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Federal SCHIP Financing: Current Law and Vetoed Legislation (H.R. 976))

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Presented at the National Academy for State Health Policy's 20th Annual State Health Policy Conference in Denver, Colorado. Author: Chris L. Peterson

Presented at the National Academy for State Health Policy's 20th Annual State Health Policy Conference in Denver, Colorado. Author: Chris L. Peterson

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  • 1. Federal SCHIP Financing: Current Law and Vetoed Legislation (H.R. 976) Chris L. Peterson Specialist in Health Care Financing Congressional Research Service NASHP’s 20th Annual State Health Policy Conference Denver, CO October 15, 2007
  • 2. Outline • Current-law snapshot of FY2008 SCHIP financing • SCHIP financing under H.R. 976 – Allotments – Shortfalls – Bonus payments
  • 3. Current-law snapshot of FY2008 SCHIP financing
  • 4. Temporary FY2008 SCHIP Allotments • Like FY2007, $5 billion appropriated • Allotments based on current-law formula (CPS) • FY2008 allotments available through 11/16/07 • After 11/16, FY2005-FY2007 funds still available • If FY08 allotments available for entire year then 21 states would face shortfalls of $1.6 billion
  • 5. Projected shortfalls IF FY08 allotment available for entire year Millions of dollars Projected Month of Projected Month of State State shortfalls shortfall shortfalls shortfall Alaska $11.8 March-08 Mississippi $55.8 April-08 Arkansas $16.6 August-08 Missouri $44.2 May-08 California $342.5 June-08 Nebraska $14.1 May-08 Georgia $199.9 March-08 NJ $191.1 March-08 Illinois $253.2 March-08 NC $49.5 June-08 Iowa $35.8 March-08 ND $4.9 May-08 Louisiana $3.9 September-08 Ohio $11.9 September-08 Maine $17.3 March-08 Oklahoma $21.5 July-08 Maryland $88.7 March-08 RI $44.1 March-08 Mass. $157.3 March-08 SD $0.7 September-08 Minnesota $41.6 April-08 State Total $1,606.5   Reflects redistribution of $108.8 million in other states’ projected unspent FY2005 allotments.
  • 6. H.R. 976: Allotments
  • 7. HOW LONG? Allotments’ period of availability • Current law (through FY07) – 3 years • H.R. 976 – 3 years through FY07 allotment – 2 years for FY08+ allotments
  • 8. HOW MUCH? Available for SCHIP Allotments 18 16 16 13.75 14 11.85 Current law H.R. 976 12 10.675 Billions of dollars 10 9.125 8 6 4.2 5.0 4 4.1 3.2 2 0 2006 2009 2001 2004 2007 1998 1999 2000 2002 2003 2005 2008 2010 2011 2012 Fiscal Year
  • 9. WHO? The allotment formula (forest view) • Current law – Provides national appropriation – Formula determines each states’ share of total • H.R. 976 – Formulas determines each states’ $ amount – If national appropriation is enough, state gets $ • If not enough, state gets $ - % • If more than enough, extra national amount goes into bonus pool
  • 10. WHO? The allotment formula (tree view) • H.R. 976 allotments (calculating $) – FY08: Highest of four numbers, plus 10% – FY09, FY11: Last year’s allotment, plus growth – FY10, FY12: REBASE -- Last year’s spending, plus growth
  • 11. WHO? The allotment formula (weed view) • “plus growth” – Allotment increase factor • % increase in projected national per capita health care spending (between 6% and 7% annually) • % increase in projected population growth among children, plus 1 percentage point (between 1.1% and 1.5% annually) – Approved program expansions, increase FY09- FY11 allotments by: • “Additional expenditures that are attributable to the eligibility or benefit expansion”
  • 12. WHO? The allotment formula (DNA view) • 4 factors for determining FY08 allotment under H.R. 976 – FY07 spending, plus growth – FY07 allotment, plus growth – For FY07 shortfall states, FY07 projected spending from November 06 submission (or, for NC, May 06 submission) plus growth – FY08 projected spending (August 07 submission) • H.R. 976: Pick the largest, add 10%, provide to state (if enough available nationally)
  • 13. H.R. 976: Shortfalls
  • 14. H.R. 976: Contingency Fund • A state could receive payments from the Contingency Fund if: – Projected shortfall (excluding redistribution): Prior-year allotment balances AND new allotment (including adjustment for program expansions) still not enough $, AND – Enrollment exceeds target level • Payment would be equal to projected expenditures on enrollees above target level • Total payments could not exceed 20% of national allotments for the year • Payment to be made during the year, with retrospective adjustment
  • 15. H.R. 976: Redistribution • A state can receive redistributed FY06+ funds if projected shortfall: – Prior-year allotment balances AND new allotment (including adjustment for program expansions) AND Contingency Fund payment still not enough • Payment would be whatever necessary (from available redistribution funds) to eliminate shortfalls • Unspent funds not necessary for eliminating shortfalls would go into bonus pool
  • 16. H.R. 976: Bonus Payments
  • 17. H.R. 976: Bonus payments • Provide cash to states that: – Increase kids’ enrollment in Medicaid and, separately, SCHIP above “baseline enrollment” – Implement 4 of 7 specified enrollment and retention efforts • Payments are a percent of the “state share” for spending on kids above “baseline” • Payments are greater for increasing Medicaid enrollment (among current eligibles) vs. SCHIP enrollment
  • 18. H.R. 976 bonus payments: 4 of 7 efforts • To qualify for bonus payments, a state would have to do 4 of these 7: (1) continuous eligibility, (2) liberalization of asset requirements, (3) elimination of in-person interview requirement, (4) use of joint application for Medicaid and SCHIP, (5) automatic renewal, (6) presumptive eligibility for children, and (7) express lane
  • 19. H.R. 976 bonus payments: Source of $ • Source of funds – Initial $3 billion appropriation – National appropriation not used for allotments – Amounts not used for redistribution – Contingency Fund balances in excess of 20% of annual allotment appropriation – Amounts set aside for transitional childless adult payments not spent by 9/30/09
  • 20. H.R. 976 bonus: ‘Baseline enrollment’ Purpose: Establish ‘baseline enrollment’ level for each state, based on actual enrollment data. The ‘baseline’ represents where states’ enrollment would probably be if they did little to increase enrollment. Bonus payments are intended to reward states that take action leading to enrollment above the baseline. • FY08 baseline: FY07 average monthly enrollment of Medicaid / SCHIP children, PLUS state’s child-population growth, PLUS 1 percentage point • FY09+ baseline: Last year’s baseline, PLUS state’s child-population growth, PLUS 1 percentage point
  • 21. H.R. 976 bonus payment amounts For enrollment above the baseline … Medicaid SCHIP 1st tier (for growth 15% of state share 10% of state share above baseline for projected for projected <3% in Medicaid, expenditures expenditures <7.5% in SCHIP) above baseline above baseline 2nd tier (for growth 60% of state share 40% of state share above baseline for projected for projected >3% in Medicaid, expenditures expenditures >7.5% in SCHIP) above baseline above baseline
  • 22. “Mr. Peterson, may I be excused? My brain is full.”