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State Children's Health Insurance Program (SCHIP)

The Balanced Budget Act (BBA) of 1997 amended the Social Security Act to include Title XXI, the State Children's Health Insurance Program (SCHIP). Designed to provide increased access to health coverage for children in families with income too high to qualify for Medicaid (Title XIX) but too low to afford private coverage, SCHIP provides billions of dollars in match funds to states.

SCHIP offers states significant flexibility in the design and management of their SCHIP programs. States may: 1) expand Medicaid to include children in families with incomes higher than those served by their Medicaid program; 2) create a separate State program; or 3) create a program that combines the two. The target group for coverage is uninsured children in families at or below 200% of the Federal Poverty Level (FPL).

When the BBA was passed in August of 1997, Ohio had recently passed its SFY 1998-1999 biennial budget, which included funding and authority to expand Medicaid eligibility for children to 150% of FPL. With the state budget initiative as the basis, Ohio opted to implement SCHIP as a Medicaid expansion of the Healthy Start program. Healthy Start is Ohio's health coverage program for children and pregnant women, and it has existed since 1989.

Under Title XXI, the federal government matches state spending for SCHIP at a higher rate than that for Medicaid. The Department of Health and Human Services (HHS) is required to calculate and publish figures for the Federal Medical Assistance Percentages (Medicaid) and Enhanced Federal Medical Assistance percentages (SCHIP) annually. The FMAP percentages are available online: http://aspe.hhs.gov/health/fmap.htm.

Because SCHIP is for uninsured children, the Ohio SCHIP Medicaid expansion was combined with a regular Medicaid expansion. Uninsured children in the expansion population are covered by SCHIP, and their services are reimbursed at the SCHIP enhanced rate. Under-insured children are covered by regular Medicaid, and get the regular Medicaid match rate.

The Healthy Start expansion to 150% of FPL was implemented on January 1, 1998. In July of 2000, Ohio further expanded Healthy Start under SCHIP. This expansion raised the income limit for eligibility to 200% of FPL. For this second SCHIP expansion, there was no complementary Medicaid expansion for under-insured children, so children in this income range (151-200% of FPL) must be uninsured to be eligible.