Several States Forfeit $1.2 Billion in Unspent CHIP Funds
Twenty-five states on Oct. 1 forfeited $1.2 billion in unspent CHIP funds to the U.S. Treasury, the New York Times reports. The money, unclaimed after four years, can be used for other purposes unless Congress passes legislation to return the funds back to state CHIP programs. Currently, more than four million children are enrolled in the health insurance program, but that number could drop by 600,000 if the funding is not restored, the Times reports. Under the CHIP program, created in 1997, states have three years to use funds appropriated for a given year. If the states do not spend the money within that time, the federal government redistributes a portion of the unused money to other states that exhausted their initial funding. Any remaining unused money must be given back to the Treasury. On Oct. 1, New York, which spent all of its initial allotment, lost $397 million in redistributed funds it could not spend. Indiana and North Carolina each lost $100 million; South Carolina lost $90 million; Arkansas lost $44 million; and Washington state lost $35 million.
With 8.5 million children still uninsured, state officials are urging Congress to extend the deadline for states to use the CHIP funds. Many states are losing the funds because they received more money then they could spend during the initial development and outreach phases of the programs. President Bush in February asked Congress to extend the spending deadline and allow states to keep the money they received until 2006. Several lawmakers have proposed legislation to restore the funding, but Congress has been "stymied by disagreements" over how to allocate the money to various states, the Times reports (Pear, New York Times, 10/14). "Marketplace" Monday reported on the forfeited CHIP funding. The segment includes comments from Gregg Haifley of the Children's Defense Fund (Henn, "Marketplace," MPR, 10/14). A transcript and audio of the segment in RealPlayer are available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.