State Returns $740 Million in Unused Federal CHIP Funds
State officials yesterday returned $740 million in unused federal funds allocated for Healthy Families after the state failed to spend the funds within the allowable time frame, the Los Angeles Times reports. Under federal law, states have three years to spend their annual federal CHIP allocations, after which they must return unspent funds. The federal government redistributes the returned funds to states that have spent their allotments. Health experts attributed the unspent funds to a "slow start" in Healthy Families enrollment, the Times reports. The state returned $706 million in federal CHIP funds from fiscal years 1998 and 1999, according to the Managed Risk Medical Insurance Board, which oversees Healthy Families. Jim Keddy, director of the PICO California Project, said, "We feel that the governor and Legislature could have moved much more quickly in expanding the program and using up some of the funds. It's a misuse of funds that should be spent on California families." Secretary of Health and Human Services Grantland Johnson defended state officials. He said that since Gov. Gray Davis (D) took office in 1999, Healthy Families enrollment has increased from 50,000 children to about 600,000. "There's no other state that has matched that effort," Johnson said. Johnson added that federal guidelines have made it "impossible" for California to spend the state's share within the allotted time. The Times reports that Congress may extend the deadline for states to spend their CHIP funds; in addition to California, about 36 states have not spent their federal CHIP allotments (Ornstein, Los Angeles Times, 10/1).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.