[Congressional Record Volume 148, Number 108 (Thursday, August 1, 2002)]
[Senate]
[Pages S7926-S7929]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER (for himself, Mr. Chafee, Mr. Kennedy, and Mr. 
        Hatch):
  S. 2860. A bill to amend title XXI of the Social Security Act to 
modify the rules for redistribution and extended availability of fiscal 
year 2000 and subsequent fiscal year allotments under the State 
children's health insurance program, and for other purposes; to the 
Committee on France.
  Mr. ROCKEFELLER. Mr. President, I introduce a bill that will improve 
and protect health insurance for our nation's children. The Children's 
Health Improvement and Protection Act of 2002, CHIP Act, brings us back 
to the basics of health care--the fundamental philosophy that no child 
should go without needed health care. I'm pleased to be joined by my 
good friends Senator Chafee and Senator Kennedy to introduce the 
Children's Health Insurance Improvement and Protection Act of 2002.
  Established in 1997 to reduce the number of uninsured children, the 
Children's Health Insurance Program has been an unqualified success. 
Last year, 4.6 million children were enrolled in CHIP and the 
percentage of children without health insurance has declined in recent 
years. In my state of West Virginia, the CHIP program provides health 
coverage to over 20,000 children. Health insurance coverage is key to 
assuring children's access to appropriate and adequate health care, 
including preventive services. Research demonstrates that uninsured 
children are more likely to lack a usual source of care, to go without 
needed care, and to experience worse health outcomes than children with 
coverage. Uninsured children who are injured are 30 percent less likely 
than insured children to receive medical treatment and three times more 
likely not to get a needed prescription.
  However, the continued success of the CHIP program is now in serious 
jeopardy. The Bush Administration projects that 900,000 children will 
lose their health coverage between fiscal years 2003 and 2006, if 
Congress does not take appropriate action. This is because even as 
state enrollment and spending rapidly increases, federal CHIP funding 
dropped by more than $1 billion this year and will be reduced in each 
of the next two years. Known as the ``CHIP Dip,'' this reduction has no 
underlying health policy justification; it was solely the result of the 
budget compromises we had to make when enacting the balanced budget 
deal in 1997.
  As a result, a number of states will have insufficient federal 
funding to sustain their enrollment and they will have no choice but to 
scale back or limit their CHIP programs. As enrollment is cut, the 
number of uninsured children will increase, and as a consequence, sick 
children will get sicker. The biggest problem that will result from 
enrollment cuts in the CHIP program are the future health problems of 
adults who as children could have received benefits under CHIP. Yet, 
even as states face this funding shortfall, under federal rules, nearly 
$3 billion in federal CHIP funding is scheduled to expire and revert 
back to the Treasury over the next two years. If Congress does not act, 
in order to maintain our current enrollment levels, West Virginia will 
run out of CHIP funding in 2005.
  We cannot allow this to happen. We need a comprehensive and 
reasonable approach to shore up CHIP financing in order to avert the 
devastating enrollment decline and make sure that our children are 
protected into the future. This legislation will extend the life of the 
expiring funds and fully restore CHIP funding to the pre- ``dip'' 
levels. This legislation will provide West Virginia with $117 million 
over the 2004-2012 period allowing them to strengthen and protect 
children's access to health care.
  I urge Congress to enact this legislation and ensure the continued 
success of the CHIP program and sustain the significant progress CHIP 
has made in reducing the ranks of uninsured children. Mr. President I 
ask unanimous consent that the full text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2860

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Children's Health 
     Improvement and Protection Act of 2002''.

     SEC. 2. CHANGES TO RULES FOR REDISTRIBUTION AND EXTENDED 
                   AVAILABILITY OF FISCAL YEAR 2000 AND SUBSEQUENT 
                   FISCAL YEAR ALLOTMENTS.

