<P> The Children's Health Insurance Program (CHIP)--formerly known as the State Children's Health Insurance Program (SCHIP)--is a program administered by the United States Department of Health and Human Services that provides matching funds to states for health insurance to families with children . The program was designed to cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid . </P> <P> The program came in response to the failure of comprehensive health care reform proposed in 1993 by President Bill Clinton . The legislation to create it was sponsored by Senator Ted Kennedy in a partnership with Senator Orrin Hatch, with support coming from First Lady Hillary Clinton during the Clinton administration . At its creation in 1997, SCHIP was the largest expansion of taxpayer - funded health insurance coverage for children in the U.S. since Lyndon Johnson established Medicaid in 1965 . The statutory authority for CHIP is under title XXI of the Social Security Act . </P> <P> States are given flexibility in designing their CHIP eligibility requirements and policies within broad federal guidelines . Some states have received authority through waivers of statutory provisions to use CHIP funds to cover the parents of children receiving benefits from both CHIP and Medicaid, pregnant women, and other adults . CHIP covered 7.6 million children during federal fiscal year 2010, and every state has an approved plan . Despite CHIP, the number of uninsured children continued to rise, particularly among families that cannot qualify for CHIP . An October 2007 study by the Vimo Research Group found that 68.7 percent of newly uninsured children were in families whose incomes were 200 percent of the federal poverty level or higher as more employers dropped dependents or dropped coverage altogether due to annual premiums nearly doubling between 2000 and 2006 . Vimo cites the Kaiser Commission on Medicaid and the Uninsured when it says 48 percent of the newly uninsured were not eligible for any kind of public coverage, and that only those in the lowest income bracket might offset the loss of employer - sponsored coverage with increases in Medicaid and SCHIP . In FY 2008, the program faced funding shortfalls in several states . </P>

The children's health initiative program (chip) is an extension of which government program