KENNEDY, HATCH RELEASE PRINCIPLES TO REAUTHORIZE CHILD HEALTH INSURANCE PROGRAM (CHIP)FOR IMMEDIATE RELEASE

Washington – Sen. Edward M. Kennedy (D-Mass.) and Sen. Orrin G. Hatch (R-Utah)today agreed on goals for reauthorizing the State Children Health Insurance Program(CHIP). The two principal authors of the original 1997 CHIP bill (P.L. 105-33), Kennedyand Hatch are committed to the goal of helping states provide insurance coverage for thechildren of the working poor – those whose parents can’t afford private insurance butmake too much to qualify for Medicaid. “No child should have to go without healthcare – that’s why Senator Kennedy and Iworked to create CHIP 10 years ago,” Hatch said. “The health care children receive whenthey are young will largely determine their quality of life for their entire adulthood. Lastyear, more than 6.6 million children enrolled in CHIP, but estimates put between 2 and2.8 million children as eligible but not currently covered by CHIP. We must reauthorizeCHIP and providing coverage for those children should be our number one priority.”“The Children’s Health Insurance Program provides effective health care for children inevery state across the country and has had dramatic impact on their young lives,”Kennedy said. “Senator Hatch and I have worked together for over a decade to help CHIPmake a difference in the lives of America’s children, and today we take up the challengeonce more. There are still too many children that need health care, and too many childrenwho suffer from preventable illness. The principles that Senator Hatch and I havedeveloped can guide effective legislation to renew CHIP, and see that it fulfills itspromise of providing quality, affordable health care for all children that need care.” Hatch and Kennedy support funding the CHIP reauthorization with an increase in thetobacco tax. The Senators shared their principles with leaders responsible for such taxpolicy: Senate Finance Committee Chairman Max Baucus (D-Mont.), Ranking MemberChuck Grassley (R-Iowa), and Finance Subcommittee on Health Chairman JohnRockefeller (D-W.Va.). Hatch is ranking member of the Health subcommittee andKennedy is chairman of the Senate Health, Education, Labor, and Pensions Committee.Congress created CHIP as part of The Balanced Budget Act of 1997. CHIP providesstates with federal matching funds to cover uninsured children of families with incomesthat are above Medicaid eligibility levels. States receive an enhanced federal match forthe CHIP program – this federal match is significantly higher than the federal match thatstates receive through the Medicaid program. All 50 states and the District of Columbiahave CHIP programs. Kennedy and Hatch’s shared principles are included in full below: Kennedy-Hatch CHIP Principles Children must be the primary focus of the CHIP program. Six million of the nine million American children who are currently uninsured areeligible but not enrolled in public coverage through Medicaid or CHIP. We proposeproviding the resources needed to states, local communities, schools, faith-basedorganizations, Indian tribes and safety net providers for outreach to eligible children andpopulations, and enrolling them in Medicaid and CHIP. We propose innovative outreach and enrollment efforts, especially those focused on hardto reach populations, including minority and underserved children, and those in ruralareas and inner cities. Incentive grants would be given to states which lower the numberof uninsured children who are eligible for CHIP. We propose the simplification of the enrollment and renewal process which often servesas a barrier for families seeking to enroll their children in CHIP. We propose adopting national pediatric quality standards to measure the quality of carethat children receive through the CHIP program. We believe that a good starting pointwould be S. 1226, the Children's Health Care Quality Act. We support states in their efforts to prevent childhood obesity, to provide access tomental health services, and to promote oral health, good nutrition and physical activityamong children. Incentive grants may be used to cover these benefits at the option of thestates. We propose eliminating existing barriers that make it difficult for states to providepremium support through CHIP for children in families with qualifying incomes thathave access to employer-sponsored coverage. We propose evaluating the current five year exclusion of lawful immigrant children andgiving states the option of covering these children. We propose giving each state the flexibility to determine the federal poverty level of thechildren who would be covered under its state CHIP program. The current system of allocating CHIP funds should be better targeted. We now have adecade of experience with the program, and with the knowledge of state spending gained,we propose allocating funds based on the individual needs of each state. No state shouldbe allowed to retain federal CHIP dollars while doing little to actually cover eligiblechildren. In addition, no state should be faced with closing enrollment or droppingchildren from the program because of a shortfall of available federal funds. We propose authorizing and appropriating sufficient funding for CHIP in order tomaintain current CHIP enrollment and to enroll those children who are currently eligiblebut not enrolled in the program. Funding should be increased to account for increases inhealth costs and increases in enrollment and eligible children. We propose funding the CHIP program through tobacco taxes.