Quick fix for SCHIP shortfall.

• Position: TRENDS AND TRANSITIONS - State Children's Health Insurance Program

At least 14 states--Alaska, Georgia, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, Rhode Island and Wisconsin-will not have enough funds to provide health coverage to enrollees in the State Children's Health Insurance Program (SCHIP) through federal fiscal year (FFY) 2007, which ends on September 30. The anticipated shortfall is more than $800 million and will be even greater and affect more states in 2008.

SCHIP, a partnership between the federal government and the states, provides health insurance coverage for certain low-income children under age 19 who are not eligible for Medicaid. It was created in 1997 and Congress allocated more than $40 billion for it through FFY 2007.

Last December, Congress took stopgap action to keep SCHIP afloat through May 2007 in states that otherwise will run out of funds. Rather than find all the extra money needed to keep all states operating at their current levels through the end of the federal fiscal year, Congress used the SCHIP law's provision that allows for redistribution of unused funds after a three-year period. Unused FFY 2004 funds will carry states through early May, but a gap of about $716 million is expected by the end of September, according to the Congressional Research Service. The act also taps projected unspent FFY 2005 funds, but requires that no state will give up more than $20 million in the redistribution.

There's another catch as well. Normally, the federal government pays a higher matching rate for SCHIP enrollees than it does for Medicaid. Under the new legislation, states receiving extra help for SCHIP will get the enhanced rate only for children and pregnant women. States that cover other adults under SCHIP, such as parents of enrolled children, will receive the lower Medicaid matching rate.

The 11 states--Connecticut, Hawaii, Maryland, Minnesota, New Hampshire, New Mexico, Rhode Island, Tennessee...