Governors criticize provisions on SCHIP in fiscal year 2008 budget request from President Bush

A bipartisan group of governors at the National Governors Association winter meeting on Sunday asked Congress to provide $765 million in supplemental funds for SCHIP, the Bergen Record reports (Jackson, Bergen Record, 2/26).

States this year face a combined $700 million deficit in federal funds for SCHIP, according to a Congressional Budget Office estimate (Pear, New York Times, 2/25). New Jersey Gov. Jon Corzine (D), Georgia Gov. Sonny Perdue (R) and four other governors on Sunday held a news conference to request the supplemental funds (Howlett, Newark Star-Ledger, 2/26). In addition, six Democratic governors and seven Republican governors on Saturday sent a letter to congressional leaders to request the supplemental funds. According to the letter, "Without quick congressional action, our states, all facing federal shortfalls, will be forced to make harsh decisions affecting the lives of thousands of families." States with deficits in federal funds for SCHIP might have to freeze enrollment, restrict eligibility, increase premiums or reduce benefits in their programs (New York Times, 2/25). The governors also asked Congress to revise SCHIP provisions in the fiscal year 2008 budget proposal from President Bush. According to analysts, the proposal would create a combined $10 billion to $15 billion deficit in federal funds for SCHIP over five years (Tanner, AP/Detroit Free Press, 2/26). Bush has said that he seeks to return to the "original objective" of SCHIP: to provide health insurance for children in families with annual incomes lower than 200% of the federal poverty level. According to budget documents, 16 states cover children above that level, and New Jersey, covers children up to 350% of the federal poverty level (Kaiser Daily Health Policy Report, 2/6). According to the Record, "unanimity ... dissolved when it came to the long-term question of whether to insure children from families that make more than 200% of the federal poverty level ... and whether to insure adults" (Bergen Record, 2/26).

Comments
Corzine said that, without supplemental funds for SCHIP, the federal government will "end up paying for this in other ways -- uncompensated care, emergency rooms." Corzine added, "This is pay me now, or pay me later." Perdue said, "It's a matter of doing the right thing. It's nonpartisan. It's bipartisan." HHS Secretary Mike Leavitt said he will continue discussions with the governors but "offered little hope that the administration would accept governors' demands," the AP/Free Press reports. Leavitt said that states with surpluses in federal funds for SCHIP could use some of their funds to cover deficits in other states -- "an idea that has little support among governors," the AP/Free Press reports (AP/Detroit Free Press, 2/26).

Medicaid
In related news, NGA on Friday sent a letter to congressional leaders in opposition to a proposed Medicaid rule that governors said would cost states $5 billion over five years, CQ HealthBeat reports (Adams, CQ HealthBeat, 2/23). Under the rule, proposed by CMS in January, health care providers, rather than state and local governments, would have to receive all Medicaid reimbursements to which they are entitled. Dennis Smith, director of the Center for Medicaid and State Operations at CMS, said that the rule would help eliminate financing agreements under which providers receive state Medicaid reimbursements that exceed the actual cost of services and states receive extra matching funds from the federal government as a result. The rule would save the federal government an estimated $3.9 million over five years, CMS said (Kaiser Daily Health Policy Report, 1/16). The letter, signed by Corzine and Vermont Gov. Jim Douglas (R), said that the rule would "diminish longstanding, legitimate state funding mechanisms" CMS previously has approved. In addition, the letter said that the rule would implement "a significant cost shift to states that governors strongly oppose" and would "further impede our progress in implementing reform options and expanding affordable health insurance coverage." The letter also said that the Bush administration "is moving forward with these proposed changes without any input from Congress or governors." CMS spokesperson Jeff Nelligan said, "Our goal is to ensure that taxpayer dollars are spent wisely and that low-income Medicaid beneficiaries receive the care they need. We believe the lack of transparency and accountability in Medicaid financing undermines public confidence in the integrity of the program as it is impossible to track the flow of taxpayer dollars" (CQ HealthBeat, 2/23). Meanwhile, "some independent experts have questioned whether the administration has the legal authority to make unilateral cuts" in Medicaid, the Los Angeles Times reports (Alonso-Zaldivar, Los Angeles Times, 2/24).

State Budgets
The Wall Street Journal on Saturday examined how many states are on a bipartisan "spending spree." For example, Massachusetts last year enacted a $1.56 billion health insurance law, and California Gov. Arnold Schwarzenegger earlier this year announced a $12 billion proposal. According to the Journal, the "growing popularity of health care programs and higher teacher salaries raises the risk that states, giddy from surging revenue, may be in danger of expanding beyond their means, using short-term windfalls to create new long-term obligations at a time when tax increases remain unpopular with voters" (Cooper, Wall Street Journal, 2/24).

Broadcast Coverage
NPR's "All Things Considered" on Sunday featured comments from Arizona Gov. Janet Napolitano (D), chair of NGA, on the winter meeting. The segment includes comments from Sen. Chuck Grassley (R-Iowa), Reps. Nathan Deal (R-Ga.) and Janice Schakowsky (D-Ill.), and Georgia Gov. Sonny Perdue (R) ("All Things Considered," NPR, 2/26). Audio of the segment is available online. NPR's "Morning Edition" on Monday reported on SCHIP reauthorization (Rovner, "Morning Edition," NPR, 2/26). Audio of the segment is available online.