, and the disabled. In the late 1980s and early to mid-1990s, Medicaid was gradually “de-linked” from cash assistance, beginning with coverage for pregnant women and young children. In 1996, Medicaid was fully separated from cash assistance, but with the requirement that states create a “Family Coverage Category” that offers coverage to families who meet the state’s 1996 cash assistance eligibility criteria. The following year, the SCHIP block grant was created to expand health insurance coverage for children.
National Participant & Spending Data
Data Notes and Sources
Data on Public Health Insurance for Children were compiled by NCCP in April 2009. Some state policy decisions may have changed since these data were collected.