       Section 2104(g) of the Social Security Act (42 U.S.C. 
     1397dd(g)) is amended--
       (1) in the subsection heading--
       (A) by striking ``and'' after ``1998'' and inserting a 
     comma; and
       (B) by inserting ``, and 2000 and subsequent fiscal year'' 
     after ``1999'';
       (2) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) in the matter preceding clause (i)--

       (I) by inserting ``or for fiscal year 2000 by the end of 
     fiscal year 2002, or allotments for fiscal year 2001 and 
     subsequent fiscal years by the end of the last fiscal year 
     for which such allotments are available under subsection (e), 
     subject to paragraph (2)(C)'' after ``2001,''; and

[[Page S7927]]

       (II) by striking ``1998 or 1999'' and inserting ``1998, 
     1999, 2000, or subsequent fiscal year'';

       (ii) in clause (i)--

       (I) in subclause (I), by striking ``or'' at the end;
       (II) in subclause (II), by striking the period and 
     inserting a semicolon; and
       (III) by adding at the end the following:
       ``(III) the fiscal year 2000 allotment, the amount by which 
     the State's expenditures under this title in fiscal years 
     2000, 2001, and 2002 exceed the State's allotment for fiscal 
     year 2000 under subsection (b);
       ``(IV) the fiscal year 2001 allotment, the amount by which 
     the State's expenditures under this title in fiscal years 
     2001, 2002, and 2003 exceed the State's allotment for fiscal 
     year 2001 under subsection (b); or
       ``(V) the allotment for any subsequent fiscal year, the 
     amount by which the State's expenditures under this title in 
     the period such allotment is available under subsection (e) 
     exceeds the State's allotment for that fiscal year under 
     subsection (b).''; and

       (iii) in clause (ii), by striking ``1998 or 1999 
     allotment'' and inserting ``1998, 1999, 2000, or subsequent 
     fiscal year allotment'';
       (B) in subparagraph (B)--
       (i) in the matter preceding clause (i), by striking ``with 
     respect to fiscal year 1998 or 1999'';
       (ii) in clause (ii)--

       (I) by inserting ``with respect to fiscal year 1998 or 
     1999,'' after ``subsection (e)''; and
       (II) by striking ``and'' at the end;

       (iii) by redesignating clause (iii) as clause (iv); and
       (iv) by inserting after clause (ii), the following:
       ``(iii) notwithstanding subsection (e), with respect to 
     fiscal year 2000 or any subsequent fiscal year, shall remain 
     available for expenditure by the State through the end of the 
     fiscal year in which the State is allotted a redistribution 
     under this paragraph; and'';
       (3) in paragraph (2)--
       (A) in the paragraph heading, by striking ``1998 and 1999'' 
     and inserting ``1998, 1999, 2000, and subsequent fiscal 
     year'';
       (B) in subparagraph (A), by adding at the end the 
     following:
       ``(iii) Fiscal year 2000 allotment.--Of the amounts 
     allotted to a State pursuant to this section for fiscal year 
     2000 that were not expended by the State by the end of fiscal 
     year 2002, the amount specified in subparagraph (B) for 
     fiscal year 2000 for such State shall remain available for 
     expenditure by the State through the end of fiscal year 2003.
       ``(iv) Fiscal year 2001 allotment.--Of the amounts allotted 
     to a State pursuant to this section for fiscal year 2001 that 
     were not expended by the State by the end of fiscal year 
     2003, the amount specified in subparagraph (B) for fiscal 
     year 2001 for such State shall remain available for 
     expenditure by the State through the end of 2004.
       ``(v) Subsequent fiscal year allotments.--Of the amounts 
     allotted to a State pursuant to this section for any fiscal 
     year after 2001, that were not expended by the State by the 
     end of the last fiscal year such amounts are available under 
     subsection (e), the amount specified in subparagraph (B) for 
     that fiscal year for such State shall remain available for 
     expenditure by the State through the end of the fiscal year 
     following the last fiscal year such amounts are available 
     under subsection (e).'';
       (C) in subparagraph (B), by striking ``The'' and inserting 
     ``Subject to subparagraph (C), the'';
       (D) by redesignating subparagraph (C) as subparagraph (D); 
     and
       (E) by inserting after subparagraph (B), the following:
       ``(C) Floor for fiscal years 2000 and 2001.--For fiscal 
     years 2000 and 2001, if the total amounts that would 
     otherwise be redistributed under paragraph (1) exceed 60 
     percent of the total amount available for redistribution 
     under subsection (f) for the fiscal year, the amount 
     remaining available for expenditure by the State under 
     subparagraph (A) for such fiscal years shall be--
       ``(i) the amount equal to--

       ``(I) 40 percent of the total amount available for 
     redistribution under subsection (f) from the allotments for 
     the applicable fiscal year; multiplied by
       ``(II) the ratio of the amount of such State's unexpended 
     allotment for that fiscal year to the total amount available 
     for redistribution under subsection (f) from the allotments 
     for the fiscal year.''; and

       (4) in paragraph (3), by adding at the end the following: 
     ``For purposes of calculating the amounts described in 
     paragraphs (1) and (2) relating to the allotment for any 
     fiscal year after 1999, the Secretary shall use the amount 
     reported by the States not later than November 30 of the 
     applicable calendar year on HCFA Form 64 or HCFA Form 21, as 
     approved by the Secretary.''.

