March 13, 2007
CBO ESTIMATES PRESIDENT'S SCHIP PROPOSAL WOULD LEAD TO LARGE ENROLLMENT DECLINES AND FUNDING SHORTFALLS
By Edwin Park and Matthew Broaddus
On
March 9, the Congressional Budget Office issued detailed estimates of the
President’s fiscal year 2008 budget proposal to reauthorize the SCHIP program,
including estimates of SCHIP enrollment levels and of the federal SCHIP funding
shortfall that states will experience over the next five years.
The CBO estimates show:
- Under the Administration’s proposal,
the number of children and pregnant women covered through SCHIP at some point
during the year would decline from 7.6 million in 2007 — assuming that Congress
closes the current fiscal year 2007 shortfalls — to 6.2 million by 2012, a
reduction of 1.4 million.
Total enrollment would decline by 1.6 million under the President’s
proposal.
- States would still face a federal funding
shortfall of $4.6 billion over the next five years (2008-2012) under the
President’s proposal. By 2012, some 37 states would face a combined
federal funding shortfall of $2 billion.
- These shortfall estimates reflect the
application of the Administration’s proposal to reduce the federal matching rate
for certain SCHIP beneficiaries, which artificially reduces the state need for
federal SCHIP funds while shifting costs to states (and creating fiscal
incentives for states to scale back coverage for those beneficiary groups).
Without taking this provision into account, the CBO estimates indicate that
states would face a federal funding shortfall of as much as $7.6 billion over
five years under the Administration’s proposal.
- As a result, the proposal would reduce
by less than half the $13.4 billion federal funding shortfall which CBO
estimates states would experience over the next five years if SCHIP is
reauthorized at its current $5 billion funding level, as is assumed under the
CBO baseline.
The CBO estimates of the Administration’s SCHIP budget proposal are similar to
estimates previously issued by the Center on Budget and Policy Priorities.
The CBO estimates demonstrate that the Administration’s proposal provides
substantially less federal funding than states will need just to sustain their
existing SCHIP programs, let alone to expand coverage to more low-income
children who are uninsured.
End Notes:
Congressional Budget Office, “Additional Information on CBO’s Estimate of the
Administration’s SCHIP Proposals,” March 9, 2007.
These enrollment
figures represent the number of children and pregnant women enrolled at any
time over the course of a year. According to CBO, the number of individuals
enrolled in SCHIP in any given month would be about 40 percent lower than
these figures. The number of children and pregnant women enrolled in any
given month will be about 4.6 million in 2007 if the 2007 shortfall is
closed, but fall to about 3.7 million by 2012 under the Administration’s
proposal, a reduction of over 800,000.
The total
enrollment figures also include some parents of children enrolled in
Medicaid and SCHIP and some childless adults covered through waivers. The
total number of individuals enrolled at any point during the year will be
about 5 million in 2007 if the 2007 shortfall is closed and would decline to
about 4 million by 2012 under the Administration’s proposal, a reduction of
1 million individuals.
The
Administration’s proposal would reduce the federal matching rate from the
higher SCHIP rate (on average, 70 percent) to the lower Medicaid matching
rate (on average, 57 percent) for children with family incomes above 200
percent of the poverty line (just over $34,000 for a family of three in
2007) and for parents and other adults covered through waivers.
Congressional Budget Office, “Fact Sheet for CBO’s March 2007 Baseline: State
Children’s Health Insurance Program,” February 23, 2007.
See Edwin Park
and Matt Broaddus, “SCHIP Reauthorization: President’s Budget Would Provide
Less than Half the Funds that States Need to Maintain SCHIP Enrollment,”
https://www.cbpp.org/2-22-07health.htm Center on Budget and Policy Priorities, Revised March 13, 2007 (which
estimates that under the Administration’s budget proposal, states would face
a federal funding shortfall of $7 billion over the five-year period
2008-2012). The modest difference between the CBPP and CBO shortfall
estimates is likely due primarily to differing assumptions about how the
$4.8 billion in new SCHIP funds that the Administration proposes over the
next five years (i.e., the $4.8 billion in funding it would provide above
the baseline funding level) would be allocated among the states.
|