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For the Record

Words, Actions at Odds on Children's Health Care

U.S. Poised to Take Back $1.1 Billion Despite Bush's Vow

By Ceci Connolly
Washington Post Staff Writer
Saturday, September 25, 2004; Page A05

In his convention address in New York, President Bush announced a new $1 billion initiative to enroll "millions of poor children" in two popular government health programs. But next week, the Bush administration plans to return $1.1 billion in unspent children's health funds to the U.S. Treasury, making his convention promise a financial wash at best.

The loss of $1.1 billion in federal money means six states participating in the State Children's Health Insurance Program face budget shortfalls in 2005; it is enough money to provide health coverage for 750,000 uninsured youngsters nationwide, according to two new analyses by advocacy organizations.

"If the Bush administration really cared about covering uninsured children, one of the things it could do immediately is make sure this $1 billion is used for SCHIP," said Debra Ness, president of the National Partnership for Women and Families. "The irony is this president talks constantly about not leaving any child behind and how he is going to cover so many kids. In truth, that ended up being false. He's just moving money around."

Over the objections of the National Governors Association and a bipartisan coalition of lawmakers, Bush opposes giving states more time to spend the money. In previous years he supported an extension, but he struck it from this year's proposed budget. Even if Bush belatedly endorses a bill extending the SCHIP spending deadline, it will come at a price: Congress is required to trim $1.1 billion elsewhere in the budget if it lets states keep the money.

SCHIP, created in 1997, is a federal-state initiative widely popular among public officials and the private sector that provides $40 billion in health care matching funds to states over 10 years. Despite its popularity, the most recent Census Bureau data show that 8.4 million American children remain uninsured, prompting Bush to declare his desire to enroll many more in SCHIP.

"America's children must have a healthy start in life," he said in his convention speech. "In a new term, we will lead an aggressive effort to enroll millions of poor children who are eligible but not signed up for the government's health insurance programs. We will not allow a lack of attention, or information, to stand between these children and the health care they need."

The statement was one of the few new health ideas Bush has introduced in the 2004 campaign, and it sparked enthusiasm in social policy circles. Soon, however, state officials, budget analysts and children's advocates discovered there was no new money for SCHIP.

"When you do outreach, it doesn't help if there's no money to cover people," said Ron Pollack, whose liberal consumer group Families USA calculated the impact of the $1.1 billion reduction. Based on current formulas, that translates into coverage for 2,500 children in the District, 13,900 in Maryland and 6,600 in Virginia.

Initially, states had difficulty enrolling many of the millions of children eligible for the program. In some instances, language barriers or a parent's reluctance to register with the government prevented broad participation; in other cases states had devised complicated multi-page applications or were unwilling to spend their portion of the funds.

But SCHIP enrollment has steadily risen from fewer than 1 million in 1998 to the current 5.8 million, and most experts say states are depleting previous years' surpluses.

"SCHIP spending is now exceeding annual allotments," said Edwin Park, a senior health policy analyst at the Center on Budget and Policy Priorities. According to the center's analysis, six states will drain those surpluses this year if the $1.1 billion is returned to the Treasury as planned at midnight Sept. 30. By 2007, 17 states are projected to run out of money.

Kevin Keane, spokesman for the Department of Health and Human Services, said the vast majority of states estimate they cannot spend their entire 2005 federal allocation. If some states have shortfalls, he said, the HHS secretary can shift some funds. Keane said the administration views the president's new "Cover the Kids" campaign as an additional $1 billion for SCHIP. The money will be distributed over two years in grants to some states, community groups and religious organizations, he said.

"The president believes we need to try a new, community-based approach to enrolling children in SCHIP," Keane said. "The Cover the Kids campaign is his vision for more effectively reaching eligible children and getting them enrolled."

To Pollack, even the name of Bush's initiative is "extraordinarily disingenuous." For several years, he noted, the Robert Wood Johnson Foundation has run a 50-state outreach project called "Covering Kids and Families."

© 2004 The Washington Post Company