Uncertainty over plans to reauthorize the State Children's Health Insurance Program is likely to cause states to cut back on coverage and take other steps to cut back on services.
A report by the Portland, Maine-based National Academy for State Health Policy cites data indicating that 21 states will not be able to fully fund their programs throughout the current fiscal year without additional resources.
According to data derived from the Congressional Research Service in its October 2007 report to Congress, states with the largest projected shortfall include:
• California, $342.5 million
• Illinois, $253.2 million
• Georgia, $199.9 million
• New Jersey, $191.1 million
• Massachusetts, $157.3 million.
The future of the SCHIP program seemed to be more in doubt this week after President Bush vetoed a second effort by Congress to reauthorize the SCHIP program. With only a week left in the current session of Congress, it appeared unlikely that an override of the president's veto could be mounted in the House of Representatives. State shortfalls were expected because of increased need, rising medical costs or flaws in qualification formulas.
Author of the report, John McInerney, said looming shortfalls are forcing states to make contingency plans that may result in steps that affect healthcare coverage for children. NASHP researched the report by discussing funding uncertainties with states.
Enrollment reductions appear to be the most significant effect of the uncertainty surrounding SCHIP, McInerney concludes. "States may need to stop enrollment, erect enrollment barriers or even disenroll children from the program," he said.
He expects states to begin experiencing shortfalls in March. While Congress has bailed out shortfalls in previous years, it's uncertain whether Congress will come through again. "A number of these states have already begun to consider cost-saving measures to ensure they can live within budgets in the event that sufficient funding is not authorized," McInerney said.
The biggest shock waves could come in California, which has 850,000 SCHIP enrollees but expects a shortfall in the program of $340 million and is projected to run out of funds in June. The state is expected to make a final decision on whether to begin disenrolling children beginning next month, he said.
States also are considering reining in efforts to reach out to children who might be eligible for coverage under SCHIP. "Without the assurance of a continued SCHIP funding stream, states worry that bringing more children into the program could jeopardize states' ability to cover already enrolled children," McInerney said.
States also are worrying that they won't be able to easily reverse program cutback decisions they'll have to make because of current uncertainty surrounding the program. As a result, confidence in the program could erode, further exacerbating problems associated with the lack of healthcare insurance.