The Balanced Budget Act of 1997 ( P.L. 105-33 , BBA-97) established the State Children's Health Insurance Program (CHIP) under a new Title XXI of the Social Security Act. CHIP builds on Medicaid by providing health care coverage to low-income, uninsured children in families with incomes above applicable Medicaid income standards. Official numbers show that CHIP enrollment reached a total of nearly 7.4 million children and nearly 335,000 adults in FY2008. In FY2008, federal CHIP spending totaled $7.0 billion, with states' projected spending expected to equal $7.9 billion in FY2009. In BBA 97, Congress authorized and appropriated funds for FY1998-FY2007, with no federal appropriations slated for FY2008 and beyond. The absence of future federal appropriations triggered CHIP legislative attention during the 110 th Congress. One of the first acts of the 111 th Congress was to reauthorize the program. On February 4, 2009, President Obama signed the Children's Health Insurance Program Reauthorization Act of 2009 ( P.L. 111-3 , CHIPRA) into law. This report summarizes the changes to prior law made by CHIPRA, including a national appropriation for CHIP allotments totaling $68.9 billion over five years, distributed to states and territories using a new formula primarily based on their past and/or projected federal CHIP spending. For FY2009 onward, annual allotments would be available for two years, with unspent funds available for redistribution first to shortfall states and then toward bonus payments, described below. a new contingency fund (for making payments to states for certain shortfalls of federal CHIP funds), which receives deposits through a separate appropriation each year through FY2013, and makes payments of up to 20% of the available national allotment for CHIP for each eligible shortfall state; new performance bonus payments (for states exceeding certain child enrollment levels and states that implement certain outreach and enrollment initiatives), which are funded with a FY2009 appropriation of $3.225 billion and deposits of certain unspent CHIP funds through FY2013; additional grants for outreach and enrollment totaling $100 million each year through FY2013; provisions to remove barriers to enrollment including a state option to rely on findings from specified "Express Lane" agencies for eligibility determinations in Medicaid and CHIP; a state option to extend coverage to pregnant women under CHIP through a state plan amendment when certain conditions are met; provisions to terminate CHIP adult coverage waivers, and establish conditions to continue existing waivers under Medicaid; a state option to waive the five-year bar for Medicaid or SCHIP coverage to pregnant women and children who are lawfully residing in the United States and are otherwise eligible for such coverage; provisions to provide a specific alternative for states to verify proof of citizenship, and a requirement for citizenship documentation in SCHIP; provisions related to benefits (e.g., dental, mental health); a state plan option for premium assistance to enroll in employer-based health insurance, and elimination of barriers to providing premium assistance; provisions to strengthen quality of care and health outcomes of children; a Medicaid and CHIP Payment and Access Commission; program integrity and miscellaneous provisions, including some that affect the Medicaid program; and tobacco tax changes. The Appendix provides a summary of the major CHIP legislation during the 110 th and 111 th Congresses. The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA, H.R. 2 ) was passed in the House on January 14, 2009, and an amended version was passed in the Senate on January 29, 2009. On February 4, 2009, the House passed H.R. 2 (as amended by the Senate), and later that day President Obama signed the bill into law as P.L. 111-3 , the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA). One of the provisions of CHIPRA permits using CHIP as the program's acronym, instead of SCHIP. This report reflects this change, using CHIP instead of SCHIP. CHIPRA is effective April 1, 2009, which is the beginning of the second half of the federal fiscal year. States will be given additional time to come into compliance with the requirements of CHIPRA, if applicable, based on the timing of state legislative sessions. If FY2009 CHIP allotment amounts provided for the first two quarters of FY2009 have not been obligated, they will be rescinded and will effectively be replaced with funding provided in this act. The amount of allotments provided under CHIPRA in the second half of FY2009 will be reduced by