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The State Children’s Health Insurance Plan (SCHIP) was a program intended for children in families with too high an income to qualify for Medicaid but too modest to afford private insurance (approximately 100%–200% of the federal poverty level) . At the time of its implementation, the target subpopulation of this program was disproportionately uninsured.
Senator Kennedy was a key founding figure in SCHIP. Its legislation was inspired by a children’s health insurance plan in Massachusetts in 1996. In this year, a major health law was passed to authorize the expansion of health insurance coverage for children and restructure the state’s Medicaid program.
Senator Kennedy worked closely with many officials to obtain a necessary Medicaid waiver from the Clinton Administration. Following this, the state was able to expand its health coverage and to finance this expansion through savings redirected from a more efficiently functioning and redesigned Medicaid program.
Senator Kennedy used this Massachusetts children’s health expansion as a model for a national program and wrote much of the bill, which would raise the Federal tax on tobacco products as a source of funding for health care for children.
At the same time, First Lady Hilary Clinton’s interest had also been roused by children’s health policy. SCHIP was a prominent presence in the second-term of the Clinton administration. Their first attempt to reform health care was in the form of President Bill Clinton’s 1997 State of the Union address, which proposed a new health initiative for kids, with the stated goal of covering up to five million children. The failure of this bill did not deter the pursuit for health reform; the First Lady aligned herself with Kennedy’s cause.
In March 1997, Senator Kennedy sought support from Republican Senator Orin Hatch from Utah as a co-sponsor for the legislation. The two had already worked as a pair on legislation concerning issues such as public health, AIDS, scientific research, child care and civil rights for the disabled population. Unfortunately, the bill was initially unsuccessful as it failed to comply with the existing balanced budget resolution between Congress and the White House.
The bill was revived by Kennedy and Hatch a month after its initial defeat with recurring support from the First Lady and even children’s health advocates such as the Girl Scouts of the USA and Children’s Defense Fund. With such overwhelming public pressure on Congress, SCHIP was finally passed and signed into law by President Bill Clinton on August 5, 1997, as part of the Balanced Budget Act of 1997 (BBA).