[Congressional Record Volume 151, Number 106 (Friday, July 29, 2005)]
[Senate]
[Page S9509]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Domenici, Mrs. Murray, Mr. 
        Jeffords, Mr. Alexander, Ms. Cantwell, Mr. Akaka, Mr. Reed, Mr. 
        Chafee, Mr. Leahy, Mr. Dodd, and Mr. Dayton):
  S. 1587. A bill to amend title XXI of the Social Security Act to 
permit qualifying States to use a portion of their allotments under the 
State children's health insurance program for any fiscal year for 
certain medicaid expenditures; to the Committee on Finance.
  Mr. BINGAMAN. Mr. President, today with Senators Domenici, Murray, 
Jeffords, Alexander, Cantwell, Akaka, Reed, Chafee, Leahy, Dodd, and 
Dayton we introduce legislation entitled the ``Children's Health Equity 
Act of 2005.''
  This legislation would extend provisions that were included in Public 
Laws #108-74 and 108-127 that amended the State Children's Health 
Insurance Program, or SCHIP, to permit the states of Connecticut, 
Hawaii, Maryland, Minnesota, New Hampshire, New Mexico, Rhode Island, 
Tennessee, Vermont, Washington, and Wisconsin to apply some of their 
enhanced SCHIP matching funds toward the coverage of certain children 
enrolling in Medicaid that were part of expansions of coverage to 
children through Medicaid in those 11 states prior to the enactment of 
SCHIP.
  As a article in the September/October 2004 issue of Health Affairs by 
Genevieve Kenney and Debbie Chang points out, when SCHIP was created, 
``Inequities were . . . introduced across states because those that had 
already expanded Medicaid coverage to children could not receive the 
higher SCHIP matching rate for these children . . . [and this] meant 
that states that had been ahead of the curve in expanding Medicaid 
eligibility for children were penalized financially relative to states 
that expanded coverage after SCHIP.''
  The article adds that ``additional cross-state inequities were 
introduced'' during the creation of SCHIP because three states had 
their prior expansions grandfathered in during the bill's 
consideration. Left behind were the aforementioned 11 states.
  Fortunately, with the passage of Public Laws #108-74 and 108-127 in 
2003, the inequity was recognized and the 11 states, including New 
Mexico, were allowed to use up to 20 percent of our State's enhanced 
SCHIP allotments to pay for Medicaid eligible children above 150 
percent of poverty that were part of Medicaid expansions prior to the 
enactment of SCHIP. As the Congressional Research Service notes, ``The 
primary purpose of the 20 percent allowance was to enable qualifying 
states to receive the enhanced FMAP [Federal Medical Assistance 
Percentage] for certain children who likely would have been covered 
under SCHIP had the state not expanded their regular Medicaid coverage 
before SCHIP's enactment in August 1997.''
  Unfortunately, one major problem with the compromise was that it only 
allowed the 11 states flexibility with their SCHIP funds for allotments 
between 1998 and 2001 and not in the future. Therefore, the inequity 
continues with SCHIP allotments from 2002 and on. In fact, with the 
expiration of SCHIP funds from FY 1998-2000 as of September 2004, that 
leaves the 11 states with only the ability to spend FY 2001 SCHIP 
allotments on expansion children. For those states, such as Vermont and 
Rhode Island, that have already spent their 2001 SCHIP allotments, they 
no longer benefit from the passage of this provision. Furthermore, the 
FY 2001 funds will also expire at the end of September 2005. Thus, 
under current law, no spending under these provisions will be permitted 
in fiscal year 2006 or thereafter.
  Therefore, our legislation today prevents the full expiration of this 
provision for our 11 states and ensures that the compromise language is 
extended in the future. It is important to states such as New Mexico 
that have been severely penalized for having expanded coverage to 
children through Medicaid prior to the enactment of SCHIP. In fact, due 
to the SCHIP inequity, New Mexico has been allocated $266 million from 
SCHIP between fiscal years 1998 and 2002, and yet, has only been able 
to spend slightly over $26 million as of the end of last fiscal year. 
In other words, New Mexico has been allowed to spend less than 10 
percent of its federal SCHIP allocations because the expansion children 
have been previously ineligible for the enhanced SCHIP matching funds.
  As the health policy statement by the National Governors' Association 
reads, ``The Governors believe that it is critical that innovative 
states not be penalized for having expanded coverage to children before 
the enactment of S-CHIP, which provides enhanced funding to meet these 
goals. To this end, the Governors support providing additional funding 
flexibility to states that had already significantly expanded coverage 
to the majority of uninsured children in their states.''
  It is important to note the bill does not take money from other 
states' CHIP allotments. It simply allows our states to spend our 
States' specific CHIP allotments from the federal government on our 
uninsured children--just as other states across the country are doing.
  According to an analysis by the Congressional Research Service, thus 
far eight states have benefited financially from the passage of the 
legislation. In the fourth quarter of 2003 and for all four quarters in 
2004, Hawaii reported federal SCHIP expenditures using the 20 percent 
allowance in the amount of $380,000, Maryland received $106,000, New 
Hampshire received $2.1 million, New Mexico received $2.3 million, 
Rhode Island received $485,000, Tennessee received $4.5 million, 
Vermont received $475,000, and Washington received $22.2 million.
  I urge that this very important provision for our states be included 
in the budget reconciliation package the Congress is preparing to 
consider in September and ask unanimous consent that the 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. 1587

       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 Equity 
     Technical Amendment Act of 2005''.

     SEC. 2. AUTHORITY FOR QUALIFYING STATES TO USE PORTION OF 
                   SCHIP ALLOTMENT FOR ANY FISCAL YEAR FOR CERTAIN 
                   MEDICAID EXPENDITURES.

       (a) In General.--Section 2105(g)(1)(A) of the Social 
     Security Act (42 U.S.C. 1397ee(g)(1)(A)) is amended by 
     striking ``fiscal year 1998, 1999, 2000, or 2001'' and 
     inserting ``a fiscal year''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if enacted on October 1, 2004.
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