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The State Children’s Health Insurance Program (SCHIP) was established in 1997 as part of the Balanced Budget Act of 1997 (BBA). In conjunction with Medicaid, SCHIP has helped to reduce the number of low-income uninsured children by broadening eligibility requirements and simplifying enrolling procedures.
Having been established as a decade-long program, SCHIP required the passage of a reauthorization bill in the fiscal year 2007.
Both houses of Congress passed this Act in 2007, with bipartisan support for the expansion of SCHIP. The bill would have increased coverage to more than 4 million more beneficiaries by 2012. The bill would have also called for an increased budget of $35 billion, over five years, raising the total SCHIP budget to $60 billion.
However, the opposition to this bill maintained focus on the increase in government health insurance of $35 billion and the illegal immigrants Medicaid benefits costing $6.5 billion.
President Bush vetoed the bill on October 3, 2007, with the concern that passing the bill would "federalize health care", and expand the scope of SCHIP beyond than its original concern.
On October 18, 2007, the House of Representatives required a two-thirds majority to overturn the president’s veto but fell 13 votes short (273-156), despite even 44 Republicans joining the 229 Democrats in support of the measure.
A second revised version of CHIPRA was passed within 7 days of the failed veto override vote by the House and Senate. This bill was set to address key concerns that the initial bill did not touch upon such as: income eligibility, crowd-out, and the treatment of immigrants, childless adults, and parents.
In response, the revised bill would prohibit SCHIP for coverage of children beyond three times the poverty level, require more extensive verification of citizenship status, require all states to implement best practices to limit crowd out, and encourage premium assistance options.
A House vote in January 2008 failed to override the President’s veto once again and this resulted in the temporary funding of SCHIP through December 14 at current levels that were not sufficient to fund most states to maintain coverage of children currently enrolled. Like the previous bill, this continued to rely on a rise in tobacco tax to pay for an increased $35 billion for children’s coverage.
Public Law 110-173 was ultimately passed by congress, which extended SCHIP funding through March 31, 2009, and the President signed it into law on December 21, 2007. Despite being signed into law, this two-year reauthorization bill would merely extend current SCHIP services without actually expanding any aspect of the program.
Following President Barack Obama's inauguration and with the increased Democratic majority in both houses of Congress, there was a quick move to interrupt the political impasse over SCHIP extension. The House passed on a vote of 290-138 on January 14, 2009.
The bill sanctioned expansion of the health coverage program to include approximately 4 million additional children (including legal immigrants) by spending an additional $32.8 billion. On January 29, the Senate approved the house bill with two amendments which was accepted by the House and signed by President Obama on February 4, 2009, to take effect on April 1, 2009. This reauthorization lasts through the end of September 2013.
In 2010 Congress passed the ACA, extending SCHIP funding through 2015.
Though funding was only appropriated through September 2015, the ACA contains a Maintenance of Effort (MOE) clause that requires states to continue offering Medicaid and SCHIP at the established (2010) levels until 2019. This MOE would have a slightly different effect in each state depending on the SCHIP program structure, but it will ultimately force Congress to consider reauthorizing SCHIP funding for at least four more years (starting in 2015) or else alter the MOE.
On April 16, 2015, President Obama signed this into law as the largest reform in the American health care system since the Affordable Care Act in 2010. Not only does it extend SCHIP for two years but it also cuts Medicaid spending and improves the way Medicare doctors are reimbursed. Furthermore, the legislation renews funding for other programs such as the Maternal, Infant, and Early Childhood Home Visiting Program.