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SCHIP President Bush Jan. 15 signed into law a bill that will temporarily solve expected funding shortfalls in the State Children's Health Insurance Program through May 4 by redistributing funds from states with unspent allotments. The new law for SCHIP, a federal/state-funded health care program for low-income children in families that earn too much to qualify for Medicaid, redirects about $271 million from states with unspent funds in fiscal years 2004 and 2005 to offset expected state shortages through May 4. In addition, states receiving redistributed funds that have expanded SCHIP coverage beyond children and pregnant women are now eligible for a Medicaid match for those individuals. The SCHIP funding redistribution was passed at the end of the lame-duck session in Congress as part of H.R. 6164, the National Institutes of Health Reform Act of 2006, which authorizes appropriations for NIH. Prior to this law, 14 states were expected to run short of federal SCHIP funds during 2007, for a total estimated shortfall of $920 million. The law also allows 11 "qualifying states" that had expanded their Medicaid programs before SCHIP was enacted to spend up to 20 percent of their FY 2006 and 2007 allotments on Medicaid coverage for eligible children. Those states are Connecticut, Hawaii, Maryland, Minnesota, New Hampshire, New Mexico, Rhode Island, Tennessee, Vermont, Washington, and Wisconsin. The law redistributes $146 million in expiring FY 2004 SCHIP funds that remain unspent to states that have shortfalls. The law also creates a $125 million redistribution pool by redirecting funds from states that as of March 31 have more than twice their projected needed total SCHIP funds. The law requires such states to give up to half of their remaining FY 2005 funds, up to $20 million, to the pool.
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