By Carolynn Race
Associate for Domestic Poverty, Health Care and Environmental Issues

In the resolution "On Advocacy on Behalf of the Uninsured," the 214th General Assembly (2002) of the Presbyterian Church (U.S.A.) directed the Presbyterian Washington Office to:

• Urge adequate funding for the Children's Health Insurance Program (SCHIP) so that health care coverage would be available for all children;
• Urge the expansion of SCHIP legislation to include the parents or caregivers of children covered under its provisions;
• Oppose federal tax credits as a method to address the health needs of the uninsured (the Assembly noted that federal tax credits would not be a helpful method to address the health needs of the uninsured because many low-income individuals do not file tax returns);
• Urge the expansion of Medicaid to insure more low-income and fixed-income persons, including the recently unemployed, and
• Encourage Congress to recognize the importance of universal health care — that is, equal, accessible, affordable, and high-quality health care for all persons residing in our nation.

As Congress prepares its national budget for fiscal year 2005, advocates are certain to face an uphill battle as they work to ensure adequate funding for health care. Congress faces a projected $521 billion budget deficit for fiscal year 2004. With many Members searching for ways to cut federal spending, advocating simply to defend current health care funding levels-particularly health programs for low-income adults and children-will be of critical importance.

Medicaid and the State Children's Health Insurance Program (SCHIP) provide health insurance to millions of Americans. Medicaid, the major public health insurance program for low-income Americans, covers 50 million people — half of whom are children. In addition, SCHIP covers more than 5 million children. Because of recent expansions of SCHIP and Medicaid, the proportion of uninsured low-income children (below 200 percent of poverty) has fallen-from 23 percent in 1997 (the year SCHIP was enacted)-to 14 percent in early 2003.1

However, such advances in insuring children and low-income adults are at risk. The Center on Budget and Policy Priorities found that many states, especially those with severe fiscal crises, have adopted policies to cap or freeze enrollment in Medicaid and SCHIP programs. In a December 2003 report, the Center found that states had adopted policies that cut about 1.2 to 1.6 million people off of Medicaid, SCHIP, or other state health programs — almost half of whom were low-income children.

The State Children's Health Insurance Program

SCHIP, the State Children's Health Insurance Program, was enacted in 1997. It provides a limited amount of federal matching funds to states for coverage of children and some parents with incomes too high to qualify for Medicaid, but for whom private health insurance was either unaffordable or unavailable. SCHIP targets children below the age of 19 whose family incomes are below 200 percent of poverty and do not have private health insurance, although states have exercised the option of expanding eligibility to higher income and age levels.

The Center on Budget and Policy Priorities noted that in the next few years, an increasing number of states will run out of federal funds for their SCHIP programs, and, unless the federal procedures for SCHIP are modified, a greater number of states having unspent federal funds in their SCHIP grants will see those funds revert to the federal Treasury. In addition, because of budget restraints, six states — Alabama, Colorado, Florida, Maryland, Montana, and Utah — have frozen enrollment in such programs as SCHIP. 2

In an analysis of the Bush Administration's budget proposal for FY 2005, Families USA noted:

The Administration's budget does not extend SCHIP funds that, without such an extension, are likely to expire and revert to the federal Treasury. The Administration estimates that, as a result, $63 million will expire from the SCHIP program at the end of fiscal year 2005. However, the budget documents fail to mention that an additional estimated $1.15 billion federal SCHIP funds will expire and revert to the Treasury at the end of fiscal year 2004 if Congress does not act this year. If this happens, nine states will run out of SCHIP funds by the end of fiscal year 2005. 3

In the last several years, Congress has worked in a bipartisan fashion to fix SCHIP funding problems. Supporters expect Congress to extend the expiring SCHIP funds this year. At press time, legislation had not as yet been offered to fix this funding issue.

