Order Code RL30473
CRS Report for Congress
Received through the CRS Web
State Children’s Health Insurance Program
(SCHIP): A Brief Overview
Updated March 23, 2005
Elicia J. Herz
Specialist in Social Legislation
Bernadette Fernandez
Analyst in Social Legislation
Chris L. Peterson
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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State Children’s Health Insurance Program (SCHIP):
A Brief Overview
Summary
The Balanced Budget Act of 1997 (BBA 97; P.L. 105-33) established the State
Children’s Health Insurance Program (SCHIP) under a new Title XXI of the Social
Security Act. In general, this program allows states to cover targeted low-income
children with no health insurance in families with income that is above Medicaid
eligibility levels. To date, the upper income eligibility limit under SCHIP has
reached as high as 350% of the federal poverty level, or FPL (in one state).
States may choose among three benefit options when designing their SCHIP
programs. They may enroll targeted low-income children in Medicaid, create a new
separate state program, or devise a combination of both approaches. States choosing
the Medicaid option must provide all mandatory benefits and all optional services
covered under the state plan, and must follow the nominal Medicaid cost-sharing
rules. In general, separate state programs must follow certain coverage and benefit
options outlined in SCHIP law. While some cost-sharing provisions vary by family
income, the total annual aggregate cost-sharing (including premiums, enrollment
fees, deductibles, copayments, coinsurance, and other similar charges) for any family
may not exceed 5% of total income in a year. Preventive services are exempt from
cost-sharing.
Nearly $40 billion has been appropriated for SCHIP for FY1998 through
FY2007. Annual allotments among the states are determined by a formula that is
based on a combination of the number of low-income children and low-income
uninsured children in the state, and includes a cost factor that represents the average
health service industry wages in the state compared to the national average. Like
Medicaid, SCHIP is a federal-state matching program. While the Medicaid federal
medical assistance percentage (FMAP) ranged from 50% to 76.00% in FY2006, the
enhanced SCHIP FMAP ranged from 65% to 83.20% across states. For federal
matching purposes, a 10% cap applies to state administrative expenses under SCHIP.
All 50 states, the District of Columbia, and five territories have SCHIP
programs in operation. As of January 2005, 17 use Medicaid expansions, 18 use
separate state programs, and 21 use a combination approach. Since initial enrollment
in 1997-1998, many states have amended their original SCHIP plans. Among many
changes to SCHIP at the state level, approved amendments and waivers expand
eligibility, define new copayment standards, and/or modify benefit packages.
Approximately 5.9 million children were enrolled in SCHIP during FY2003.
Roughly 4.4 million were served by separate programs and 1.5 million were enrolled
in Medicaid expansions. In addition, eight states reported enrolling nearly 484,000
adults in SCHIP through program waivers. Spending was slow in the early years of
SCHIP due at least in part to lower than expected enrollment. Also, at the end of
FY2004, roughly $1.3 billion in unspent funds expired. However, more recent
spending patterns and estimates of future funding needs suggest that some states
could exhaust their available federal funds after FY2005.

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Contents
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Cost-Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Federal appropriations and distribution among the states and
territories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reallocation of unspent federal funds . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Other factors affecting federal financing . . . . . . . . . . . . . . . . . . . . . . . . 6
General Program Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trends in Enrollment and Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Forthcoming SCHIP Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SCHIP Legislative History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Tables
Table 1. SCHIP Enrollment Data for the 50 States and the District of
Columbia for FY2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Table 2. Redistribution States for FY1998 through FY2002 . . . . . . . . . . . . . . . 19
Table 3. Status of FY1998-2004 Federal SCHIP Funds, by State
and Territory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Table 4. Status of FY2005 Federal SCHIP Funds, by State and Territory . . . . . 22

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State Children’s Health Insurance Program
(SCHIP): A Brief Overview
The Balanced Budget Act of 1997 (BBA 97; P.L. 105-33) established the State
Children’s Health Insurance Program (SCHIP) under a new Title XXI of the Social
Security Act. The program offers federal matching funds to states and territories to
provide health insurance to certain low-income children.
Eligibility
In general, Title XXI defines a targeted low-income child as one who is under
the age of 19 years with no health insurance, and who would not have been eligible
for Medicaid under the rules in effect in the state on March 31, 1997. States can set
the upper income level for targeted low-income children up to 200% of the federal
poverty level (FPL),1 or if the applicable Medicaid income level for children is at or
above 200% FPL prior to SCHIP, the upper income limit may be raised an additional
50 percentage points above that level.
Within these general rules, states may provide medical assistance to qualifying
children in two basic ways. They may cover such children under their Medicaid
programs and/or they may create a separate SCHIP program for this purpose. (More
details on available benefits under each approach are described in the next section.)
When states provide Medicaid coverage to targeted low-income children, Medicaid
rules typically apply. When states provide coverage to targeted low-income children
through separate SCHIP programs, Title XXI rules typically apply. In both cases, the
federal share of program costs comes from federal SCHIP appropriations (also
described in further detail below).
Title XXI does not establish an individual entitlement to benefits. Instead, Title
XXI entitles states with approved state plans for Medicaid coverage or separate
SCHIP programs to pre-determined federal allotments based on a distribution
formula set in the law (explained further below). However, targeted low-income
children covered under Medicaid are entitled to the benefits offered under that
program as dictated by Medicaid law. No such individual entitlement exists for
targeted low-income children covered in separate SCHIP programs.
Under Medicaid, states may cover targeted low-income children in the following
ways: (1) by establishing a new optional eligibility group for such children as
1 For example, in 2003, the poverty guideline in the 48 contiguous states and the District of
Columbia was $18,400 for a family of four (Federal Register, vol. 68, no. 26, Feb. 7, 2003,
pp. 6456-6458). In 2005, the comparable poverty guideline is $19,350 for a family of four
(Federal Register, vol. 70, no. 33, Feb. 18, 2005, pp. 8373-8375).

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authorized in Title XXI, and/or (2) by liberalizing the financial rules2 for any of
several existing Medicaid eligibility categories.
Many states have chosen to cover targeted low-income children under existing
Medicaid eligibility pathways, especially Medicaid’s poverty-related child groups,
rather than by establishing the Title XXI optional coverage group.3 Such a strategy
reduces the administrative burden of creating and implementing a new coverage
group.4
States may also provide coverage to targeted low-income children by creating
a separate SCHIP program. States define the group of targeted low-income children
who may enroll in separate SCHIP programs. Title XXI allows states to use the
following factors in determining eligibility: geography (e.g., sub-state areas or
statewide), age (e.g., subgroups under 19), income and resources, residency,
disability status (so long as any standard relating to that status does not restrict
eligibility), access to other health insurance, and duration of SCHIP enrollment.
As of FY2003, the upper income eligibility limit under SCHIP had reached
350% of the FPL (see Table 1; also see notes regarding Arkansas and Tennessee on
this table).5 Twenty-five states and the District of Columbia had established upper
income limits at 200% FPL. Another 13 states exceeded 200% FPL. The remaining
11 states set maximum income levels below 200% FPL.6
2 Under Medicaid law, Section 1902(r)(2) authority may be used to liberalize income and
resource methodologies for a number of groups, including, for example, poverty-related
children (i.e., those under 6 in families with income up to 133% FPL and those between 6
and 18 in families with income up to 100% FPL). Family coverage is provided under
Section 1931. This section has its own provisions for liberalizing income and resource
standards.
3 Personal communication with Judy Rhoades, Centers for Medicare and Medicaid Services,
June 5, 2003.
4 Because individuals can have other health insurance and still be covered by Medicaid, this
approach also allows states to bring into Medicaid otherwise ineligible higher-income
children regardless of their other health insurance status. Under this strategy, for example,
states can provide Medicaid benefits to additional children whose existing health insurance
is limited (sometimes referred to as under-insured). When states liberalize the financial
rules for existing Medicaid eligibility groups, the federal share of the costs for services
provided to the subset without other health insurance — the targeted low-income children
— is paid for out of SCHIP funds (described in further detail below). The federal share of
the costs for services delivered to the remaining children with other health insurance is paid
for by Medicaid.
5 For determining income eligibility for SCHIP and Medicaid, some states apply “income
disregards.” These are specified dollar amounts subtracted from gross income to compute
net income, which is then compared to the applicable income criterion. Such disregards may
increase the effective income level above the stated standard.
6 States may apply resource or asset tests in determining financial eligibility, but are not
required to do so. Individuals must have resources for which the dollar value is less than
a specified standard amount in order to qualify for coverage. States determine what items
(continued...)

