[Congressional Record Volume 148, Number 106 (Tuesday, July 30, 2002)]
[Senate]
[Pages S7580-S7581]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself Mr. Bingaman, Mrs. Lincoln, and Mrs. 
        Murray):
  S. 2819. A bill to amend title XXI of the Social Security Act to 
permit qualifying States to use a portion of their unspent allotments 
under the State children's health insurance program to expand health 
coverage under that program or for expenditures under the Medicaid 
program, and for other purposes; to the Committee on Finance.
  Mr. JEFFORDS. Mr. President, today I am pleased to introduce the 
SCHIP Budget Allocation Bill of 2002. This important legislation 
addresses the allocation of budgeted but unspent SCHIP funds that are 
currently out of the reach of States and are scheduled to be returned 
to the treasury at the end of fiscal year 2002 under BIPA provisions. 
With our economy in recession, the healthcare needs of the pediatric 
Medicaid and SCHIP populations have not been in greater jeopardy in 
recent memory. Our bill will address several important and essential 
issues. First, it will financially reward those States that are doing 
an outstanding job with their SCHIP and Medicaid pediatric populations. 
Second, it will provide financial incentives to those States that have 
not yet achieved SCHIP eligibility standards. Third, it will provide 
additional Medicaid revenue, through an enhancement of the Federal 
Medicaid Assistant Percentage, FMAP, to States experiencing budget 
shortfalls due to the current recession. And lastly, it will protect 
children's healthcare services during this period of Medicaid cutbacks 
on benefits and services.
  SCHIP's first year of implementation was 1998. At that time program 
budgeting was not done based on an actuarial estimate of per capita 
program costs, but rather excessive funds were committed to insure 
adequate funding. What has evolved since 1998 is a surplus of budgeted 
funds whose allocation and fate has been determined by a complex State-
by-State budgeting process that allows for cross subsidization between 
States and has resulted in large sums of unspent funds to accumulate. 
An unintended consequence of this intricate budgeting process is that 
it allows States with unspent allocated funds and States with unspent 
redistributed funds to lose access to these funds at the end of this 
fiscal year. In total, over forty States will lose access to allocated 
monies, only to see budgeted funds diverted back to the treasury; money 
that could be used to shore up the health care needs of children in 
Medicaid. In reviewing available options, we see the opportunity to 
merge the original goals of SCHIP, namely to provide for the health 
care needs of as many children as possible, while addressing the major 
budget problems currently being experienced by most States. Our bill 
would accomplish this by allowing unspent SCHIP monies to be used to 
enhance the FMAP for State Medicaid services for pediatric and pregnant 
women beneficiaries. Prior to initiating and introducing this bill, we 
evaluated the SCHIP budget, with CMS and CBO data, and found that the 
program had adequate residual funds to allow for these monies to be 
used by States to weather these difficult economic times without 
financially damaging the actuarially projected needs of SCHIP.

[[Page S7581]]

  Our proposal has been reviewed in detail and endorsed by the American 
Academy of Pediatrics. This advocacy group shares our concern that 
unless decisive action is taken, access to health care for indigent 
children will suffer in our current economic climate. Today, please 
join with me and my colleagues, Senators Bingaman, Lincoln, and Murray 
in supporting this bill. We can not and must not allow children's 
health care to suffer during these difficult economic times.
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