Congress plugs SCHIP funding gap but deficits still loom in 14 states

If lawmakers don't act quickly, young patients could face access problems and physician reimbursement could slip.

By Doug Trapp, AMNews staff. Jan. 15, 2007.

Washington -- Congress bought some time to figure out how to prevent massive shortfalls in the state-federal health program for low-income children.

Just before adjourning for 2006, lawmakers passed a provision that redistributes $271 million in State Children's Health Insurance Program dollars from 2004 and 2005 to the six states facing the most immediate funding holes. The money comes from states that didn't use all their program funding.

The cash infusion is expected to keep the programs in Georgia, Illinois, Maryland, Massachusetts, New Jersey and Rhode Island in the black until May. But those states and eight others face SCHIP deficits later in fiscal year 2007.

The measure, part of National Institutes of Health funding legislation signed into law last month, cut a chunk out of the $987 million in projected deficits faced by the 14 states. Combined, they have nearly 1 million SCHIP enrollees.

"It is a stopgap measure," said Jay Berkelhamer, MD, president of the American Academy of Pediatrics. "But it's doing the right things to make sure the kids are getting the services they need."

SCHIP is finishing its 10th year on Sept. 30 -- the end of fiscal 2007 -- and is up for reauthorization. The new Congress could address the remaining $716 million funding shortfall as part of the program's reauthorization or with separate legislation.

If Congress doesn't fix the problem, the affected states will have to limit SCHIP enrollment or reduce coverage or reimbursement rates.