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CRS-3
Benefits
As noted above, when designing their SCHIP programs, states may cover
targeted low-income children under their Medicaid program, create a new separate
SCHIP program, or devise a combination of both approaches. Under limited
circumstances, states have the option to purchase a health benefits plan that is
provided by a community-based health delivery system or to purchase family
coverage under a group health plan.
States that offer Medicaid coverage to targeted low-income children must
provide the full range of mandatory Medicaid benefits, as well as all optional services
specified in their state Medicaid plans. States that choose to create separate SCHIP
programs may elect any of three benefit options: (1) a benchmark benefit package,
(2) benchmark equivalent coverage, or (3) any other health benefits plan that the
Secretary of Health and Human Services determines will provide appropriate
coverage to the targeted population of uninsured children.7
A benchmark benefit package is one of the following three plans: (1) the
standard Blue Cross/Blue Shield preferred provider option plan offered under the
Federal Employees Health Benefits Program (FEHBP), (2) the health coverage that
is offered and generally available to state employees in the state involved, and (3) the
health coverage that is offered by a health maintenance organization (HMO) with the
largest commercial (non-Medicaid) enrollment in the state involved.
Benchmark-equivalent coverage is defined as a package of benefits that has the
same actuarial value as one of the benchmark benefit packages. A state choosing to
provide benchmark-equivalent coverage must cover each of the benefits in the “basic
benefits category.” The benefits in the basic benefits category are inpatient and
outpatient hospital services, physicians’ surgical and medical services, lab and x-ray
services, and well-baby and well-child care, including age-appropriate
immunizations. Benchmark-equivalent coverage must also include at least 75% of
the actuarial value of coverage under the benchmark plan for each of the benefits in
the “additional service category.” These additional services include prescription
drugs, mental health services, vision services, and hearing services. States are
encouraged to cover other categories of service not listed above. Abortions may not
be covered, except in the case of a pregnancy resulting from rape or incest, or when
an abortion is necessary to save the mother’s life.
6 (...continued)
constitute countable resources and the dollar value assigned to those countable resources.
Assets may include, for example, cars, savings accounts, real estate, trust funds, tax credits,
etc.
7 When the law establishing SCHIP was enacted, existing state programs in Florida, New
York, and Pennsylvania were designated as meeting the minimum benefit requirements
under SCHIP (i.e., these programs were grandfathered into SCHIP).

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Cost-Sharing
Cost-sharing refers to the out-of-pocket payments made by beneficiaries of a
health insurance plan. Cost-sharing may include, for example, monthly premiums,
enrollment fees, deductibles, copayments, coinsurance and other similar charges.
Federal law permits states to impose cost-sharing for some beneficiaries and
some services under SCHIP. States that cover targeted low-income children under
Medicaid must follow the nominal cost-sharing rules of the Medicaid program.
If a state implements SCHIP through a separate state program, premiums or
enrollment fees for program participation may be imposed, but the maximum
allowable amount is dependent on family income. For all families with incomes
under 150% FPL and enrolled in separate state programs, premiums may not exceed
the amounts set forth in federal Medicaid regulations. Additionally, these families
may be charged service-related cost-sharing, but such cost-sharing is limited to (1)
nominal amounts defined in federal Medicaid regulations for the subgroup with
income below 100% FPL, and (2) slightly higher amounts defined in SCHIP
regulations for families with income between 101% and 150% FPL. For a family
with income above 150% FPL, cost-sharing may be imposed in any amount, provided
that cost-sharing for higher-income children is not less than cost-sharing for lower-
income children.
Most important, the total annual aggregate cost-sharing (including premiums,
deductibles, copayments, and any other charges) for all children in any SCHIP family
may not exceed 5% of total family income for the year. In addition, states must
inform families of these limits and provide a mechanism for families to stop paying
once the cost-sharing limits have been reached.
Preventive services are exempt from cost-sharing for all families regardless of
income. The Centers for Medicare and Medicaid Services (CMS) defines preventive
services to include the following: all healthy newborn inpatient physician visits,
including routine screening (inpatient and outpatient); routine physical examinations;
laboratory tests; immunizations and related office visits; and routine preventive and
diagnostic dental services (for example, oral examinations, prophylaxis and topical
fluoride applications, sealants, and x-rays).
Financing
Federal financing of SCHIP includes three major components: (1) total federal
appropriations and the distribution of those funds among the states and territories, (2)
reallocation of unspent federal funds, and (3) other factors affecting federal financing
including the federal matching rate and caps on administrative expenses.
Federal appropriations and distribution among the states and
territories. BBA 97 appropriated a total of $39.7 billion for SCHIP for FY1998

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through FY2007.8 The funding level by fiscal year varies across time. The total
annual appropriation for each of FY1998 through FY2001 was a little over $4.2
billion. This annual total dropped to a little under $3.2 billion in FY2002 through
FY2004. Then the appropriation rises to about $4.1 billion for FY2005 and FY2006,
with a further increase to roughly $5.0 billion in FY2007. The drop in funding for
FY2002 through FY2004, sometimes referred to as the “SCHIP dip,” was written
into SCHIP’s authorizing legislation due to budgetary constraints applicable at the
time the legislation was drafted.
Allotment of funds among the states is determined by a formula set in law. This
formula is based on a combination of the number of low-income children and low-
income, uninsured children in the state, and includes a cost factor that represents
average health service industry wages in the state compared to the national average.
Annual allotments are basically separate, sequential funding accounts. For each
state and territory, the account for a given fiscal year is made available at the
beginning of that year, and remains available for up to three years. For example,
FY2003 allotments are available until the end of FY2005. Typically, SCHIP
payments are taken out of the earliest active account. Once that fiscal year allotment
is fully expended, and the next year’s allotment becomes available (active), states can
begin to access the next fiscal year’s allotment, and so forth.
Reallocation of unspent federal funds. At the end of the applicable
three-year period of availability, unspent allotments are subject to reallocation among
the states. The rules regarding reallocation vary by fiscal year. Generally, the year-
specific rules divide states into two groups for the purpose of reallocation: (1) those
states that fully exhaust the applicable original allotment by the three-year deadline,
called redistribution states (shown in Table 2 by fiscal year), and (2) those states that
did not exhaust the applicable original allotment by the three-year deadline, called
retention states. (Territories are treated differently; see the legislative history section
at the end of this report for more details.)
In the first reallocation legislation for FY1998 and FY1999 (P.L. 106-554),
states qualifying for redistributions (12 in FY1998 and 13 in FY1999) were given
access to unspent funds from other states equal to their excess spending above their
original allotments. The remaining unused funds were divided among the retention
states in proportion to their contribution to the total pool of unspent funds. In
contrast, the second reallocation legislation for FY2000 and FY2001 (P.L. 108-74)
allowed each state that had not spent all of its original allotment by the three-year
deadline to retain one-half of its unused funds. The remaining 50% of unspent funds
was then redistributed among those states that exceeded their original allotments (14
for FY2000 and 19 for FY2001), in proportion to their contribution to the total pool
8 From the original appropriated amounts specified in BBA 97, the law set aside 0.25% of
SCHIP funds for five territories (Puerto Rico, Guam, Virgin Islands, American Samoa, and
the Northern Mariana Islands). Later, funds were added to the total annual appropriation
and earmarked for the territories for each year beginning in FY1999. For FY1998 through
FY2002 only, $60 million annually was set aside for special diabetes grants.

