Enabled under Title XXI of the Social Security Act, the State Children’s Health Insurance Program (CHIP) is providing $24 billion in funding to states over a five-year period to provide health insurance to uninsured children. The purpose of the law is to assist states in initiating and expanding children’s health assistance programs to uninsured, low-income children. The primary objective of Title XXI, to expand coverage for uninsured children, allows states to expand coverage beyond current Medicaid eligibility limits. This assistance can be provided through one of three methods: (a) a program to initiate and expand the provision of health care assistance via a separate State Insurance Program; (b) a Medicaid expansion; or (c) a combination of these methods. Coverage includes children under age 19 not eligible for Medicaid with family incomes below 200% of the federal poverty level or 50% above the current state Medicaid limit. State expansions could begin as early as October 1, 1997. Each state is eligible to receive a portion of the total amount, and allotments remain available for up to three years.
As a result of the enactment of Title XXI, states are faced with the challenge of designing and implementing programs that will increase the enrollment of eligible children without encouraging the substitution of employer-sponsored insurance. The complexity of family decisions, state policy objectives, and program design may impact the ability of a program to meet its intended goals. For example, states must consider the complexity of family dynamics as decisions to enroll in health insurance programs are based on the affordability of plans, the comprehensiveness of benefit packages, and the health status of their children, among other factors. Likewise, decisions regarding how and to what extent to expand coverage for uninsured children will be made in the context of broader state policy objectives and existing state programs. Existing and potential policies regarding insurance reform, efforts to assist employers in providing coverage, potential substitution of private coverage, and state social and economic policies are likely to be examined in the broader context of planning for expanded children's coverage. Additionally, the overall design of a state program will impact its ability to conduct outreach and enroll eligible children. The experiences presented in this resource book provide information and an historical context for states developing programs under Title XXI.