spending that occurred from a state's FY2009 allotment in the first half of the fiscal year. Provisions in the act will be considered effective on the dates specified regardless of whether implementing regulations have been issued. In addition, states cannot be denied Medicaid and CHIP payments if they acted in good faith reliance on the provisions of the act, even if those expenditures do not comply with the final regulations ultimately issued. Cost estimates from the Congressional Budget Office (CBO) indicated that CHIPRA would increase outlays by $32.8 billion over 5 years and by $66.1 billion over 10 years. Those costs would be offset primarily by increases in federal tobacco taxes, which were estimated to increase on-budget revenue by $32.8 billion over 5 years and by $66.6 billion over 10 years. On any given day in 2007, approximately 9 million children were without health insurance. Most of these children came from two-parent families (53%). Most had a parent who worked full time all year (60%). And other data indicate most uninsured children are eligible for Medicaid or CHIP (62%). CBO estimated CHIPRA will increase average monthly FY2013 Medicaid and CHIP enrollment by 6.5 million over prior-law estimates, for a total of 37.7 million projected enrollees. About 80% of the increased enrollment would occur among current eligibility groups, rather than new ones. Of the 6.5 million increased average monthly enrollment in FY2013, CBO estimates that 2.4 million (37%) would have private coverage in the absence of the legislation and that 4.1 million (63%) would be uninsured. The overall structure of CHIPRA is similar to its two predecessors, H.R. 976 and H.R. 3963 from the 110 th Congress. The remainder of this report summarizes changes to prior law as enacted by CHIPRA. Under prior law, BBA97 created the Children's Health Insurance Program (CHIP) and appropriated $40 billion for CHIP original allotments from FY1998 to FY2007. The Medicare, Medicaid, and CHIP Extension Act of 2007 (MMSEA, P.L. 110-173 ) appropriated allotments and additional funding to prevent any state from running out of federal CHIP funds before March 31, 2009. The CHIP appropriation for original allotments in FY2007, the last year provided for in BBA97, totaled $5.04 billion. MMSEA provided that same amount annually for CHIP allotments in FY2008 and FY2009, stating, however, that these funds "shall not be available for child health assistance [CHIP expenditures] for items and services furnished after March 31, 2009." MMSEA also provided up to $275 million to cover any shortfalls of federal CHIP funds for the first half of FY2009—that is, through March 31, 2009. CHIPRA provides national appropriations for CHIP allotments as follows: $10.562 billion in FY2009; $12.52 billion in FY2010; $13.459 billion in FY2011; $14.982 billion in FY2012; and $2.85 billion for the first half of FY2013 and $2.85 billion for the second half of FY2013. See " Section 108. One-time appropriation. " for additional FY2013 CHIP funding. Prior to CHIPRA, of the national appropriation ($5 billion for each of FY2007, FY2008 and FY2009, for example), the territories receive 0.25%. The remainder ($4.9875 billion for each of FY2007, FY2008, and FY2009) was divided, or allotted, among the states based on a formula using survey estimates of the number of low-income children in the state and the number of those children who were uninsured. These amounts were adjusted by a geographic adjustment factor and were limited by various floors and ceilings to ensure that a state's allotment did not vary substantially from certain past allotments. Rather than dividing a fixed national appropriation on the basis of state survey estimates, CHIPRA calculates a state's allotment as described below—and if the total of all the states' and territories' allotments does not exceed the national appropriation, that will be the state's allotment. FY2009 federal CHIP allotments for states under CHIPRA will be based on the largest of three state-specific amounts: the state's FY2008 federal CHIP spending, multiplied by a growth factor; the state's FY2008 federal CHIP allotment, multiplied by a growth factor; and the state's own projections of federal CHIP spending for FY2009, submitted by states to the Secretary of Health and Human Services (HHS) as of February 2009. The largest of these three amounts will be increased by 10% and will serve as the state's FY2009 federal CHIP allotment, as long as the national appropriation is adequate to cover all the states' and territories' FY2009 allotments. If not, allotments will be reduced proportionally.