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of excess spending.9 While both laws reallocated otherwise unspent funds among all
states, P.L. 106-554 favored the fast-spending states, and P.L. 108-74 favored the
slow-spending states.
The reallocation of unspent FY2002 funds was published in the January 19,
2005, issue of the Federal Register. Because no law was enacted specifying
otherwise, the reallocation process followed BBA 97 requirements. Under this law,
at the end of the applicable three-year period, unspent allotments are subject to
redistribution among only those states that fully expend their allotments by the three-
year deadline, by a method to be determined by the Secretary of Health and Human
Services. States that were projected to exhaust their available federal SCHIP
accounts in FY2005, based on their estimated FY2005 expenditures, received access
to FY2002 redistribution money equal to that estimated shortfall. The five “shortfall
states” were Arizona, Minnesota, Mississippi, New Jersey, and Rhode Island. The
remaining balance of unspent FY2002 funds was then divided among a total of 28
redistribution states, including the five shortfall states, based on each such state’s
percentage of the total excess spending above the FY2002 allotments during the
three-year period of availability of these funds.10 Also according to BBA 97, this
reallocation pot will expire at the end of one year, in this case, at the end of FY2005.
Access to reallocated funds (i.e., redistributed and retained funds from prior
years) has added another layer of complexity to SCHIP financing. During FY2005,
states can access reallocated FY2001 and FY2002 funds, plus original allotments
from FY2003, FY2004, and FY2005. Generally, when multiple accounts are
available simultaneously, expenditures are applied against reallocated and original
allotments in chronological order from earliest to most recent. However, in
regulations, CMS has allowed redistribution states only (i.e., states with excess
spending that qualified them for redistribution of unspent funds from other states) the
option of defining the order for applying expenditures against available accounts.
That is, to optimize the use of funds, such states were given the flexibility to decide
whether to use redistributed funds before or after other available funds/accounts.
Once a specific order is chosen for a given set of open accounts, such states are not
allowed to change that order (until a new account opens and is added to the set).
Other factors affecting federal financing. Like Medicaid, SCHIP is a
federal-state matching program. For each dollar of state spending, the federal
government makes a matching payment drawn from SCHIP accounts. A state’s share
9 Finally, P.L. 108-74 also permits certain states to spend their available balances from
FY1998 through FY2001 (up to a maximum of 20% of those original allotments) for
services delivered to Medicaid beneficiaries under age 19 who are not otherwise eligible for
SCHIP and have family income that exceeds 150% of the FPL. Subsequently, P.L. 108-127
modified the definition of a state that qualifies to make such expenditures. See legislative
history section for details.
10 All five territories also exceeded their FY2002 original allotments by the three-year
deadline. As with prior redistributions (see the legislative history section for more details),
1.05% of all unspent FY2002 funds was set aside for the territories. Each received an
amount equal to its original allotment for FY2002 divided by the sum of FY2002 allotments
among the territories.

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of program spending for Medicaid is equal to 100% minus the federal medical
assistance percentage (FMAP). The enhanced SCHIP FMAP is equal to a state’s
Medicaid FMAP increased by the number of percentage points that is equal to 30%
multiplied by the number of percentage points by which the FMAP is less than
100%.11 For example, in states with a Medicaid FMAP of 60%, the enhanced FMAP
equals the Medicaid FMAP increased by 12 percentage points (60% + [30%
multiplied by 40 percentage points] = 72%.) In this example, the state share is 100%
- 72% = 28%.
Compared with the Medicaid FMAP, which ranges from 50% to 76.00% in
FY2006, the enhanced FMAP for SCHIP ranges from 65% to 83.20%. All SCHIP
assistance for targeted low-income children, including coverage provided under
Medicaid, is eligible for the enhanced FMAP. The Medicaid FMAP and the
enhanced SCHIP FMAP are subject to a ceiling of 83% and 85%, respectively.
There is a limit on federal spending for SCHIP administrative expenses, which
include activities such as data collection and reporting, as well as outreach and
education. For federal matching purposes, a 10% cap applies to state administrative
expenses. This cap is tied to the dollar amount that a state draws down from its
annual allotment to cover benefits under SCHIP, as opposed to 10% of a state’s total
annual allotment.
General Program Characteristics
All 50 states, the District of Columbia, and five territories have SCHIP
programs in operation. As of January, 2005, 17 use Medicaid expansions, 18 use
separate state programs, and 21 use a combination approach. Three states received
authority under the Balanced Budget Act of 1997 to operate previously existing
comprehensive state-based plans as their separate SCHIP program. Among other
types of separate SCHIP programs, data from June, 2003, indicate that most of the
benchmark and benchmark-equivalent plans are based on the state employees’ health
plan, and most secretary-approved plans are modeled after Medicaid.
SCHIP programs across states are evolving rapidly, as evidenced by the
numerous changes states have made to their original state plans over time. As of
January, 2005, 226 amendments to original state plans had been approved and 9 more
were in review.12 Most states have multiple amendments. The content of the plan
amendments varies among states. For example, some states use amendments to
extend coverage beyond income levels defined in their original state plans. Others
define new copayment standards for program participants. Still others modify benefit
packages.
11 The federal medical assistance percentage (FMAP) and the enhanced federal medical
assistance percentage (enhanced FMAP) are calculated and published annually by the
Secretary of DHHS. FMAP is a measure of the average income per person in each state,
squared, compared to that of the nation as a whole. This formula is designed to provide a
higher FMAP to states with lower per capita income.
12 See [http://www.cms.gov/schip/chip-map.pdf].

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In addition to the amendment process, states that want to make changes to their
SCHIP programs that go beyond what the law will allow may do so through what is
called a Section 1115 waiver (named for the section of the Social Security Act that
defines the circumstances under which such waivers may be granted). The Secretary
of Health and Human Services may waive certain statutory requirements for
conducting research and demonstration projects under SCHIP that allow states to
adapt their programs to specific needs. On August 4, 2001, the Bush Administration
announced the Health Insurance Flexibility and Accountability (HIFA)
Demonstration Initiative. Using Section 1115 waiver authority, this initiative is
designed to encourage states to extend Medicaid and SCHIP to the uninsured, with
a particular emphasis on statewide approaches that maximize private health insurance
coverage options and target populations with income below 200% FPL.
As of November, 2004, 15 states had approved SCHIP Section 1115 waivers.13
Five additional Section 1115 waiver proposals (2 for new waivers and three for
amendments to existing waivers) were under review at that time. Eight states
(Arizona, California, Colorado, Idaho, Illinois, Michigan, New Jersey, and Oregon)
have approved HIFA demonstrations. In nine states with approved waivers (Arizona,
California, Colorado, Illinois, Minnesota, New Jersey, Oregon, Rhode Island, and
Wisconsin), SCHIP coverage is expanded to include one or more categories of
adults14 with children, typically parents of Medicaid/SCHIP children, caretaker
relatives, legal guardians, and/or pregnant women. Three states (Arizona, Michigan,
and Oregon) also cover childless adults under their waivers.

In addition to expanding coverage to new populations under waivers, some
states have used this authority for other purposes. For example, three states
(Michigan, Minnesota, and Rhode Island) use unspent allotments or redistributed
SCHIP funds to finance coverage of adults. Two states (Alaska and New Mexico)
require periods of no insurance prior to enrollment under their waivers.15 New
Mexico also modified its cost-sharing rules for targeted low-income children under
its Medicaid program. Three states (Idaho, Illinois, and Oregon) offer premium
assistance programs under waiver authority. New York’s demonstration provided
temporary disaster relief in New York City due to the events of September 11, 2001.
Finally, Ohio received approval to implement an annual enrollment fee and to give
13 The 15 states are Alaska, Arizona, California, Colorado, Idaho, Illinois, Michigan,
Minnesota, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, and
Wisconsin. Four of these states (Minnesota, New Jersey, New Mexico, and Rhode Island)
have had amendments to their waivers approved.
14 States have the option to purchase family coverage under a group health plan that may
cover adults as long as it is cost-effective to do so (relative to the amount paid for
comparable coverage for the children only), and it must not substitute for health insurance
that would otherwise be provided to the children. For states seeking greater flexibility both
in selecting which adults to cover and in the benefit package offered to those adults, a
waiver is required.
15 In general, for Medicaid expansions under SCHIP, all Medicaid rules apply. Thus, when
states with SCHIP Medicaid expansions want to implement other rules (e.g., establish
waiting periods before enrollment, implement enrollment fees, etc.), a waiver is required.

