The State Children's Health Insurance Program: Eligibility, Enrollment, and Program Funding

The State Children's Health Insurance Program: Eligibility, Enrollment, and Program Funding

Order Code RL30642
CRS Report for Congress
Received through the CRS Web
The State Children’s Health Insurance Program:
Eligibility, Enrollment, and Program Funding
Updated March 21, 2001
Evelyne P. Baumrucker
Analyst in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

The State Children’s Health Insurance Program:
Eligibility, Enrollment, and Program Funding
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. SCHIP represents the largest publicly funded effort to provide health
insurance to children since the enactment of Medicaid in 1965. The program offers
federal matching funds for states and territories to provide health insurance coverage
to uninsured, low-income children from families whose annual incomes are higher
than Medicaid eligibility thresholds. States may choose from three options when
designing their SCHIP programs; they may (1) expand their current Medicaid
program, (2) create a new, separate state insurance program, or (3) devise a
combination of both approaches. A majority of states are expanding eligibility for
SCHIP to levels between 150% and 200% of the federal poverty level (FPL). In one
state, New Jersey, the upper income eligibility limit for Medicaid expansions and
separate state programs under SCHIP has reached 350% of the federal poverty level.
Until recently, the 106th Congress and the Clinton Administration expressed
disappointment with implementation progress under SCHIP, citing low enrollment
rates early in the program. By FY2000, the pace of enrollment under SCHIP had
improved. The Health Care Financing Administration (HCFA) reported that nearly1
million children (982,000) were enrolled in SCHIP in FY1998 under 43 operational
state programs. In FY1999, enrollment increased to nearly 2 million children
(1,979,450) under 53 operational programs. On January 5, 2001, the Clinton
Administration announced that enrollment in the SCHIP program reached
approximately 3.3 million children by the end of FY2000. Subsequent to the
enactment of BBA 97, CBO estimated that SCHIP would cover an average of 2.3
million children per year after 1999. The Clinton Administration’s goal was to enroll
5 million children in SCHIP by FY2002.
In the original enacting statute, Congress provided appropriations of nearly $40
billion for the FY1998 to FY2007 period. Federal funds are allotted among the states
based on a formula that takes into account the combination of the number of low-
income children and the number of low-income, uninsured children residing in a state,
as well as a state cost factor. A total of $4.295 billion in federal funds was available
to states and territories for FY1998 and $4.307 billion was available in FY1999. Each
of FY2000 and FY2001, federal funding levels total $4.309 billion.
Like Medicaid, SCHIP is a federal-state matching program. In order to
determine a state’s matching payments, SCHIP uses Medicaid’s concept of “federal
medical assistance percentage,” but modifies it to provide states an “enhanced federal
medical assistance percentage” (enhanced FMAP). A state’s share of total SCHIP
spending is equal to 100% minus the enhanced FMAP. In FY2001, the states’ regular
Medicaid federal medical assistance percentages (FMAPs) range from 50% to
76.82%. Under the SCHIP program, the FY2001 enhanced FMAPs range from 65%
to 83.77% in the states. While all age groups of children have benefitted from
increases in eligibility for SCHIP coverage, many of the states have taken advantage
of these enhanced matching funds to extend eligibility to older adolescents.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Program Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Appropriations for FY1998 through FY2001 . . . . . . . . . . . . . . . . . . . . . . . 5
Allotments Among the States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Payments to the States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Tables
Table 1. Medicaid and SCHIP Income and Age Related Eligibility Criteria
as a Percent of the Federal Poverty Level . . . . . . . . . . . . . . . . . . . . . . . . . 12
Table 2. Financial Program Information for States and Territories FY2001 . . . 19
Table 3. Redistribution and Continued Availability of Unexpended FY1998
SCHIP Allotments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

The State Children’s Health Insurance
Program: Eligibility, Enrollment, and
Program Funding
Background
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. Several recent laws made technical and funding changes to Title XXI.1
The final rules and regulations governing the SCHIP program were published on
January 11, 2001 (Federal Register, v. 66, no. 8).2,3,4
1For more details, see CRS Report RL30400, Medicaid and the State Children’s Health
Insurance Program (SCHIP): Provisions in the Consolidated Appropriations Act of
FY2000,by Jean Hearne and Lisa Herz, and CRS Report RL30718, Medicaid, SCHIP and
Other Health Provisions in H.R. 5661: Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000, by Jean Hearne, Lisa Herz, and Evelyne
Baumrucker.
2Proposed regulations for governance of the program were published on November 8, 1999
(Federal Register, v. 64, no. 215). An earlier proposed rule for the SCHIP program reported
the allotments and grants to the states for FY1998 and FY1999 and appears in the Federal
Register, v. 64, no. 42 [Thursday, March 4, 1999] Proposed Rule. The final rule for the State
Children’s Health Insurance Program’s allotments and payments to states appeared in the
Federal Register, v. 65, no. 101 [Wednesday, May 24, 2000] Rules and Regulations. This
final rule provides final SCHIP program allotments for FY1998 through FY2000.
3On January 20, 2001 the Bush Administration issued a regulatory review memorandum
addressed to the heads and acting heads of executive departments and agencies. This
memorandum issues a 60-day delay on the effective dates of any of the Clinton
Administration’s regulatory actions published in the Federal Register in the last 60 days of
his Administration. It is not clear what will happen when the hold expires. The
Administration may turn to Congress to overturn some of the features of the regulations.
Alternatively, the Bush Administration could seek to retract the final rules and issue new ones.
Action of this type may be subject to legal challenge. The intent of Bush’s regulatory plan
review is to ensure that the President’s appointees have the opportunity to review any new or
pending regulations.
4In a January 8, 2001 Dear State Health Official Letter, distributed at the time the SCHIP
final rule was released, HCFA identified the main areas where new flexibility or further
clarification was provided. The issues highlighted include: (1) Premium Assistance Programs
(Employer-Sponsored Insurance), (2) Substitution Prevention, (3) Employment with a Public
Agency, (4) American Indians/Alaskan Natives, (5) Coordination with Medicaid, (6) Gender,
Race, Ethnicity, and Primary Language Reporting, (7) Cost-Sharing, (8) Access to Services,
and (9) Reviews of Eligibility, Enrollment and Health Services Decisions. For more details
(continued...)

