SCHIP headed for dive in funding, access

Congress is considering legislation that would bolster the program's finances, but experts think that may not be enough.

By Joel B. Finkelstein, AMNews staff. July 28, 2003.

Washington -- The states want their money back.

The federal government's share of funding for the State Children's Health Insurance Program has dropped by more than $1 billion, driving physician groups and the National Governors Assn. to ask Congress to return unspent dollars allocated for the program during previous years. An infusion of cash is necessary, they say, to prevent the program from losing ground in terms of the number of children who have access to health care as a result.

The so-called billion-dollar "SCHIP dip" is due to an uneven allocation of $40 billion committed to the program over 10 years. The decrease hits at a particularly bad time -- enrollment is growing rapidly while state budgets are shrinking just as fast.

"The monies that were available in the beginning were not all spent, even though they were needed," said John E. Lewy, MD, chair of pediatrics at Tulane Hospital for Children in New Orleans and chair of the American Academy of Pediatrics' committee on federal government affairs. "There wasn't enough time, there weren't enough kids enrolled [in the beginning]."

Once the states had ramped up their programs to use the initial funding, the support had reached its expiration date due to a three-year statute of limitation in the law.

If more money is not pumped into the program now, nearly a half-million low-income children will lose coverage between 2003 and 2007, said Robert Greenstein, director of the Center for Budget and Policy Priorities, a nonprofit think tank that examines government programs and policies.