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12 months of continuous eligibility for certain targeted low-income children in its
Medicaid program.16
Trends in Enrollment and Expenditures
Early enrollment estimates indicated that nearly 1 million children (982,000)
were enrolled in SCHIP under 43 operational state programs as of December 1998.17
Nearly two million children (1,979,450) were enrolled in SCHIP during FY1999
under 53 operational state programs.18 The latest official numbers show that SCHIP
enrollment reached a total of nearly 5.9 million children in FY2003 (see Table 1).
Of this total, almost 4.4 million were covered in separate state programs, and 1.5
million were targeted low-income children under Medicaid. In addition, eight states
also reported enrollment of nearly 484,000 adults in FY2003. Two of these states
(New Jersey and Wisconsin) accounted for over half of adult enrollment in SCHIP.
Adult enrollment exceeded child enrollment in four states (Arizona, Minnesota, New
Jersey, and Wisconsin).
Expenditures under SCHIP have been the subject of much debate and
controversy almost since the program’s inception. Despite the fact that most states
began enrolling children in SCHIP in late 1997 or 1998 (see Table 1), new programs
always take time to get off the ground and participation rates in the early years of
SCHIP rose more slowly than expected. As a consequence, spending was slow to
ramp up too, as evidenced by the fact that a minority of states (12 to 19, depending
on the year) fully expended their original FY1998-FY2001 allotments by the
applicable three-year deadlines (see Table 2). It was not until this fiscal year —
FY2005 — when the redistribution of unspent FY2002 funds took place that more
than half of the states (28) succeeded in qualifying for a portion of these unused
funds because they spent all their own FY2002 allotments within the three-year
period of availability.
Table 3 provides a historical snapshot of SCHIP funding and expenditures for
FY1998 through FY2004. A total of $26.4 billion, over one-half of the total federal
SCHIP appropriation of nearly $40 billion to date, was made available to states and
territories during this period. By the end of FY2004, nearly 70% ($18.3 billion) of
these funds was spent. However, an additional $1.3 billion available to 11 states
actually expired at the close of FY2004; these expired funds were comprised of
unspent FY1998, FY1999, and FY2000 reallocated monies. The column displaying
net funds gained or lost through the reallocation process indicates that 33 states
forfeited funds they were unable to spend within the applicable time limits.
California (-$1.3 billion) and Texas (-$703 million) had the largest absolute losses,
16 Due to a variety of budget and resource constraints, in May 2002, Ohio decided not to
pursue implementation of its waiver.
17 U.S. Health Care Financing Administration, A Preliminary Estimate of the Children’s
Health Insurance Program Aggregate Enrollment Numbers Through Dec. 31, 1998
(background only), Apr. 20, 1999.
18 U.S. Health Care Financing Administration, The State Children’s Health Insurance
Program, Annual Enrollment Report, Oct. 1, 1998-Sept. 30, 1999 (no date).

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CRS-10
while New York ($1.7 billion)19 and Maryland ($371 million) had the largest absolute
gains.
Table 4 displays available SCHIP funds and estimated expenditures for the
current fiscal year, FY2005. During FY2005, several SCHIP accounts are active,
including:
! reallocated FY2001 and FY2002 funds and original allotments for
FY2003, all available through FY2005,
! original allotments for FY2004 available through FY2006, and
! original allotments for FY2005 available through FY2007.
A total of 28 states received additional funds through the reallocation of unspent
FY2002 funds. Among the 23 states that forfeited funds, California (-$122 million)
and Texas (-$105 million) had the largest absolute losses. New Jersey ($172 million)
and Arizona ($76 million), two of the five “shortfall” states receiving reallocated
FY2002 funds (described above), had the largest absolute gains. Due at least in part
to the reallocation of unspent FY2002 funds, during FY2005, no state is expected to
have insufficient federal funds to cover estimated spending. Of the $10.9 billion
available this fiscal year, states estimate they will spend about $5.3 billion during
FY2005.
Forthcoming SCHIP Issues
As with previous Congresses, the main SCHIP policy issue facing the 109th
Congress will be federal financing — specifically, identifying the best method for
distributing unspent federal funds among states. In the early years of SCHIP, the
majority of states had not used available SCHIP allotments within applicable time
frames, and these unspent funds were on the verge of expiring (to be returned to the
Treasury). These states wanted continued access to their unspent funds, perhaps to
support program expansions, but the law established in the Balanced Budget Act of
1997 (BBA 97) required that such funds be redistributed among only those states that
fully exhausted their own allotments (12 to 19 states, depending on the fiscal year).
In response, Congress passed reallocation legislation that tried to strike a balance
between rewarding fast-spending states with additional funds, while giving slow-
spending states continued access to a portion of their unused funds.
Despite much discussion about SCHIP financing during the closing days of the
108th Congress, at the end of FY2004, nearly $1.3 billion in unspent reallocated
SCHIP funds from FY1998 through FY2000 expired. At this point in time, the BBA
97 rule applies to the redistribution of unspent SCHIP funds for FY2002 forward.
Recently, the Administration reallocated roughly $643 million in unspent FY2002
funds among 28 states that had exhausted their own FY2002 allotments, five of
which had projected shortfalls in FY2005.
19 Notice however, that even though New York gained access to a lot of additional federal
dollars through reallocations during this period, $877 million in SCHIP funds for this state
still expired at the end of FY2004.

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CRS-11
The 109th Congress will face a shrinking pool of unspent funds to be reallocated
among the states. With each passing year, more states have been able to spend their
full allotments, leaving less and less funds to meet growing state financing needs.
States’ projected need for federal SCHIP funds for FY2005 through FY2007 points
to a potential shortfall — that is, some states could exhaust all of their available
federal allotments and reallocated funds after FY2005.20 In response, states may
choose to cut back their programs either through reducing the number of
beneficiaries, limiting benefits, lowering provider reimbursement rates, etc.
However, it is important to note that when SCHIP was created under BBA 97,
Congress intended for this program to be a capped federal grant to states, not an
individual, open-ended entitlement; and SCHIP remains so today.
In addition, although the program is currently authorized through FY2007, both
the Administration and Congress have indicated interest in reauthorizing SCHIP as
early as this year. Such reauthorization may further define the core populations to be
served under SCHIP (i.e., children versus parents/caretaker relatives versus other
adults) which may be incorporated in new criteria for distributing federal funds
among states into the future.
SCHIP Legislative History
Below is a summary of major SCHIP changes enacted in public laws beginning with
the legislation authorizing the program in 1997:
Balanced Budget Act of 1997 (BBA 97), P.L. 105-33:
1. Creation of SCHIP. — Under BBA 97, the State Children’s Health Insurance
Program was established, effective August 5, 1997. A number of provisions
specified eligibility criteria; coverage requirements for health insurance; federal
allotments and the state allocation formula; payments to states and the enhanced
FMAP formula; the process for submission, approval and amendment of state SCHIP
plans; strategic objectives and performance goals, and plan administration; annual
reports and evaluations; options for expanding coverage of children under Medicaid;
and diabetes grant programs.
District of Columbia Appropriations Act of 1998, P.L. 105-100:
1. Increased appropriation. — This law increased the FY1998 SCHIP appropriation
from $4.275 billion to $4.295 billion.
20 CRS has developed a model for projecting states’ need for federal SCHIP funds for
FY2005 through FY2007 based on current law assumptions. Results from this analysis are
discussed in CRS Report RL32807, SCHIP Financing: Funding Projections and State
Redistribution Issues, by Chris Peterson.