Medicaid

Medicaid is the nation's public health program for low-income Americans. Funded by federal and state dollars, it finances health and long-term care for more than 50 million people. Of those, 38 million are low-income children and their parents, and 12 million are elderly and disabled individuals. As noted by the Kaiser Commission on Medicaid and the Uninsured, "although low-income children and their parents make up three-fourths of Medicaid beneficiaries, they account for only 30 percent of Medicaid spending. The elderly and people with disabilities comprise one-quarter of beneficiaries and 70 percent of Medicaid spending for services." 4

Faced with severe fiscal crises, the vast majority of states have taken action to reduce Medicaid spending growth. In January 2003, Families USA noted that 45 states took such action. To assist states in providing health care for Medicaid, Congress passed legislation (included in the $350 billion tax cut passed in 2003) to provide $20 billion in temporary state fiscal relief — including $10 billion to increase the federal share of Medicaid costs. In a recent Kaiser Commission survey, 42 states reported that fiscal relief helped them avoid further Medicaid budget shortfalls. The majority of states avoided, minimized, or postponed Medicaid cuts because of fiscal relief. 5

However, the temporary state fiscal relief funding expires on June 30, 2004. States are still facing tough financial times and may cut Medicaid and other health care funding — particularly for low-income communities. The Center on Budget and Policy Priorities noted that about 30 states are facing projected budget deficits totaling $39 to $41 billion for state fiscal year 2005, which generally begins on July 1, 2004. 6 The Administration's budget proposal for fiscal year 2005 did not include an extension of these temporary state fiscal relief funds. We expect Congress to address the issue this year.

How to help: Urge Congress to expand Medicaid and SCHIP

Even with SCHIP and Medicaid, 9 million children in the U.S. do not have health insurance coverage. Of those 9 million children, 5.8 million could be eligible for assistance from Medicaid or SCHIP. What prevents participation? The Kaiser Commission noted that low-income parents want coverage for their children, but cannot afford to pay for private insurance and often do not know that their children are eligible for public programs. Other barriers include difficulties with the application process, and confusion about welfare and immigration policy.

To remove these and other barriers to enrollment, states could simplify enrollment and renewal, expand outreach activities-such as promotional campaigns-so that the public is more informed about these programs, and remove barriers in law, including the prohibition of serving legal immigrants who have been in the U.S. less than five years who are not eligible for the program.

Senator Bob Graham (D-FL) has been working to pass S 845, the Immigrant Children's Health Improvement Act (ICHIA), to allow states the option to use federal funding to cover legal immigrant children and pregnant women under Medicaid and SCHIP. ICHIA was included in the Medicare prescription drug legislation passed by the Senate last year. However, the ICHIA provision was removed from the legislation in conference. Senator Graham is expected to offer ICHIA as an amendment to the Temporary Assistance for Needy Families (TANF) reauthorization legislation when it is brought to the Senate floor this year.

Suggested Action

Call the Capitol switchboard at (202) 224-3121 and ask to be connected with your Representative and/or your Senator(s). Tell your Members of Congress that 9 million children in the U.S. do not have health insurance coverage. Urge them to expand Medicaid and SCHIP so that low-income people have access to health care. Also urge them to support the Immigrant Children's Health Improvement Act (S 845).

Footnotes:

1. from CDC National Health Interview Survey, qtd. in Ku, Leighton and Sashi Nimalendran, "Improving Children's Health: A Chartbook about the Roles of Medicaid and SSCHIP," Center on Budget and Policy Priorities, January 2004.

2. Donna Cohen Ross and Laura Cox, "Enrollment Freezes in Six State Children's Health Insurance Programs Withhold Coverage for Eligible Children," Kaiser Commission on Medicaid and the Uninsured, December 2003.

3. Families USA, 'The Bush Administration's Fiscal Year 2005 Budget: Analysis of Key Health Care Provisions," February 4, 2004.

4. Kaiser Commission on Medicaid and the Uninsured, "The Medicaid Program at a Glance," January 2004.

5. Vernon Smith, et al. "States Respond to Fiscal Pressure: A 5--State Update of State Medicaid Spending and Cost Containment Efforts," Kaiser Commission on Medicaid and the Uninsured, January 2004.

6. Nicholas Johnson and Bob Zahradnik, "State Budget Deficits Projected for Fiscal Year 2005," Center on Budget and Policy Priorities, revised February 6, 2004.