     SEC. 3. ESTABLISHMENT OF CASELOAD STABILIZATION POOL AND 
                   ADDITIONAL REDISTRIBUTION OF ALLOTMENTS.

       Section 2104 of the Social Security Act (42 U.S.C. 1397dd) 
     is amended by adding at the end the following:
       ``(h) Redistribution of Caseload Stabilization Pool 
     Amounts.--
       ``(1) Additional redistribution to stabilize caseloads.--
       ``(A) In general.--With respect to fiscal year 2003 and any 
     subsequent fiscal year, the Secretary shall redistribute to 
     an eligible State (as defined in subparagraph (B)) the amount 
     available for redistribution to the State (as determined 
     under subparagraph (C)) from the caseload stabilization pool 
     established under paragraph (3).
       ``(B) Definition of eligible state.--For purposes of 
     subparagraph (A), an eligible State is a State whose total 
     expenditures under this title through the end of the previous 
     fiscal year exceed the total allotments made available to the 
     State under subsection (b) or subsection (c) (not including 
     amounts made available under subsection (f)) through the 
     previous fiscal year.
       ``(C) Amount of additional redistribution.--For purposes of 
     subparagraph (A), the amount available for redistribution to 
     a State under subparagraph (A) is equal to--
       ``(i) the ratio of the State's allotment for the previous 
     fiscal year under subsection (b) or subsection (c) to the 
     total allotments made available under such subsections to 
     eligible States as defined under subparagraph (A) for the 
     previous fiscal year; multiplied by
       ``(ii) the total amounts available in the caseload 
     stabilization pool established under paragraph (3).
       ``(2) Period of availability.--Amounts redistributed under 
     this subsection shall remain available for expenditure by the 
     State through the end of the fiscal year in which the State 
     receives any such amounts.
       ``(3) Caseload stabilization pool.--For purposes of making 
     a redistribution under paragraph (1), the Secretary shall 
     establish a caseload stabilization pool that includes the 
     following amounts:
       ``(A) Any amount made available to a State under subsection 
     (g) but not expended within the periods required under 
     subparagraphs (g)(1)(B)(ii), (g)(1)(B)(iii), or (g)(2)(A).
       ``(B) Any amount made available to a State under this 
     subsection but not expended within the period required under 
     paragraph (2).''.

     SEC. 4. RESTORATION OF SCHIP FUNDING FOR FISCAL YEARS 2003 
                   AND 2004.

       (a) In General.--Paragraphs (6) and (7) of section 2104(a) 
     of the Social Security Act (42 U.S.C. 1397dd(a)) are amended 
     by striking ``$3,150,000,000'' each place it appears and 
     inserting ``$4,275,000,000''.
       (b) Additional Allotment To Territories.--Section 
     2104(c)(4)(B) of the Social Security Act (42 U.S.C. 
     1397dd(c)(4)(B)) is amended by striking ``$25,200,000 for 
     each of fiscal years 2002 through 2004'' and inserting 
     ``$25,200,000 for fiscal year 2002, $34,200,000 for each of 
     fiscal years 2003 and 2004''.
  Mr. CHAFEE. Mr. President, I am pleased to join Senator Rockefeller 
in introducing the Children's Health Improvement and Protection Act of 
2002.
  The Children's Health Improvement and Protection Act of 2002 will 
finally provide long-term stability to the State Children's Health 
Insurance Program. While SCHIP has been extremely successful at 
enrolling and insuring low-income and uninsured children since its 
inception in 1997, the continued success of this program is in 
question. In fact, it is estimated that almost a million children will 
lose their SCHIP coverage over the next three years if a legislative 
remedy is not signed into law to prevent this from happening.
  When SCHIP was created by the Balanced Budget Act of 1997, states 
were given their annual SCHIP allotment based on the number of 
uninsured and low-income children in each state. According to the 
Centers for Medicare and Medicaid Services, these state allotments 
range from $3.5 million for Vermont to $855 million for California. 
While the percentage of children without health insurance has declined 
over the past couple of years due to these allotments, the SCHIP 
allotments for all states are 26 percent lower for Fiscal Years 2002, 
2003, and 2004. Each of these years results in a decline of $1 billion 
for state SCHIP allotments. This phenomenon is known as the ``CHIP-
Dip.'' There was no hidden policy agenda behind this steady decline in 
funding; it was based on a lack of federal funding for SCHIP at the 
time this program was enacted.
  In addition, BBA gave states only three years to roll-over unexpended 
funds before these funds are given back to the federal treasury for 
redistribution to other states that have used up their entire 
allotments. According to the Department of Health and Human Services, a 
total of $3.2 billion in federal SCHIP funds is scheduled to expire and 
revert to Treasury over the next two years.
  These funding inadequacies not only create instability in the 
program, but they pose negative consequences for each state over the 
long-haul due to the uncertainty of federal commitment to SCHIP. The 
likely result will be that states will either have to cap enrollment in 
their SCHIP programs, push children out of their programs, or scale 
back benefits to make up for these budget shortfalls. The end result