---

CRS-12
Omnibus Consolidated and Emergency Supplemental Appropriation Act, FY1999,
P.L. 105-277:
1. Increased appropriation for territories. — For FY1999, an additional
appropriation of $32 million for the territories was provided, bringing the FY1999
total appropriation to $4.307 billion.
2. Change in allotment formula affecting some Native American children. — For
FY1998 and FY1999, the law changed the annual state allotment formula by
stipulating that children with access to health care funded by the Indian Health
Service and no other health insurance would be counted as uninsured (rather than as
insured as required under the previously existing law).
The Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999
(BBRA 99), incorporated by reference in the Consolidated Appropriations Act for
Fiscal Year 2000, P.L. 106-113:
1. Stabilizing the SCHIP allotment formula. — Annual federal allotments to each
state are determined in part by states’ success in covering previously uninsured low-
income children under SCHIP. Under prior law, the more successful a state was in
enrolling children in SCHIP, especially early in the program, the greater the potential
reduction in subsequent annual allotments. To limit the amount a state’s allocation
can fluctuate from one year to the next, BBRA 99 modified the allotment distribution
formula and established new floors and ceilings.
2. Targeted, increased allotments. — Additional allotments for the commonwealths
and territories were provided for fiscal years 2000 through 2007.
3. Improved data collection. — The law provided new funding for the collection of
data to produce reliable, annual state-level estimates of the number of uninsured
children. These data changes will improve research and evaluation efforts. They will
also affect state-specific counts of the number of low-income children and the
number of such children who are uninsured that feed into the formula that determines
annual state-specific allotments from federal SCHIP appropriations.
4. Federal evaluation. — New funding was also provided for a federal evaluation21
to identify effective outreach and enrollment practices for both SCHIP and Medicaid,
barriers to enrollment, and factors influencing beneficiary drop-out.
5. Additional reports and a clearinghouse. — The law also required: (a) an inspector
general audit22 and GAO report on enrollment of Medicaid-eligible children in
21 Implementation of the State Children’s Health Insurance Program: Momentum is
Increasing After a Modest Start, First Annual Report, Cambridge, MA: Mathematica Policy
Research, Inc., Jan. 2001. For additional reports describing results from other components
of the national evaluation of SCHIP, go to [http://aspe.os.dhhs.gov/health/schip/
background.htm].
22 The OIG has issued two audit reports: Department of Health and Human Services, Office
(continued...)

---

CRS-13
SCHIP,23 (b) states to report annually the number of deliveries to pregnant women
and the number of infants who receive services under the Maternal and Child Health
Services Block Grant or who are entitled to SCHIP benefits, and (c) the Secretary of
Health and Human Services to establish a clearinghouse for the consolidation and
coordination of all federal databases and reports regarding children’s health.
Agriculture Risk Protection Act of 2000, P.L. 106-224:
1. Information sharing. This law allows schools operating federally subsidized
school meal programs to take a more active role in identifying children eligible for,
and enrolling such children in, the Medicaid and SCHIP programs. It permits schools
to share income and other relevant information collected when determining eligibility
for free and reduced-price school meals with state Medicaid and SCHIP agencies, as
long as there is a written agreement that limits use of the information and parents are
notified and given a chance to “opt out.”
2. Demonstration project. The law also establishes a demonstration project in one
state in which administrative funds under the Special Supplemental Nutrition
Program for Women, Infants and Children (WIC) may be used to help identify
children eligible for, and enroll such children in, the Medicaid and SCHIP programs.
Children’s Health Act of 2000, P.L. 106-310:
1. Rights of institutionalized children. — The law requires that general hospitals,
nursing facilities, intermediate care facility and other health care facilities receiving
federal funds, including SCHIP, protect the rights of each resident, including the right
to be free from physical or mental abuse, corporal punishment, and any restraints or
involuntary seclusions imposed for the purposes of discipline or convenience.
Restraints and seclusion may be imposed in such facilities only to ensure the physical
safety of the resident, a staff member or others. Additional requirements govern
reporting of resident deaths, promulgation of regulations regarding staff training, and
enforcement.
2. Children’s rights in community-based settings. — The law also includes
requirements for protecting the rights of residents of certain non-medical,
community-based facilities for children and adolescents, when that facility receives
funding under this Act or under Medicaid. (Existing regulations do not clarify if and
how these rights apply to such facilities funded by SCHIP.) For such individuals and
facilities, restraints and seclusion may only be imposed in emergency circumstances
and only to ensure the physical safety of the resident, a staff member or others, and
less restrictive interventions have been determined to be ineffective. Additional
22 (...continued)
of Inspector General, State Children’s Health Insurance Program: Assessment of State
Evaluations Reports, OEI-05-00-00240, Feb. 2001, and Department of Health and Human
Services, Office of Inspector General, State Children’s Health Insurance Program:
Ensuring Medicaid Eligibles are not Enrolled in SCHIP, OEI-05-00-00241, Feb. 2001.
23 U.S. General Accounting Office, Children’s Health Insurance: Inspector General
Reviews Should Be Expanded to Further Inform the Congress, GAO-02-512, Mar. 2002.

---

CRS-14
requirements govern reporting of resident deaths, promulgation of regulations
regarding staff training, and enforcement.
Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000
(BIPA), incorporated by reference into the Consolidated Appropriations Act 2001,
P.L. 106-554:
1. Special redistribution rules for unspent FY1998 and FY1999 allotments. — For
each of these years separately, a pool of unspent funds is created from the unused
allotment amounts of those states that did not fully expend their original allotments
within the applicable three-year time frame. From this pool, 1.05% is set aside for
the territories that fully exhaust their original allotments. Each such territory receives
a percentage of the available 1.05% pool equal to that territory’s original allotment
divided by the sum of original allotments for such territories. Then the states that did
fully expend their original allotments within the three-year deadline receive access
to redistributed funds from the remaining pool equal to the amount by which their
three-year spending exceeds their original allotments.24 The remaining states that did
not use all their original allotments for the year retain access to a portion of the
remaining funds in the pool, equal to the ratio of such a state’s unspent original
allotment to the total amount of unspent funds for that fiscal year. These latter states
are permitted to use up to 10% of their retained FY1998 funds for outreach activities.
This allowance is over and above spending for such activities under the general
administrative cap described above. The deadline for spending all redistributed and
retained funds from FY1998 and FY1999 is September 30, 2002, although this date
was extended by P.L. 108-74 as described below. (See the text for additional
information on redistribution of unspent SCHIP funds.)
2. Presumptive eligibility. — Under Medicaid presumptive eligibility rules, states
are allowed to temporarily enroll children whose family income appears to be below
Medicaid income standards, until a final formal determination of eligibility is made.
BIPA clarified states’ authority to conduct presumptive eligibility determinations, as
defined in Medicaid law, under separate (non-Medicaid) SCHIP programs.
3. Authority to pay SCHIP Medicaid expansion costs from Title XXI appropriation.
Under prior law, states’ allotments under SCHIP paid only the federal share of costs
associated with separate (non-Medicaid) SCHIP programs. The federal share of costs
associated with covering targeted low-income children under Medicaid was paid for
by Medicaid. State SCHIP allotments were reduced by the amounts paid by
Medicaid for such costs. BIPA authorized the payment of the costs of targeted low-
income children under Medicaid, and the costs of benefits provided during periods
of presumptive eligibility, from the SCHIP appropriation rather than the Medicaid
appropriation, and as a conforming amendment, eliminated the requirement that state
SCHIP allotments be reduced by these (former) Medicaid payments. Also, for
FY1998-FY2000 only, BIPA authorized the transfer of unexpended SCHIP
appropriations to the Medicaid appropriation account for the purpose of reimbursing
payments made on behalf of targeted low-income children under Medicaid.
24 For example, if a state’s FY1998 allotment was $10 million, and the state’s FY1998,
FY1999 and FY2000 spending totaled $12 million, the state would receive access to a
redistribution of $2 million.

