Funding Children’s Health Insurance Program


Children’s Health Insurance Program (CHIP), previously known as the State Children’s Health Insurance Program (SCHIP) is a program administered by the United States Department of Health and Human Services (HHS) that provides matching funds to states for health insurance to families with children. The program was designed with the intent to cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid. In February 2009, the CHIP Reauthorization Act of 2009 was approved by Congress and signed by President Obama, with a $35 billion expansion funded by an increase in the federal tobacco tax by 61 cents per pack.

The problems with funding expansion of the program by increasing tobacco tax are:

  • Majority of smokers are in low-income family class that SCHIP and Medicaid are trying to help.
  • Increasing tobacco tax would further reduce the number of smokers that are already declining, thereby eroding the funding source.
  • It’s estimated that to produce the revenues to fund SCHIP expansion would require 22.4 million new smokers by 2017.

An expensive program should not be funded by a small, low-income minority like cigarette smokers, focusing SCHIP on low-income children only is not an option for the solution either, because health is basic human right and all children should have health care coverage. Therefore, Congress should work on a broader strategy to fund the program: reallocate federal budget, move war funding to SCHIP; raise fast food restaurant taxes; raise income taxes gradually.


3 Responses to “Funding Children’s Health Insurance Program”

  1. sharrisdoc Says:

    I agree that appearances are that the program is funded on sublimally encouraging a detrimental health practice, however I feel that the financial burden of the taxation should be exclusively directed at the alcohol and tobacco industries. I am not an economist, however I would like to propose a plan that would prohibit these industries from passing on expenses to the consumers in this instance. We must also realize that even though the financial burden has been passed on to low income people, this may help to motivate them from smoking which is an indirect health promotion activity. In general I loved this blog, thank you.

  2. socialbehaviorsjhublog Says:

    I partially agree with the comment above, but it is clear that the administration needs to identify alternative funding for this important program — including outside of alcohol and tobacco. As pointed out in the blog, the number of smokers would have to significantly increase each year to adequately fund this program. Providing incentives for people to lead healthier lives in general will save money and allow more funding to go to programs like S-CHIP — but it does take time and it must be a priority. Fast food tax is one example — making it easier to make meals inside the home, or educate people who have the resources about how easy and cheap it can be to make a healthy meal rather than depending on fast food. While it is easier said than done, rather than focusing in on an already shrinking resource of funds, there is an opportunity to tax other “unhealthy” lifestyles in the shorter term until a longer term solution is implemented. I also enjoyed this blog!

  3. Heart Necklace : Says:

    of course health insurance is very much essential for your own sake`:,

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