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October 2007

SCHIP Reauthorization Act of 2007

The future of the State Children’s Health Insurance Program (SCHIP) is still uncertain as the House failed to override the President’s veto of compromise legislation that would have reauthorized and expanded the program. Supporters of the bill were 13 votes short of overriding the veto.  If passed, the legislation would have provided an additional $35 billion in funding for the program over the next five years and increased total SCHIP spending to $60 billion.  Additional funding would have been paid for by a 61 cent per-pack increase in the tobacco tax.[1] 

President Bush vetoed the legislation on October 3, 2007. Following the failure of the veto override attempt, House speaker Nancy Pelosi said work would begin immediately on a new bill, and it is the intention of Democratic leaders to have a new draft of the bill within two weeks.[2]  At the time of publication, a vote for a revised bill has been scheduled for the afternoon of October 25.  Until mid-November, SCHIP operates under a Continuing Resolution intended to maintain existing enrollment until a compromise can be reached.[3]

In addition to enhanced funding, the bill that was vetoed included numerous changes to the current SCHIP program[4] including:

  • Restricts enhanced matching rates for states that expand eligibility beyond 300 percent of the federal poverty level (FPL);
  • Allows new options for pregnant women but would restrict coverage for both parents of SCHIP children and childless adults, but allows states that had previously covered those adult populations to transition them off SCHIP over time;
  • Prohibits states from having the option of expanding coverage to legal immigrant children or pregnant women who have been in the country for less than five years;
  • While still requiring citizenship documentation, as required under the Deficit Reduction Act (DRA), allows some flexibility in complying with that requirement;
  • Creates financial incentives for states to enroll eligible children;
  • Requires certain crowd-out provisions if states expand coverage above 300 percent FPL;
  • Makes certain benefit design and reimbursement changes to the program; and
  • Provides additional funding to encourage quality measurement and improvement activities as well as activities related to combating obesity and developing electronic medical records.


[1] “House fails to override veto of SCHIP legislation,” Kaiser Daily Health Policy Report, October 19, 2007

[2] “House fails to override veto of SCHIP,” The Boston Globe, October 19, 2007

[3] “States may reduce number of children in insurance plan,” The Washington Post, October 16, 2007

[4] The Kaiser Commission on Medicaid and the Uninsured, “Children’s Health Insurance Program Reauthorization Act of 2007 (CHIPRA),” October 2007.