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CRS-15
Public Health Security and Bioterrorism Preparedness and Response Act of 2002,
P.L. 107-188:
1. Waiver of provider requirements and Medicare+Choice payment limits. The law
authorizes the Secretary to temporarily waive conditions of participation and other
certification requirements for any entity that furnishes health care items or services
to Medicare, Medicaid, or SCHIP beneficiaries in an emergency area during a
declared disaster or public health emergency. During such an emergency, the
Secretary may waive: (a) participation, state licensing (as long as an equivalent
license from another state is held and there is no exclusion from practicing in that
state or any state in the emergency area), and pre-approval requirements for
physicians and other practitioners; (b) sanctions for failing to meet requirements for
emergency transfers between hospitals; (c) sanctions for physician self-referral; and
(d) limitations on payments for health care and services furnished to individuals
enrolled in Medicare+Choice (M+C) plans when services are provided outside the
plan. To the extent possible, the Secretary must ensure that M+C enrollees do not
pay more than would have been required had they received care within their plan
network.
2. Notification to Congress. The law also requires the Secretary to provide Congress
with certification and written notice at least two days prior to exercising this waiver
authority. It also provides for this waiver authority to continue for 60 days, and
permits the Secretary to extend the waiver period.
3. Evaluation. The Secretary is further required, within one year after the end of the
emergency, to provide Congress with an evaluation of this approach and
recommendations for improvements under this waiver authority.
Health Care Safety Net Amendments of 2002, P.L. 107-251:
1. Study of migrant farm workers. This law requires the Secretary to conduct a study
of the problems experienced by farm workers and their families under Medicaid and
SCHIP, specifically, barriers to enrollment, and lack of portability of Medicaid and
SCHIP coverage for farm workers eligible in one state who move to other states on
a periodic basis. The Secretary must also identify possible strategies to increase
enrollment and access to benefits for these families. Strategies to be examined must
include: (a) use of interstate compacts to establish portability and reciprocity, (b)
multi-state demonstration projects, (c) use of current law flexibility for coverage of
residents and out-of-state coverage, (d) development of programs of national migrant
family coverage, (e) use of incentives to private coverage alternatives, and (f) other
solutions as deemed appropriate. In conducting the study, the Secretary must consult
with several groups. The Secretary must submit a report on this study to the
President and Congress in October, 2003. This report shall address findings and
conclusions and provide recommendations for appropriate legislative and
administrative action.
State Children’s Health Insurance Program Allotments Extension Act, P.L. 108-74:
1. Extension of available SCHIP reallocated funds from FY1998 and FY1999. —
This law extends the availability of FY1998 and FY1999 reallocated funds through
the end of FY2004 (rather than the end of FY2002).

---

CRS-16

2. Revision of methods for reallocation of unspent FY2000 and FY2001, and
extension of the availability of such funds. — The law also establishes a new method
for reallocating unspent funds from FY2000 and FY2001 allotments. For each year
separately, each state that does not spend its full original allotment by the three-year
deadline retains 50% of its unspent funds. The remaining 50% from each such state
forms a pool of unspent funds for redistribution among the territories and other states
that do fully expend (and exceed) their allotments by the three-year deadline. First,
1.05% of the redistribution pool is set aside for allocation among the territories that
fully exhaust their original allotments, from which each such territory receives an
amount equal to its original allotment divided by the sum of original allotments for
such territories. Then the remaining redistribution pool is allocated to each state that
fully expends (exceeds) its original allotment by the three-year deadline. The
redistribution amount for each such state is based on the proportion of its excess
spending relative to the total amount of excess spending for all such states.
Reallocated funds for FY2000 and FY2001 are available until the end of FY2004 and
FY2005, respectively.
3. Authority for qualifying states to use certain funds for Medicaid expenditures. -
For specific expenditures occurring after August 15, 2003, the law permits certain
states to apply federal SCHIP funds toward the coverage of certain children enrolled
in regular Medicaid (not a SCHIP Medicaid expansion). Specifically, qualifying
states may spend their available balances from FY1998 through FY2001 (up to a
maximum of 20% of those original allotments) for services delivered to Medicaid
beneficiaries under age 19 who are not otherwise eligible for SCHIP and have family
income that exceeds 150% of the FPL. For such services, these federal SCHIP funds
can be used to pay the difference between the SCHIP enhanced federal matching rate
and the regular Medicaid federal matching rate the state receives for these children.
Qualifying states include those that on or after April 15, 1997 had an income
eligibility standard of at least 185% of the FPL for at least one category of children,
other than infants. (Other qualifications apply to states with statewide waivers under
Section 1115 of the Social Security Act.) Under this law, the qualifying states
included Connecticut, Minnesota, New Hampshire, Tennessee, Vermont,
Washington, and Wisconsin. (See below for changes to this section of this law.)
Technical Corrections with Respect to the Definition of Qualifying State, P.L. 108-
127:
1. Change in the income standard and applicable dates. This law modified P.L.
108-74 by changing the income eligibility standard affecting some qualifying states
from 185% to 184% of the FPL. It also modified applicable dates with respect to
certain states with Section 1115 waivers that covered children in families with
income of at least 185% of the FPL. The effect of these changes was to add four
states (i.e., Hawaii, Maryland, New Mexico, and Rhode Island) to the set of
qualifying states, thus allowing them to also use certain funds for Medicaid
expenditures (see above description for P.L. 108-74).

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CRS-17
Table 1. SCHIP Enrollment Data for the 50 States and the District
of Columbia for FY2003
SCHIP
FY2003 enrollment (number of
Adults
upper
children ever enrolled during year)
ever
income
enrolled in SCHIP
Date
eligibility
Separate
demonstrations
enrollment standard
Medicaid child health
during
State
began
(% FPL)
expansion
program
Total
(FY2003)
Alabama (S)
2/1/98
200%
78,554
78,554
Alaska (M)
3/1/99
200%
22,934
22,934
Arizona (S)
11/1/98
200%
90,491
90,468
98,431
Arkansas a (M)
10/1/98
200%
California (C)
3/1/98
250%
99,366
855,786
955,152
Colorado (S)
4/22/98
185%
74,144
74,144
1,423
Connecticut (S)
7/1/98
300%
20,971
20,971
Delaware (C)
2/1/99
200%
159
9,744
9,903
District of Columbia
(M)
10/1/98
200%
5,875
5,875
Florida (C)
4/1/98
200%
2,188
440,989
443,177
Georgia (S)
11/1/98
235%
251,711
251,711
Hawaii (M)
7/1/00
200%
12,022
12,022
Idaho (M)
10/1/97
150%
16,877
16,877
Illinois (C)
1/5/98
185%
81,692
53,917
135,609
70,773
Indiana (C)
10/1/97
200%
51,587
22,175
73,762
Iowa (C)
7/1/98
200%
14,001
23,059
37,060
Kansas (S)
1/1/99
200%
45,662
45,662
Kentucky (C)
7/1/98
200%
57,553
34,275
94,053
Louisiana (M)
11/1/98
200%
104,908
104,908
Maine (C)
7/1/98
200%
19,280
10,194
29,474
Maryland (C)
7/1/98
300%
122,229
7,932
130,161
Massachusetts (C)
10/1/97
200%
85,104
43,686
128,790
Michigan (C)
5/1/98
200%
26,391
51,076
77,467
Minnesota (C)
10/1/98
280%
48
NR
48
41,317
Mississippi (S)
7/1/98
200%
75,010
75,010
Missouri (M)
9/1/98
300%
150,954
150,954
Montana (S)
1/1/99
150%
13,084
13,084
Nebraska (M)
5/1/98
185%
45,490
45,490
Nevada (S)
10/1/98
200%
47,183
47,183
New Hampshire (C)
5/1/98
300%
517
9,376
9,893
New Jersey (C)
3/1/98
350%
40,414
78,858
119,272
123,716
New Mexico (M)
3/31/99
235%
18,841
18,841
New York (C)
4/15/98
250%
NR
795,111
795,111
North Carolina (S)
10/1/98
200%
150,444
150,444
North Dakota (C)
10/1/98
140%
1,773
3,180
4,953
Ohio (M)
1/1/98
200%
207,854
207,854
Oklahoma (M)
12/1/97
185%
91,914
91,914
Oregon (S)
7/1/98
185%
44,752
44,752
2,129
Pennsylvania (S)
5/28/98
200%
160,015
160,015

