Medicare Compliance & Reimbursement

Without a funding increase, 1.3 million children will lose their health insurance.

While Washington's talking heads reaffirm their commitment to extending the State Children's Health Insurance Program's (SCHIP) viability, their inaction could leave otherwise uninsured children without medical care as early as May 2007, according to a new study.
 
Projections indicate that 14 to 17 states will face SCHIP funding shortfalls before the end of 2007; legislation passed late in 2006 partially addressed those needs by reallocating a $6 billion surplus in federal funds, but that resource will run dry by May, leaving children in those states without insurance, say Urban Institute researchers Genevieve Kenney and Justin Yee.

That funding shortfall might also affect other states. "The uncertainty around the adequacy of federal funds to support SCHIP has reportedly led some states to hold off on new initiatives to expand coverage under SCHIP," Kenney and Yee write in a Health Affairs report.

President Bush's budget for the fiscal year 2008 proposed increasing SCHIP funding by $5 billion over the next five years and limiting SCHIP coverage to families at or below 200 percent of the poverty line, but these funding increases remain woefully inadequate, the report says.

Current Congressional Budget Office baseline projections place federal funding at $5 billion annually, but that number needs to increase quickly if government officials plan to sustain current programs. "If federal funding for SCHIP is frozen at that level, it will likely be impossible for state programs to maintain their current enrollment levels, let alone expand to cover more of the close to 2 million remaining uninsured children who are eligible for SCHIP," Kenney and Yee explain.

Indeed, without a bump in federal funding, total SCHIP enrollment will fall from 4.4 million in 2006 to 3.1 million in 2011, according to an estimate from the Centers for Medicare & Medicaid Services' Office of the Actuary. While the exact amount of funding needed to maintain current programs and enrollment levels remains unknown, it could be as high as an additional $12 billion from 2008 to 2012, the Congressional Research Service notes.

The need for increased funding stems in part from the various additional programs that have increasingly relied on SCHIP for funds. SCHIP primarily serves low-income uninsured children by providing them with access to quality care, but several states drew on SCHIP funds to cover pregnant women and other adults, Kenney and Yee say. In addition, some states have expanded their coverage to families above 200 percent of the poverty line; Massachusetts, for example, provides coverage through SCHIP to children living at or below 300 percent of the poverty line. Fixing The Funding Crisis Although the coverage extensions offered by Massachusetts and other states account for some of the [...]