H.R. 976 (Senate-passed bill)

Reauthorization of SCHIP and State Allotments
Appropriates $9.125 billion in funds for FY08, and increasing annual amounts are specified up to $16 billion in FY 2012.

Changes formula for state allotments to reflect actual or projected spending and increases funding to territories. Allotments available to states for two years. A contingency fund would be created to cover state shortfalls associated with children, pregnant women, and parents of low-income children. Costs of Medicaid presumptive eligibility for children would no longer count against SCHIP allotments.

Additionally, an incentive pool would be created out of appropriated funds not otherwise allotted to states and unexpended state allotments. States that have increased enrollment of children in Medicaid above a baseline (growth in population of low income children plus 1 percentage point) would be eligible in 2009 for a bonus of $75 per child for increases up to 2% above the baseline, $300 per child for enrollment between 2% and 5% above the baseline and $625 per child for enrollment beyond that level. Bonus amounts would be indexed for inflation in future years, and bonuses would be subject to availability of funds in the pool.

Coverage Expansions
Provides states the option of covering pregnant women up to the state’s income eligibility level for children and automatic enrollment of newborns.

Limits the SCHIP enhanced matching rate to children in families with incomes below 300% of the FPL (including any income not counted by the state in determining SCHIP eligibility), unless the state has an approved waiver or plan amendment in effect on the date of enactment. The Medicaid matching rate would apply to children above this income level.

Makes several changes to limit coverage of parents and childless adults under SCHIP. Approval or renewal of waivers providing coverage of nonpregnant childless adults would be prohibited, and existing coverage phased out by the end of fiscal year 2008. States may continue coverage for such individuals enrolled in 2008 through 2009 at the Medicaid matching rate with a fixed amount of the state’s federal allotment set aside for this purpose, and may apply for a Medicaid waiver to continue coverage of this population.

Similarly, approval or renewal of waivers providing coverage to parents of low-income children would be prohibited, and existing coverage phased out by the end of fiscal year 2009. States may continue coverage with a fixed amount of the state’s allotment set aside for this purpose, and the federal matching rate would be reduced in 2010 unless a state meets certain coverage benchmarks for children. In 2011 and 2012, states that meet the benchmarks would receive federal matching rates set between the Medicaid and SCHIP amounts; other states would receive the Medicaid matching rate only.

Other changes to SCHIP or Medicaid coverage for children
Requires coverage of mental health services so that financial requirements and treatment limitations are no more restrictive than for other benefits.

Establishes a dental health grant program to assist states in improving dental coverage for children under SCHIP, with $200 million in funds appropriated for 2009-2012.

Provides state option to offer a premium assistance subsidy if the employer contributes at least 40 percent of the premium and the plan meets other requirements. High deductible and flexible spending account plans would not qualify. States must meet a cost effectiveness test by demonstrating that the cost of premium assistance is less than the cost of SCHIP for the individual child or family or in the aggregate, and must provide supplemental coverage to ensure that SCHIP benefits and cost sharing protections are met. States must provide outreach assistance for children likely to be eligible and employer plans must permit enrollment of children with premium assistance subsidies.

Outreach and enrollment
Provides $100 million for 2008-2012 for grants to increase participation of children eligible for Medicaid or SCHIP, with 10% set aside for a national enrollment campaign and 10% set aside for enrollment of children who are Indians.

Other provisions
Requires the Secretary of HHS to develop core pediatric quality measures for children in Medicaid and SCHIP and encourage voluntary reporting by states. Over 2008-2012, appropriates $20 million for these activities, $20 million for a program of grants to states and child health providers related to improving quality and use of information technology, $5 million for a model electronic health record for children enrolled in Medicaid or SCHIP, and $25 million for a childhood obesity demonstration project.

Financing
The Congressional Budget Office estimates the bill to have a 10-year cost of $71 billion financed by increased tobacco taxes, a one-time change in timing of corporate income taxes in 2012, and lowering baseline spending for SCHIP in 2013 and beyond.

Effective Date
Generally, October 1, 2007.