Human Services News

From Center on Budget and Policy Priorities:

New Congressional Budget Office estimates show that by 2012, a total of 3.8 million children who otherwise would be uninsured would have health care coverage under the bipartisan agreement reauthorizing the State Children's Health Insurance Program (SCHIP) developed by House and Senate negotiators.

CBO consequently estimates that a total of about 3.2 million of these 3.8 million children --- or 84 percent of them --- are children who have incomes below the current eligibility limits that states have set.

Key elements of the bipartisan agreement would extend the SCHIP program for five years and raise SCHIP funding levels both to enable states to sustain existing children's enrollment and to cover more low-income children.

The agreement also would provide financial incentives to states to enroll more uninsured children who are already eligible for Medicaid or SCHIP.

According to CBO, the various provisions to maintain and expand children's health coverage would cost $34.9 billion over five years, with these costs fully offset by an increase in federal tobacco taxes.

In fact, the CBO estimates show the bill would reduce the deficit by $1.4 billion over the next five years.

The agreement would provide significantly larger financial incentives to states to enroll poor and near-poor uninsured children who are eligible for Medicaid than to enroll uninsured children who are eligible for SCHIP (and whose incomes, while generally low, are higher than those of children eligible for Medicaid).

A crowd-out effect of about one-third is regarded by many experts as modest.

For example, in describing the crowd-out levels under the House-passed bill, which also had a crowd-out effect of about one-third, CBO director Peter Orszag has stated that he "has not seen another plan that adds 5 million kids to SCHIP with a 33 percent crowd-out rate.

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