Over 600,000 kids at risk of losing health insurance

The State Children's Health Insurance Program, by most measures, has been a big success. Jointly funded by states and the federal government, SCHIP now covers over 4 million kids, most of whom otherwise wouldn't have access to health care.

But according to a new analysis by the Center for Budget and Policy Priorities, a major shortfall in federal spending for SCHIP threatens to force many children off the program, unless Congress intervenes:

17 states will have nearly $921 million less in federal SCHIP funds than they will need in fiscal year 2007 to maintain their existing SCHIP programs ...

Without additional federal funds to close these gaps, these 17 states will either have to increase state funding for SCHIP or scale back their SCHIP programs by reducing eligibility, capping enrollment, eliminating benefits, increasing beneficiary cost-sharing or cutting payments to providers.

In states that cut back their programs, significant numbers of SCHIP beneficiaries will be at risk: the $921 million in shortfalls projected for 2007 is equivalent to the cost of covering 630,000 children under the SCHIP program.

Why the federal shortfall? The Center says that one reason is the success of the program, which has expanded its reach causing costs to go up. The other reason is that Washington leaders have been slashing the program's budget:

[T]he overall federal funding level for SCHIP fell 26 percent in fiscal years 2002, 2003, and 2004 (from $4.25 billion per year in 2000 and 2001 to $3.12 billion each year from 2002 through 2004), forcing states to draw down their funds from prior years more rapidly. Finally, after fiscal years 2004 and 2005, some $1.4 billion in unspent SCHIP funds from prior years were allowed to expire and revert to the U.S. Treasury rather than being extended and redistributed to states that could use these funds to avert, or reduce the magnitude of, the approaching funding shortfalls.

The list of 17 states facing a shortfall in federal help is a diverse one, ranging from Massachusetts to Alaska (scroll down to see a table here). Four are in the South: Georgia, Louisiana, Mississippi and North Carolina.

Well, at least there's another $127 to $150 billion available for emergency war spending.