Bookmark and Share

February 2009

Obama Signs CHIP Renewal

On February 4, 2009, President Obama signed into law the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) which strengthens and extends the Children’s Health Insurance Program (CHIP) with an additional $32.8 billion over four and a half years—through fiscal year 2013.  The measure reflects the bi-partisan agreement that was reached in 2007.  It expands funding for coverage for children—including seven million children already in the program and an additional four million by 2013—and pregnant women, while restricting use of CHIP funds for parents. CHIP will be funded by a $ 0.62 per-pack increase in the federal cigarette tax.[1]

Key CHIPRA provisions include the following:[2]

  • Significant new CHIP funding through fiscal year 2013—markedly increases CHIP allotments and makes changes in the state funding formula to reflect actual use of CHIP funds.
  • Initiatives to enroll the lowest-income uninsured children in coverage—introduces new tools and a state performance bonus system to encourage the enrollment of already-eligible uninsured children in coverage, along with an increase in federal funding for outreach.
  • State options to cover legal immigrant children and pregnant women—states can eliminate the five year waiting period imposed on lawfully residing immigrant children and pregnant women in Medicaid and CHIP.
  • State options to cover pregnant women—establishes a new, explicit statutory option to cover pregnant women with CHIP funds by submitting a state plan amendment. The eligibility level can be established up to but no higher than state’s income eligibility for children.
  • New rules on covering moderate-income children—rescinds the CMS directive that prohibited flexibility among the states to set the income eligibility level for children in their state, but also reduces the matching rate that the federal government will provide for new expansions to children above 300 percent of the federal poverty level (FPL) from the enhanced CHIP rate to Medicaid rates.[3]
  • Elimination of adult coverage—eliminates the authority of U.S. Department of Health and Human Services to grant CHIP waivers for family-based coverage and phases out existing CHIP waivers that allow states to cover parents and childless adults.
  • New provisions for premium assistance—includes provisions that reduce barriers for states when implementing premium assistance programs and that ensure premium assistance programs are cost-effective and provide children benefits that are equivalent to what they would receive if enrolled directly in the state’s CHIP program.
  • Improvement in the quality of care and benefits for children—establishes an initiative to improve the quality of care by developing and disseminating child-specific health quality measures, encouraging the creation of electronic medical records for children, and instituting demonstration projects on quality improvement and health information technology for children’s care.  The law also strengthens dental coverage for children in CHIP, including requiring states to provide dental services in their CHIP plans.

While the national CHIP allotments are divided among states and territories according to a new statutory formula, the new state-specific allotments involve a formula which distributes the available CHIP funds among states based mainly on their actual use of and need for such funds.  This stands in contrast to the original formula which was primarily based on a state’s share of uninsured low-income children and did not take into account actual state spending. 

For more detailed information about key provisions and national and state funding allotments under CHIPRA, please refer to the Summary of the CHIP Reauthorization Law written by the Georgetown University Center for Children and Families.