[[Page S7928]]

will be that children who once had access to health insurance will no 
longer get the care they need.
  Our bill will remedy these funding problems. It will do so by fixing 
the ``CHIP-Dip'' and by extending the life of expiring funds to states 
that need the assistance to take care of funding shortfalls. This 
legislation is crucial to my state of Rhode Island. Without this 
legislative remedy, Rhode Island is set to run out of SCHIP funds by FY 
2004. At 4.5 percent, Rhode Island currently has the lowest uninsured 
rate of any state in the nation for children. This bill will enable 
Rhode Island to continue offering health coverage to this vulnerable 
population.
  I urge my colleagues to join Senator Rockefeller and me in supporting 
this important legislation. It is a crucial step in ensuring that our 
nation's children will have long-term access to quality health 
insurance.
  Mr. KENNEDY. Mr. President, I am pleased to introduce the Children's 
Health Improvement and Protection Act today, along with my good friends 
Senator Orrin Hatch, Senator Jay Rockefeller, and Senator Lincoln 
Chafee. This bill will provide needed funding to keep children enrolled 
in the Children's Health Insurance Program and to allow the program to 
grow. Without this legislation, hundreds of thousands of children will 
lose their CHIP coverage and rejoin the ranks of the uninsured.
  Monday is the fifth anniversary of the Children's Health Insurance 
Program. Senator Hatch and I have worked together on many proposals, 
but none has had more lasting benefit for millions of American children 
than our legislation to create CHIP. We first proposed CHIP after we 
became acutely aware of the health defects facing children and the need 
to assure that every child got a healthy start in life. Before we 
passed CHIP, 500,000 children with asthma never saw a doctor. Another 
600,000 children with earaches and 600,000 with sore throats never 
received medical care.
  A sick child can't learn. A child who can't hear the teacher can't 
learn. A child who can't see the doctor when they're sick can't learn. 
That's why uninsured children are more likely to fall behind or drop 
out of school altogether.
  We also became aware of the ravages of smoking on health, and that 
the key to addressing this problem was to discourage children from 
starting to smoke. In my own state of Massachusetts, there had been a 
very successful campaign to raise money to expand children's health 
coverage by raising the cigarette tax. This united anti-tobacco 
activists and child health advocates.
  So Senator Hatch and I decided that the winning, fiscally 
responsible, right health policy approach was to develop a major 
expansion of children's health insurance and finance it with an 
increase in the tobacco tax.
  And what a success CHIP has been. This legislation has touched every 
community in America. Last year, over 4.5 million children received 
health insurance through either Children's Health Insurance Program or 
through Medicaid expansions under the CHIP program. Last year, 105,000 
children in Massachusetts were covered through these programs, and many 
other states have had similar successes.
  Despite the clear evidence that health insurance provides children 
with a healthier start, funding cuts to the CHIP program of more than 
$1 billion this year and each of the next two years puts the gains we 
have made in insuring children at risk. This ``CHIP dip'' is a result 
of the budget constraints when CHIP was enacted in 1997 as part of the 
Balanced Budget Act. This funding cut comes at the same time enrollment 
in the program is rising and will cause 900,000 children to lose the 
health insurance they have today through CHIP.
  While states are facing a drop in funding that will cause them to 
drop insured children, almost $3 billion in unspent CHIP funds will be 
lost if we do nothing. CHIP funds must be spent within three years of 
allocation. Because of a mismatch between the time unspent funds were 
reallocated to the states and when the states needed the funds, some 
states will not be able to use all of their CHIP funds within the 
allocation period.
  It makes no sense to have funds expire and revert to the Treasury 
when we know states will be facing a funding drop that will cause them 
to cut children from their programs. One of this nation's most 
fundamental guarantees should be that every child has the opportunity 
