SCHIP Programs Will Face Future Budget Deficits Without Congressional Action, Report Finds
Federal funds for SCHIP programs likely will fall short of states' needs in coming fiscal years, as more states expand enrollment, according to a report by the Congressional Research Service, the AP/Las Vegas Sun reports.
Federal SCHIP funds will total $4.1 billion in fiscal year 2006, but projected demand for funds will be about $5 billion to $6 billion, according to the report. In addition, Congress in FY 2007 is expected to appropriate $5 billion, but the projected demand for federal funds will be $5.4 billion to $6.8 billion, the report finds.
According to the report, six to 14 states are expected to use their entire federal SCHIP allotment in FY 2006, and 12 to 20 states are expected to use their entire allotment in FY 2007. States must use their entire federal SCHIP budget within three years after it is distributed or else it must be returned to the federal government. So far, a redistribution of unused federal SCHIP funds to states that have exhausted their federal share prevented widespread shortfalls.
The report states, "Although the SCHIP program has been successful in covering millions of uninsured children and has therefore been politically popular, some states are poised to exhaust their federal funds as early as next fiscal year. If Congress decides to prevent these shortfalls, legislative action will be needed."
Sen. Edward Kennedy (D-Mass.) on Friday said he plans to introduce legislation that would allot an additional $1 billion to the program. He said the money had previously been allocated to SCHIP, but unused funds reverted to the U.S. Treasury on Sept. 30, 2004.
The AP/Sun reports that some lawmakers would prefer changing the redistribution formula, possibly by requiring states that request additional federal money to fund the program themselves. "Part of the solution might be to make sure the money that's already in the system is directed to where it's needed and will be used," Senate Finance Committee Chair Chuck Grassley (R-Iowa) said.
Kennedy said, "It is unconscionable that children will go without health care because funds meant for the SCHIP program were not kept in the program" (Freking, AP/Las Vegas Sun, 7/9).