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CRS-18
SCHIP
FY2003 enrollment (number of
Adults
upper
children ever enrolled during year)
ever
income
enrolled in SCHIP
Date
eligibility
Separate
demonstrations
enrollment standard
Medicaid child health
during
State
began
(% FPL)
expansion
program
Total
(FY2003)
Rhode Island (C)
10/1/97
250%
22,893
1,612
24,505
22,044
South Carolina (M)
10/1/97
150%
90,764
90,764
South Dakota (C)
7/1/98
200%
9,529
2,759
12,288
Tennesseeb (M)
10/1/97
Texas (S)
7/1/98
200%
726,428
726,428
Utah (S)
8/3/98
200%
37,766
37,766
Vermont (S)
10/1/98
300%
6,467
6,467
Virginia (C)
10/22/98
200%
30,616
53,100
83,716
Washington (S)
2/1/00
250%
9,571
9,571
West Virginia (S)
7/1/98
200%
35,320
35,320
Wisconsin (M)
4/1/99
185%
68,641
68,641
123,895
Wyoming (S)
12/1/99
185%
5,241
5,241
Total
—
—
1,503,775
4,370,484
5,874,259
483,728
Source: Data on date enrollment began is from the Centers for Medicare and Medicaid Services, The
State Children’s Health Insurance Program, Annual Enrollment Report Federal Fiscal Year 2001:
October 1, 2000 — September 30, 2001, Feb. 6, 2002. The SCHIP upper income eligibility standards
are taken from the CRS Report RL32389,: A State-by-State Compilation of Key State Children’s Health
Insurance Program (SCHIP) Characteristics, by Elicia J. Herz, Evelyne Baumrucker, and Peter Kraut.
The state-reported SCHIP enrollment figures are taken from Centers for Medicare and Medicaid
Services, Revised FY2003 Number of Children Ever Enrolled in SCHIP by Program Type, Aug. 5,
2004. For states with combination programs, the “total” column shows the sum of the unduplicated
number of children ever enrolled in the SCHIP Medicaid expansion program during the year and the
unduplicated number of children ever enrolled in the separate SCHIP program during the year. Because
a child may be enrolled in both programs during the year, there may be some double counting of
children enrolled in these states. SCHIP enrollment figures for the territories are not available.
Notes: S — Separate child health programs; M — Medicaid expansion programs; C — Combination
programs. NR — Indicates that state has not reported data via the SCHIP Statistical Enrollment Data
System (SEDS). FPL = poverty level.
a. Arkansas did not report SCHIP enrollment data in the SEDS database for FY2003. Under its
comprehensive Medicaid Section 1115 waiver, this state uses a combination of Medicaid and SCHIP
funds to cover uninsured children through age 18 in families with income up to 200% FPL. Waiver
documents indicate that 57,011 children were enrolled in this demonstration as of the fall of 2003.
b. Tennessee used SCHIP funds to expand its existing comprehensive Medicaid Section 1115 waiver
program. Under the state’s SCHIP Medicaid expansion, Tennessee began enrolling children in October
of 1997 through FY2002. In that year, enrollment reached 10,216. Eligibility for this Medicaid
expansion program was limited to older children in families with income up to 100% FPL. As of
October 1, 2002, all such children had to be covered under regular Medicaid, that is, they were no
longer eligible for SCHIP coverage. Thus, Tennessee has no SCHIP enrollment subsequent to FY2002.

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CRS-19
Table 2. Redistribution States for FY1998 through FY2002
Received
Received
Received
Received
Received
redistribution redistribution redistribution redistribution
redistribution
of FY1998
of FY1999
of FY2000
of FY2001
of FY2002
funds starting funds starting funds starting funds starting
funds starting
State
in FY2001
in FY2002
in FY2003
in FY2004
in FY2005
Alabama
Yes
Alaska
Yes
Yes
Yes
Yes
Yes
Arizona
Yes
Yes
Florida
Yes
Yes
Georgia
Yes
Yes
Illinois
Yes
Indiana
Yes
Yes
Iowa
Yes
Kansas
Yes
Yes
Yes
Kentucky
Yes
Yes
Yes
Yes
Yes
Louisiana
Yes
Maine
Yes
Yes
Yes
Yes
Yes
Maryland
Yes
Yes
Yes
Yes
Yes
Massachusetts
Yes
Yes
Yes
Yes
Yes
Michigan
Yes
Minnesota
Yes
Yes
Yes
Mississippi
Yes
Yes
Yes
Missouri
Yes
Yes
Yes
Montana
Yes
Nebraska
Yes
Yes
New Jersey
Yes
Yes
Yes
Yes
New York
Yes
Yes
Yes
Yes
Yes
North Carolina
Yes
Yes
Yes
Yes
Ohio
Yes
Pennsylvania
Yes
Yes
Rhode Island
Yes
Yes
Yes
Yes
Yes
South Carolina
Yes
Yes
Yes
South Dakota
Yes
Yes
West Virginia
Yes
Yes
Yes
Wisconsin
Yes
Yes
Yes
Yes
Total
12
13
14
19
28
Source: Congressional Research Service (CRS) analysis of data from the Centers for Medicare and
Medicaid Services.
Note: All reallocated (redistributed and retained) funds for FY1998, FY1999, and FY2000 were
available through FY2004. All reallocated funds for FY2001 and FY2002 are available through
FY2005.

---

CRS-20
Table 3. Status of FY1998-2004 Federal SCHIP Funds,
by State and Territory
(thousands of dollars)
States
FY1998-FY2004
Net funds gained
Federal
Amount of expired
original
(forfeited) through
SCHIP
FY1998-FY2000
SCHIP
reallocation of unspent
expenditures
reallocated SCHIP
allotments
FY1998-FY2001
through the end
funds at the end of
original allotments a
of FY2004
FY2004
Alabama
$473,105
($81,551)
$298,094
$0
Alaska
$52,019
$94,180 $109,878
$8,627
Arizona
$749,675
($70,665)
$658,559
$0
Arkansas
$308,821
($97,734)
$67,424
$11,165
California
$4,786,977
($1,332,476)
$2,249,238
$0
Colorado
$291,970
($48,933)
$154,293
$0
Connecticut
$226,707
($56,868)
$88,974
$0
Delaware
$60,635
($16,467)
$17,070
$0
DC
$68,914
($18,334)
$30,247
$0
Florida
$1,531,179
$12,960 $1,182,485
$0
Georgia
$822,022
($59,523)
$633,782
$0
Hawaii
$68,314
($19,043)
$25,110
$0
Idaho
$120,771
($12,297)
$66,689
$0
Illinois
$922,141
($243,940)
$498,035
$0
Indiana
$418,644
$113,613 $362,919
$0
Iowa
$193,574
($15,163)
$150,062
$0
Kansas
$190,791
$26,403 $158,587
$0
Kentucky
$327,302
$229,942 $358,602
$87,628
Louisiana
$559,647
($137,644)
$313,239
$0
Maine
$81,495
$46,637 $95,258
$5,005
Maryland
$334,953
$371,039 $562,489
$8,084
Massachusetts
$327,135
$204,693 $380,449
$31,268
Michigan
$686,702
($161,896)
$349,099
$0
Minnesota
$216,856
$10,679 $202,371
$0
Mississippi
$338,281
$50,695 $338,474
$0
Missouri
$357,808
$31,552 $327,198
$0
Montana
$84,221
($6,817)
$57,204
$0
Nebraska
$108,765
($4,949)
$91,334
$0
Nevada
$211,755
($42,391)
$90,909
$0
New Hampshire
$71,068
($20,880)
$21,035
$0
New Jersey
$575,314
$386,364 $935,911
$0
New Mexico
$331,895
($110,798)
$65,688
$30,953
New York
$1,796,859
$1,743,159 $2,054,933
$877,081