to succeed in life. But that commitment rings hollow if children are 
doomed to a lifetime of disability and illness because they lack needed 
health care in their early years.
  That is why we are introducing the Children's Health Insurance 
Program. This bill will allow states to maintain and expand their CHIP 
programs. It lets states keep a portion of their unspent funds that 
would otherwise expire. It also establishes a new caseload 
stabilization pool with funds that would otherwise expire. The pool 
will direct unspent funds to states that are expected to use up all 
their CHIP funds. Finally, the bill provides additional CHIP funding 
for fiscal years 2003 and 2004 so that CHIP enrollment can be 
maintained and expanded. This legislation will move us one important 
step closer to fulfilling the promise that no child in America will be 
left behind because of inadequate health care coverage.
  I urge my colleagues to support this important legislation.
  Mr. HATCH. Mr. President, today, Senators Rockefeller, Chafee, 
Kennedy, and I are introducing legislation to make certain that States 
have adequate funding for the Children's Health Insurance Program, 
otherwise known as CHIP.
  I cosponsor this legislation to reflect my concern that, unless the 
Congress addresses this issue, thousands of children may risk losing 
their health insurance coverage. CHIP has proven to be an enormously 
popular program, which has provided much needed health insurance to 
literally millions of low-income children. It helps the poorest of the 
poor families who are not Medicaid-eligible.
  We cannot afford to stand back now and watch those efforts be 
undermined because of funding problems that Congress should correct. 
That is the intent, as I understand it, of the Rockefeller-Chafee bill.
  As most of my colleagues are aware, when CHIP was established in 
1997, Congress committed $20 billion over five years and a total of $40 
billion over 10 years for the program. For each fiscal year 1999 
through 2001, Congress allocated $4.3 billion; yet for the fiscal years 
2002 through 2004, Congress allocated $3 billion per year for CHIP 
programs. This so-called ``CHIP'' dip may reduce funding levels in 
States that are just beginning to ramp up their programs.
  I am concerned that while States will have some unspent CHIP moneys 
available to them, that those funds still might not be enough to 
address the ``CHIP dip'' and the expanding CHIP population. We need to 
deal with this issue and we need to deal with the nearly $3 billion in 
federal CHIP moneys scheduled to revert back to the Treasury in fiscal 
year 2002 and 2003.
  My cosponsorship of this legislation reflects my commitment to 
address these issues, although I recognize that there are a number of 
issues associated with this legislation that will need to be worked 
out. I accept the assurances of my fellow cosponsors that they will 
work with me to address those issues as the bill moves forward in the 
Finance Committee.
  Let me also add that I am aware that many of my colleagues have 
additional policy issues regarding the CHIP program that they feel 
should be addressed. Know I do. I am particularly concerned by recent 
legislation, approved by the Finance Committee, which would extend 
coverage under the CHIP program to pregnant women. Now, I 
wholeheartedly support providing expectant mothers health care 
assistance. But, I believe that before we extend coverage under CHIP to 
any adult, States need to demonstrate that they are covering, to the 
greatest extend possible, all eligible children.
  The CHIP program is one of my proudest accomplishments. I want to 
continue to maintain the integrity of this program. The only purpose of 
CHIP was to extend access to health insurance to poor kids. As one of 
the prime authors of the legislation, I can assure my colleagues that 
it was not our intent that the program be expanded to address the 
entire problem of health care for the uninsured a piece at a time. 
Covering the uninsured is a worthy goal and one which we need to 
address, but that was not the purpose

[[Page S7929]]

of CHIP. We were dealing with a special problem: the up to 10 million 
children who did not have access to health insurance. We ought not lose 
sight of this. I am confident we can come to an agreement on measures 
to ensure that needy children receive the health care they deserve and 
thus I am pleased to join with my colleagues today.
                                 ______