[Congressional Record (Bound Edition), Volume 150 (2004), Part 15]
[Senate]
[Page 20545]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  CHIP PROTECTION AND IMPROVEMENT ACT

  Mr. CHAFEE. Mr. President, I introduced S. 2759, along with my 
colleague, Senator Rockefeller, to help States with healthy State 
Children's Health Insurance programs remain strong, so that they may 
continue to provide high-quality health care coverage to the children 
they serve. Our bill achieves this objective by allowing States to keep 
$1.1 billion in expiring funds in the SCHIP program and continuing 
current law redistribution rules through 2007.
  Concerns have been expressed that S. 2759 would not reallocate SCHIP 
funds in an effective manner and that States cannot utilize their 
current SCHIP allotments. Proponents of this view believe the expiring 
SCHIP funds could be more effectively used for outreach and enrollment 
in the program. We fully support greater outreach and enrollment, but 
do not believe that it should come at the expense of providing adequate 
health insurance to children currently served by the program. In 2003, 
due to State budget deficits, seven States capped enrollment in their 
SCHIP. Over the next few years, unless we extend the availability of 
existing SCHIP funds and target them to the States with the most need, 
many States will lack adequate funds to meet their existing need, much 
less enroll more eligible but uninsured children. It is also important 
to note that ten percent of the amount States spend on coverage can be 
spent on administrative costs, including outreach. Consequently, an 
increase in coverage would also increase the funding States have for 
outreach and enrollment. Moreover, the Robert Wood Johnson Foundation 
currently provides SCHIP outreach grants to community health centers, 
hospitals, and faith-based organizations through its Covering Kids & 
Families Initiative.
  Another criticism of S. 2759 deals with the amount of money States 
will have available in fiscal year 2005. States and territories will 
have $10.8 billion available to provide health insurance coverage to 
children in 2005. It has also been estimated that States will only 
require $5.3 billion in fiscal year 2005 to provide adequate coverage. 
Although this is true in the aggregate, this funding figure does not 
take into account the realities of the existing SCHIP financing system. 
These excess funds are concentrated in low-spending States that have 
not utilized their SCHIP allotments in previous years, and they are not 
available to States facing Federal funding shortfalls. In the absence 
of a fundamental alteration of the current SCHIP financing system, the 
aggregate funding in the program is not relevant to critical issue of 
whether there is adequate funding within specific States.
  Lastly, it has been proposed that the Secretary of the Department of 
Health and Human Services has the authority to redistribute unspent 
allotments from fiscal year 2002 to States where Federal funding 
shortfalls are anticipated in fiscal year 2005. While it is encouraging 
that the concerns of States facing an immediate shortfall in 2005 would 
be alleviated under this approach, our larger concern about the long-
term financial health of the SCHIP in fiscal years 2006 and 2007 
persists. Eleven States would receive less in redistributed fiscal year 
2002 funds under this proposal than they would otherwise receive, and 
they would not have access to the $1.07 billion in federal SCHIP funds 
that are scheduled to expire.
  The Children's Health Protection and Improvement Act addresses the 
long-term Federal funding shortfalls in the SCHIP program over the next 
3 years. The Governors of all 50 States have endorsed our proposal and 
view it as a comprehensive approach to addressing the Federal SCHIP 
funding shortfalls that will occur prior to the program's 
reauthorization in fiscal year 2007. We stand ready to work with the 
Senate leadership and the administration to keep the SCHIP strong so 
that it may continue to provide critical health care coverage to 
uninsured children through fiscal year 2007, when a more comprehensive 
resolution of the formula problems can be explored.

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