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CRS-21
States
FY1998-FY2004
Net funds gained
Federal
Amount of expired
original
(forfeited) through
SCHIP
FY1998-FY2000
SCHIP
reallocation of unspent
expenditures
reallocated SCHIP
allotments
FY1998-FY2001
through the end
funds at the end of
original allotments a
of FY2004
FY2004
North Carolina
$600,203
$147,792 $554,263
$0
North Dakota
$38,495
($7,348)
$20,123
$0
Ohio
$829,537
($32,850)
$632,404
$0
Oklahoma
$451,673
($132,534)
$191,776
$0
Oregon
$288,451
($74,360)
$96,329
$0
Pennsylvania
$803,481
($47,344)
$564,630
$0
Rhode Island
$62,362
$67,253 $129,419
$0
South Carolina
$396,782
$150,368 $301,787
$152,209
South Dakota
$51,054
($2,325)
$38,533
$0
Tennessee
$470,793
($127,157)
$64,604
$57,607
Texas
$3,019,551
($703,429)
$1,569,127
$0
Utah
$177,554
($10,647)
$117,364
$0
Vermont
$27,000
($4,353)
$13,178
$0
Virginia
$449,194
($114,211)
$206,417
$0
Washington
$349,426
($99,895)
$69,545
$11,467
West Virginia
$143,354
$20,772 $117,643
$0
Wisconsin
$302,968
$128,194 $350,925
$0
Wyoming
$45,379
($13,951)
$16,243
$0
Puerto Rico
$222,061
$84,711 $259,925
$0
Guam
$8,485
$3,237 $11,636
$0
Virgin Islands
$6,303
$2,404 $7,233
$0
American Samoa
$2,909
$1,110 $5,573
$0
N. Mariana Islands
$2,667
$1,017 $6,920
$0
Total
$26,446,000
$0
$18,341,238
$1,281,092
Source: Congressional Research Service (CRS) analysis of data from the Centers for Medicare and Medicaid Services.
Note: Data in these columns are not additive. For example, reallocated FY2001 funds and original allotments for
FY2003 and FY2004 remain available for states to draw from beyond FY2004, while other accounts have closed or
expired.
a These reallocations were first active in FY2001 through FY2004, respectively.

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CRS-22
Table 4. Status of FY2005 Federal SCHIP Funds, by State and Territory
(thousands of dollars)
Net funds
gained
Available
(forfeited)
balance from
through
reallocated
reallocation of
FY2001 funds
Original
unspent
and original
FY2005
FY2002
FY2003 and
Total amount
SCHIP
original
FY2004
available in
States’ spending
State
allotments
allotments a
allotments b
FY2005 c
estimate
Alabama
$68,041
$8,998 $93,460 $170,499
$71,688
Alaska
$9,020
$3,433 $27,693 $40,147
$18,020
Arizona
$106,473
$76,359 $20,452 $203,285
$174,286
Arkansas
$48,662
($36,292)
$96,206 $144,868
$29,414
California
$667,444
($122,465)
$1,082,799 $1,750,242
$793,733
Colorado
$57,951
($5,964)
$82,780 $140,731
$44,707
Connecticut
$36,561
($25,994)
$54,871 $91,432
$19,872
Delaware
$9,046
($8,520)
$18,577 $27,623
$5,663
DC
$9,635
($5,932)
$14,401 $24,036
$7,694
Florida
$249,247
$38,257 $361,654 $649,158
$391,991
Georgia
$130,915
$23,642 $128,716 $283,273
$191,945
Hawaii
$12,405
($4,865)
$19,296 $31,700
$10,927
Idaho
$20,748
($8,032)
$33,753 $54,501
$17,429
Illinois
$164,936
$16,630 $180,166 $361,732
$238,955
Indiana
$73,422
($47,030)
$122,307 $195,729
$73,308
Iowa
$28,266
$4,571 $28,348 $61,185
$45,666
Kansas
$28,479
$5,406 $58,607 $92,492
$42,797
Kentucky
$54,061
$10,410 $111,014 $175,486
$78,498
Louisiana
$77,478
$10,770 $108,764 $197,012
$113,156
Maine
$12,462
$3,234 $27,870 $43,566
$23,091
Maryland
$48,349
$19,688 $135,419 $203,456
$117,677
Massachusetts
$59,401
$12,272 $120,110 $191,784
$89,475
Michigan
$111,346
$9,741 $175,706 $296,792
$169,252
Minnesota
$38,615
$27,925 $25,164 $91,704
$81,446
Mississippi
$48,166
$35,539 $50,502 $134,207
$120,915
Missouri
$53,958
$10,045 $62,163 $126,166
$93,386
Montana
$12,284
$1,645 $20,199 $34,129
$16,148
Nebraska
$17,096
$3,457 $12,482 $33,036
$28,354
Nevada
$40,387
($16,855)
$61,600 $101,988
$27,629
New Hampshire
$9,273
($9,092)
$20,061 $29,334
$7,645
New Jersey
$84,735
$171,681 $25,768 $282,183
$242,284

---

CRS-23
Net funds
gained
Available
(forfeited)
balance from
through
reallocated
reallocation of
FY2001 funds
Original
unspent
and original
FY2005
FY2002
FY2003 and
Total amount
SCHIP
original
FY2004
available in
States’ spending
State
allotments
allotments a
allotments b
FY2005 c
estimate
New Mexico
$42,157
($33,495)
$90,961 $133,117
$75,701
New York
$270,142
$47,020 $608,004 $925,166
$511,888
North Carolina
$110,255
$18,042 $193,732 $322,029
$201,153
North Dakota
$6,385
($151)
$10,873 $17,258
$8,555
Ohio
$125,842
$19,518 $164,284 $309,644
$171,774
Oklahoma
$57,371
($38,119)
$89,244 $146,614
$46,985
Oregon
$47,255
($37,597)
$80,165 $127,421
$20,621
Pennsylvania
$130,964
$14,902 $191,507 $337,373
$144,137
Rhode Island
$9,355
$23,364 $224
$32,942
$27,509
South Carolina
$54,306
($6,398)
$86,757 $141,063
$64,520
South Dakota
$7,887
$1,357 $10,196 $19,440
$14,826
Tennessee
$78,905
($61,964)
$159,461 $238,365
$17,259
Texas
$449,972
($104,639)
$642,356 $1,092,328
$316,101
Utah
$31,699
($759)
$48,785 $80,484
$30,893
Vermont
$4,903
($1,842)
$7,626 $12,529
$2,858
Virginia
$76,255
($19,414)
$109,153 $185,407
$83,206
Washington
$64,705
($42,446)
$126,073 $190,778
$34,680
West Virginia
$24,423
$4,066 $46,483 $74,972
$32,740
Wisconsin
$51,870
$13,896 $80,237 $146,004
$102,653
Wyoming
$6,365
($4,753)
$10,433 $16,797
$5,746
Puerto Rico
$38,953
$6,181 $46,847 $91,981
$38,952
Guam
$1,488
$236 $85
$1,810
$1,488
Virgin Islands
$1,106
$175 $1,474 $2,755
$1,106
American Samoa
$510
$81 $0
$591
$510
N. Mariana Islands
$468
$74 $0
$542
$468
National total
$4,082,400
$0
$6,185,871
$10,910,888
$5,343,380
Source: Congressional Research Service (CRS) analysis of data from the Centers for Medicare and Medicaid Services.
a. Reallocated FY2002 funds are active only during FY2005.
b. Reallocated FY2001 funds and original FY2003 allotments are available through FY2005, while original FY2004
allotments are available through FY2006.
c. This column shows the sum of only the positive numbers in the previous three columns. In the second column, the
negative numbers in parentheses refer to amounts unspent and forfeited at the end of FY2004, and thus, were no longer
available to these states at the beginning of FY2005. For states with negative values in the second column, this column
is equal to the sum of the first and third columns.

---