Supplemental Funding Legislation Eliminates Current SCHIP Shortfalls

President Bush recently signed a supplemental appropriations bill that will provide $650 million in emergency funding for 14 states struggling with shortfalls in their state children's health insurance programs, or SCHIPs.

Bush signed the $120 billion supplemental appropriations bill, H.R. 2206, (at the Thomas web site, type "HR 2206" in the search box after selecting "Bill Number") on May 25. Although the legislation primarily will fund combat operations in Iraq and Afghanistan, the bill also contains funding for domestic programs, including $650 million for SCHIP shortfalls in 14 states (Alaska, Georgia, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, Rhode Island and Wisconsin).

As a result of the funding shortfalls, Georgia officials earlier this year had made a number of reductions to the state's SCHIP, the PeachCare for Kids program. In mid-March, they froze enrollment in the program and changed financial eligibility requirements to make it tougher for applicants to qualify. They also moved some SCHIP recipients onto Medicaid. Georgia will receive $114 million from the supplemental appropriations bill, which should cover the state's shortfall, but enrollment will remain frozen indefinitely, according to state officials. The $114 million does not secure funding for the program beyond Sept. 30, officials said.

Reauthorization now looms as a major issue facing SCHIP, which currently insures about 6 million low-income children and 600,000 adults nationwide. The program is set to expire on Sept. 30 if Congress does not act to reauthorize it. Although House and Senate members have vowed to reauthorize SCHIP before the Sept. 30 deadline, some analysts are not convinced Congress will succeed in reauthorizing the program this fiscal year.

Congress has about 40 legislative days left to reauthorize SCHIP and approve 13 appropriations bills, a heavy legislative calendar that could postpone SCHIP reauthorization, said Bruce Lesley, president of First Focus, a bipartisan children's advocacy group in Washington. Moreover, the Bush administration and Congress are unlikely to agree on a reauthorized SCHIP bill, which could further delay reauthorization.

"It is not a slam dunk," said Lesley, speculating on SCHIP reauthorization. "It might be more like a 10-foot jump shot."

If Congress fails to reauthorize SCHIP, it probably would grant the program a short-term extension, giving members more time to work on a reauthorization bill, Lesley said.

Congress, meanwhile, is considering several proposals to reauthorize the program. One bill, S.B. 1224, (at the THOMAS Web site, type "SB 1224" in the search box after selecting "Bill Number") which was introduced by Sens. Jay Rockefeller, D-W.Va.; Edward Kennedy, D-Mass.; and Olympia Snowe, R-Maine, is likely to serve as the basis for SCHIP reauthorization in the House and Senate.

"We believe our proposal is the starting point for any discussion about reauthorization," said Steven Broderick, Rockefeller's press secretary. "We think we have done a good job of embodying what everyone wants to see in an SCHIP reauthorization proposal."

The bill would fund SCHIP at as much as $50 billion total during the next five years, which would enable states to ease their eligibility criteria for the program, expanding coverage to an additional 3 million children during that five-year period, Broderick said. Under the bill, states would have two years to spend their annual SCHIP allotments; if they fail to do so, the federal government has the discretion to take the unspent funds and distribute them to states with SCHIP shortfalls.

Perhaps just as importantly, the legislation creates a program eligibility "express lane," of sorts, so individuals already enrolled in a federal program with low eligibility standards can enroll in SCHIP without having to go through a new eligibility process.