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

Chris L.  Peterson
Specialist in Health Care Fin...
Outline

- Current-law snapshot of FY2008 SCHIP
financing

- SCHIP financing under H. R. 976
— Allotments
- Shortfalls
- B...
Current—| aw snapshot of FY2008
SCHIP financing
Temporary FY2008 SCHIP Allotments

- Like FY2007, $5 billion appropriated

- Allotments based on current-law formula (CPS)...
Projected shortfalls E FY08 allotment
available for entire year

   

Millions of dollars
Projected Month of Projected Mon...
H. R. 9:76:
Allotments
HOW LONG? 
Allotments’ period of availability

- Current law (through FY07)
— 3 years

- H. R. 976
- 3 years through I-W07...
HOW MUCH?  Available for SCHIP Allotments

— —Current law -5- H. R. 976

 

42
0064.2
111.1.

m. .

A C 1
0 8 6 4. 2 O
1.....
WHO?  The allotment formula (forest view)

- Current law

— Provides national appropriation
- Formula determines each stat...
WHO?  The allotment formula (tree view)

H. R. 976 allotments (calculating $)

-FY08: Highest of four numbers,  plus 10°/ ...
WHO?  The allotment formula (weed view)

“plus growth”

— Allotment increase factor

°/ o increase in projected national p...
WHO?  The allotment formula (DNA view)

- 4 factors for determining FY08 allotment
under H. R. 976
— FY07 spending,  plus ...
#1.”:  .1 .9 ca» 4 _. :.. ... ..ca. .
9.?  E3 0.. .! r. .q. & .3 .8:->8. 5:86 IL!  9 is 9.4.

 ! mi

i~: lh‘IO 33>; 
Egan ...
H. R. 976:
Shortfalls
H. R. 976: Contingency Fund

A state could receive payments from the
Contingency Fund if: 
— Projected shortfall (excludin...
H. R. 976: Redistribution

- A state can receive redistributed FY06+ funds
if projected shortfall: 

— Prior-year allotmen...
H. R. 976:
Bonus Payments
H. R. 976: Bonus payments

- Provide cash to states that: 

— Increase kids’ enrollment in Medicaid and, 
separately,  SCH...
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) ...
H. R. 976 bonus payments:  Source of $

- Source of funds
—Initia|  $3 billion appropriation
-National appropriation not u...
H. R. 976 bonus:  ‘Baseline enrollment’

Purpose:  Establish ‘baseline enrollment’ level for
each state,  based on actual ...
H. R. 976 bonus payment amounts

For enrollment above the baseline 

" Medicaid

15‘ tier (for gro  r 0% of state share
4
...
“Mr.  Peterson,  may I be excused?  My brain is full. ”
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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

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

  1. 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 5- % ‘ Denver, C0 ‘_; _.: .+ , ‘i‘ , "'}’ '3" W ‘V October 15,2007 ’ *”"“*** .
  2. 2. Outline - Current-law snapshot of FY2008 SCHIP financing - SCHIP financing under H. R. 976 — Allotments - Shortfalls - Bonus payments
  3. 3. Current—| aw snapshot of FY2008 SCHIP financing
  4. 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. 5. Projected shortfalls E FY08 allotment available for entire year Millions of dollars Projected Month of Projected Month of State shortfalls shortfall State 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 $1 1.9 September-08 Maine $17.3 March-O8 Oklahoma $21.5 July-08 Maryland $88.7 March-O8 RI $44.1 March-08 Mass. $157.3 March-O8 SD $0.7 September-08 Minnesota $41.6 April-08 Reflects redistribution of $108.8 million in other states’ projected unspent FY2005 allotments.
  6. 6. H. R. 9:76: Allotments
  7. 7. HOW LONG? Allotments’ period of availability - Current law (through FY07) — 3 years - H. R. 976 - 3 years through I-W07 allotment — 2 years for FY08+ allotments
  8. 8. HOW MUCH? Available for SCHIP Allotments — —Current law -5- H. R. 976 42 0064.2 111.1. m. . A C 1 0 8 6 4. 2 O 1.. 2.2. 3 mco____n ~Ho~ Hfiom ofiom moom moom - Room ooom Year meow . eoom n meow SCH Noom Hoom ooom mmmfi wmmfi
  9. 9. WHO? The allotment formula (forest view) - Current law — Provides national appropriation - Formula determines each states’ share of total 0 H. R. 976 — Formulas determines each states’ $ amount — If national appropriation is enough, state gets $ 0 If not enough, state gets $ - °/ o - If more than enough, extra national amount goes into bonus pool
  10. 10. WHO? The allotment formula (tree view) H. R. 976 allotments (calculating $) -FY08: Highest of four numbers, plus 10°/ o —FY09, FY11: Last year's allotment, plus growth —FY10, FY12: REBASE -- Last year's spending, plus growth
  11. 11. WHO? The allotment formula (weed view) “plus growth” — Allotment increase factor °/ o increase in projected national per capita health care spending (between 6% and 7% annually) °/ o increase in projected population growth among children, plus 1 percentage point (between 1.1°/ o and 1.5°/ o annually) — Approved program expansions, increase FY09- FY11 allotments by: “Additional expenditures that are attributable to the eligibility or benefit expansion”
  12. 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. 13. #1.”: .1 .9 ca» 4 _. :.. ... ..ca. . 9.? E3 0.. .! r. .q. & .3 .8:->8. 5:86 IL! 9 is 9.4. ! mi i~: lh‘IO 33>; Egan ‘.5.’ u9_3o. .=o “Pa. .. . = . _. 083.. .3 .5. .035 8:050: _u90o_Dk_ 8 n: oE. o-4 n= : ow Sent «cacao. .. coa_. .nnEO0
  14. 14. H. R. 976: Shortfalls
  15. 15. 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°/ o of national allotments for the year Payment to be made during the year, with retrospective adjustment
  16. 16. 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
  17. 17. H. R. 976: Bonus Payments
  18. 18. 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
  19. 19. 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
  20. 20. H. R. 976 bonus payments: Source of $ - Source of funds —Initia| $3 billion appropriation -National appropriation not used for allotments —Amounts not used for redistribution —Contingency Fund balances in excess of 20°/ o of annual allotment appropriation —Amounts set aside for transitional childless adult payments not spent by 9/30/09
  21. 21. 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 avera e monthly enrollment of Medicaid / S HIP 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
  22. 22. H. R. 976 bonus payment amounts For enrollment above the baseline " Medicaid 15‘ tier (for gro r 0% of state share 4 above baseline for projected expenditures for projected for projected expenditures expenditures
  23. 23. “Mr. Peterson, may I be excused? My brain is full. ”

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