NCPA - National Center for Policy Analysis


July 31, 2007

The Senate Finance Committee recently voted to reauthorize the State Children's Health Insurance Program (SCHIP), which covers 6.7 million children and adults.  The Senate bill would expand eligibility to children in families with incomes up to 300 percent of the federal poverty level, or $62,000 for a family of four.  House Democrats would raise income limits even higher -- to 400 percent of the poverty level ($83,000 for a family of four) -- well above the median income.

SCHIP expansion would be costly, say Devon Herrick, a senior fellow and Matt Baumann, a policy intern at the National Center for Policy Analysis:

  • The Senate bill would increase spending by $35 billion over five years and the House Democrats would increase spending by more than $50 billion. 
  • However, the additional money would mainly buy insurance for children who are already insured. 
  • In fact, the families of millions of children currently in SCHIP would have otherwise had private coverage, and most of the children that would be newly eligible already have private coverage. 
  • Furthermore, the cost of expansion would be borne by poor families and seniors.

Most uninsured children are already eligible for SCHIP or Medicaid, say Herrick and Baumann:

  • More than 8 million children lack coverage at some point during the year, and it is estimated that about 70 percent of these may qualify for public coverage. 
  • However, the duration of uninsured spells tends to be short, and only 4.9 million children are uninsured for the entire year.  

According to the Congressional Budget Office (CBO), of the children who are uninsured for an entire year:

  • More than one million children currently qualify for public coverage but are not enrolled.
  • Another 1.1 million do not qualify because they are illegal (or temporary) immigrants.
  • About 403,000 are income-eligible immigrants who have not been legal residents long enough to qualify for Medicaid benefits.

Source: Devon Herrick and Matt Baumann, "SCHIP Expansion: Robin Hood in Reverse," National Center for Policy Analysis, Brief Analysis No. 589, July 31, 2007.

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