Congress plugs $650 million SCHIP funding gap

Washington -- State Children's Health Insurance Programs will receive $650 million in federal funds to fill budget shortfalls this year thanks to a bill signed into law May 25.

The money was part of a $120 billion military spending bill. The funding will be divided among 14 states that were expecting to run out of SCHIP money before Sept. 30, the end of fiscal year 2007.

The total SCHIP shortfall was estimated at more than $700 million earlier this year, with the first states running out of SCHIP funds in early May. However, $650 million should be enough to fund all of the programs, said Martha Roherty, director of the National Assn. of State Medicaid Directors. That should end the possibility of more states freezing enrollment and any state cutting benefits.

Pediatricians and state Medicaid officials were thankful for the action but were already looking ahead to the looming debate on SCHIP reauthorization. The program is a decade-old state and federally funded initiative for children in families too poor to buy private health insurance but making too much to qualify for Medicaid. It covers 6 million people, including about 600,000 adults, and expires Sept. 30.

States were still waiting to hear how large their share of the $650 million would be. A few states needed a significant portion of the money. For example, the Georgia, New Jersey and Illinois programs needed about $360 million combined to finish fiscal 2007.

Georgia SCHIP still frozen

Of the 14 states facing SCHIP deficits, only Georgia closed enrollment, and it will stay closed for a little while longer. The state's SCHIP oversight board stopped enrollment March 11 at about 280,000 and can't lift the freeze until July 14 at the earliest because of required public notices, said Dena Brummer, Georgia Dept. of Community Health spokeswoman. The program needs $81 million for the rest of 2007.

Despite its SCHIP -- which covers kids in families earning up to 235% of the federal poverty level -- the state still has more than 300,000 uninsured children, said Martin Michaels, MD, president of the Georgia chapter of the American Academy of Pediatrics.

While Georgia Gov. Sonny Perdue was thankful for the SCHIP dollars, he would like Congress to revise the program's funding formula to better account for the increasing number of uninsured children in fast-growing states such as Georgia.

Illinois' SCHIP needs $181 million for the rest of 2007, the largest deficit of all programs. The SCHIP and Medicaid programs, combined with the state's All Kids program, offer health insurance to all children.

"[SCHIP] is an integral part of the overall funding for health care for children in the state," said Edward Pont, MD, president of the Illinois chapter of the American Academy of Pediatrics. SCHIP covers children in families earning up to 200% of the poverty level and supports the health care of more than 290,000 Illinois children and their families, according to Gov. Rod Blagojevich's office.

New Jersey's SCHIP needs about $100 million to finish 2007, said Suzanne Esterman, spokeswoman for the state's Dept. of Human Services. It covers about 129,000 children with family incomes up to 350% of the poverty level -- the highest limit of any SCHIP. The program also covers about 86,000 adults, most of whom earn less than 115% of the poverty level.

The state recently budgeted $20 million to increase reimbursements to pediatricians treating SCHIP and Medicaid patients, noted Janice Prontnicki, MD, president of the New Jersey chapter of the American Academy of Pediatrics. It's particularly difficult to find pediatric specialists because the state has one of the lowest pediatric payment rates in the U.S. -- less than half of Medicare rates, she said.

SCHIP reauthorization next

With SCHIP funding addressed for this year, eyes are turning to the program's renewal. Congress passed a budget outline with a five-year, $50 billion reauthorization -- more than double current federal spending.

That increase would cover about 6 million of the roughly 9 million uninsured U.S. children, said Jay Berkelhamer, MD, American Academy of Pediatrics president. "That's, I think, very feasible," he said.

Funding is the key question for SCHIP, Dr. Berkelhamer said. The program needs a sustainable, reliable source of dollars. The AAP, the American Medical Association and 66 other physician, hospital, patient advocacy and other organizations signed a letter in May supporting a 61-cent cigarette tax increase to pay for SCHIP, which would raise about $46 billion.

Congressional committees were expected to review bills beginning this month.

The AMA, as part of the Health Coverage Coalition for the Uninsured, supports refundable, advanceable tax credits to help buy health insurance for children and improving Medicaid and SCHIP enrollment.