By Crystal D. Swann
February 23, 2009

On February 4, President Barack Obama signed an expansion of the very popular children’s health insurance bill, Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA). The Children’s Health Insurance Program (CHIP) continues coverage for 7 million children whose families make too much to be eligible for Medicaid but don’t make enough for private insurance; expands coverage for an additional 4 million uninsured children; makes legal immigrant children and pregnant women eligible for coverage. The law provides an additional $33 billion over the next four and half years for both CHIP and Medicaid programs fiscal incentives for states to reach children who are eligible for enrollment.

In a press release, The Conference of Mayors commended President Barack Obama and Congress for taking a bold step towards providing healthcare for all children. “In these tough times it is important to assure families that the loss of a job doesn’t mean the end of health benefits for their children,” stated Tom Cochran, CEO and Executive Director. “And the Conference of Mayors remains committed and looks forward to working with President Obama and Congress to ensure that all Americans have access to quality and affordable health care.”

Medicaid and CHIP together have been extremely successful in reducing the rate of low'income children who are uninsured. Both programs are designed at matching programs but a key difference between the two programs is that Medicaid is an entitlement with open ended federal funding while CHIP is a capped entitlement and capped funding is sent nationally and by state.

The original CHIP law gave states the flexibility to set the income eligibility level for children in their state, although in August 2007, a directive issued by the Centers for Medicare and Medicaid Services (CMS) sharply limited that flexibility. On February 4, 2009, the President directed the Secretary of Health and Human Services (HHS) to rescind the CMS directive. The new CHIP law also retains state flexibility to set income eligibility levels, but reduces the matching rate that the federal government will provide for new expansions to children above 300 percent of the federal poverty level (FPL) from CHIP to Medicaid levels.

The CHIP law includes several changes in benefits such as requiring state plans to include dental benefits; focus on quality and access; and the creates of a new commission that will look at access and payment policies from both Medicaid and CHIP. Additionally there is a provision that allocates $100 million for outreach enrollment activities by public and private entities. The bill is paid for with a .62 cent per pack cigarette tax. As a final note, the program’s name has officially been changed from SCHIP (State Children’s Health Insurance Program) to CHIP (Children’s Health Insurance Program) as it was in the original 1997 legislation