Finance Globe

U.S. financial and economic topics from several finance writers.
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Children's Health Insurance Program Expanded to Cover 11 Million

President Obama signed the Children's Health Insurance Program Reauthorization Act last night, which renews the health care plan known as SCHIP (state children's health insurance program) for 7 million children and opens it up to 4 million more.

Obama said before signing the legislation, "In a decent society, there are certain obligations that are not subject to tradeoffs or negotiations, and health care for our children is one of those obligations."

"But, as I think everybody here will agree, this is only the first step," he said. "The way I see it, providing coverage to 11 million children through SCHIP is a down payment on my commitment to cover every single American. And it is just one component of a much broader effort to finally bring our health care system into the 21st century. And that's why the Economic Recovery and Reinvestment Plan that's now before Congress is so important."

President Obama stressed the need to pass the economic package quickly. "Now, think about this -- if Congress passes this recovery plan, in just one month, we will have done more to modernize our health care system than we've done in the past decade," he said.

The children's health care legislation that Obama signed was vetoed twice by George W. Bush during his presidency - he had said that he believed it would "federalize health care." Bush approved funding for the current plan until March 31 this year, but the new legislation makes the health care program permanent.

SCHIP is designed to close the gap that many families fall into. For those without employer provided health coverage, the cost of private health insurance is often just to high to pay for it out-of-pocket. But millions of families have an income too high to qualify for Medicaid, even though they have a modest income and are struggling to make ends meet.

For parents, SCHIP can mean the difference between having health insurance for their children, or taking the chance without it and hoping that their children will never become dangerously ill or seriously hurt.

Each state has their own income requirements, but federal guidelines require a minimum income eligibility level for children under age 19 at 200% of the poverty line. The federal poverty line for a family of four in 2009 is $22,050 - and more for residents of Alaska and Hawaii. So the children would qualify by federal guidelines if the family's annual income was less than $44,100. Some states allow up to 300% of the poverty line, and the insurance premiums are on a sliding scale based on income.

SCHIP provides families with affordable health care coverage for children under 19 and pregnant women, though some states have opened coverage to adults under the earlier SCHIP program. The new legislation phases out coverage for childless adults and parents over the next couple of years.

The new legislation also allows coverage of children of legal immigrants even before the previously required five-year waiting period - if the state chooses to.

The expanded program will likely bring additional health benefits for Americans. Funding for the program will be raised by increasing the excise tax on tobacco products by 61 cents. That may just be enough to encourage some to quit smoking, and possibly deter some from ever starting to begin with.

If you wonder whether your family qualifies for health insurance through the program, contact your state's medicaid office to find out the income guidelines. Upon applying, you'll need to provide proof of your annual income with last year's tax return or several pay stubs.

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Monday, 27 May 2024

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