The Reauthorization of the State Children's Health Insurance Program (SCHIP): Implications for Pennsylvania

  • May 08, 2007
  • By Judith R. Lave, BA, Ph.D, Sara Rosenbaum, and J.D.

The Balanced Budget Act of 1997 established the State Children's Health Insurance Program (SCHIP), one of the most significant health-system reform initiatives for children since the Medicaid expansions throughout the 1980s and 1990s. The SCHIP legislation allocated $40 billion to the states over a 10-year period, in order to provide health insurance to children who would otherwise be uninsured. In March 2007, 154,994 children were covered under the program in Pennsylvania.

SCHIP has enjoyed considerable bipartisan support and is being considered for reauthorization this year. Although there appears to be no question that it will be reauthorized, many details of the form and direction the program will take remain undecided, especially questions regarding total funding levels and state flexibility to cover both children and certain adults. At this point in time, there are significant differences in opinion among the president, governors, members of Congress, and advocates about what desirable SCHIP policy looks like. The ultimate framework will have an important influence on the nature of the decisions that states, including Pennsylvania, will make with respect to extending health insurance.

In this report, we provide the background behind the original SCHIP legislation and some of the basic decisions that were made in developing its framework. We describe the interrelationships between Medicaid and SCHIP and examine the basic funding structure for the program. Next, we examine some of the decisions that Pennsylvania has made in designing its program, and we compare its decisions with those of other states. We then present data on the number of children covered (both in the state and nationally) and examine the program's impact on children's access to healthcare. With this framework in mind, we turn to the types of decisions that will be made in the reauthorization and the implications of some of these decisions for Pennsylvania.