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SCHIP is a federal-state partnership intended to provide health insurance
coverage to low-income, uninsured children. SCHIP targets children in families
whose annual incomes are higher than applicable Medicaid eligibility thresholds, and
who do not have other health insurance coverage. In the original enacting statute
Congress authorized and appropriated SCHIP federal matching grants in the amount
of $39.7 billion for FY1998 through FY2007. Later, Congress provided additional
appropriations for SCHIP in order to increase allocations to the territories, bringing
the total of appropriations available for the period closer to $40 billion.
States may choose from three options when designing their SCHIP programs.
They may expand their current Medicaid program, create a new, separate state
insurance 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 as long as it is cost effective to do so.5 As of late 1999,
HCFA approved SCHIP plans for all 50 states, the District of Columbia and the five
territories. As of December 11, 2000, 21 jurisdictions use Medicaid expansions (ME)
and another 16 use separate state programs (SSP) for their SCHIP programs, with the
remaining 19 providing health insurance coverage through a combination approach
(COMBO).
Eligibility
The federal Medicaid statute mandates that states cover certain groups of
children based on age and income criteria and gives states several options to expand
coverage beyond these federal minimum standards. Children (and families) who meet
the financial and categorical rules under the states’ former Aid to Families with
Dependent Children (AFDC) programs (in effect on July 16, 1996) are eligible for
Medicaid even if they do not qualify for cash grants under the new Temporary
Assistance for Needy Families (TANF) program. In addition, states must provide
coverage to all pregnant women and children age 5 and under living in families with
incomes at or below 133% of the federal poverty level. States also must phase in
coverage to children living in families with incomes below 100% of the federal
poverty level who were born after September 30, 1983, until all such children under
4(...continued)
of the program rules see forthcoming update of CRS Report 97-92, The State Children’s
Health Insurance Program: Guidance on Frequently Asked Questions.
5In the case of community-based health delivery systems, the cost of coverage cannot exceed,
on an average per child basis, the cost of coverage that would otherwise be provided. In the
case of family coverage, the alternative must be cost-effective relative to the amount paid to
obtain comparable coverage only of the targeted low-income children, and it must not
substitute for health insurance coverage that would otherwise be provided to the children.

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age 19 are covered.6 As a result of this requirement, in FY2001 states must cover all
children ages 6 to 17 whose family income is below the federal poverty threshold.7
States that wish to cover more children at higher levels of income, have the
option of (1) making pregnant women and infants under 1 year of age up to 185% of
the federal poverty level eligible for Medicaid; (2) using more liberal income and asset
standards to determine eligibility than those required under law (as allowed under
§1902(r)(2) of Medicaid law); and (3) using research and demonstration waivers
(authorized under §1115 of the Social Security Act) to cover children who would not
otherwise be eligible for the program. Forty-one states have expanded Medicaid
eligibility for at least some children beyond federal mandates.8 Table 1 shows income
limits for Medicaid eligibility as a percentage of the federal poverty level by age group
in each of the 50 states and the District of Columbia, in effect on June 1, 1997.9
Under SCHIP, states may cover uninsured children in families with incomes that
are above the state’s applicable Medicaid eligibility standard but less than 200% of
the federal poverty level. However, states, in which the maximum Medicaid income
level for children was at or above 200% federal poverty level as of June 1, 1997,10
may increase this income level by an additional 50 percentage points under SCHIP,
even if the resulting income limit exceeds 200% of the federal poverty level.
Not all targeted low-income uninsured children will necessarily receive medical
assistance under SCHIP for two reasons. First, unlike Medicaid, federal law does not
establish an individual entitlement to benefits under SCHIP. Instead, it entitles states
with approved SCHIP plans to pre-determined federal allotments based on a
distribution formula set in the law. Second, states are allowed under the law to define
the group of targeted low-income children who may enroll in SCHIP. Title XXI
6Medicaid eligibility for all low-income children born after September 30, 1983 was mandated
in the Omnibus Budget Reconciliation Act of 1990 (OBRA-90).
7These children are commonly referred to as the “Waxman Kids” after Representative Henry
Waxman of California who spearheaded eligibility expansions for children and pregnant
women under Medicaid in the late 1980s.
8As of October 1997, 35 states used various options available to them to exceed the federal
minimum mandate of 133% federal poverty level for pregnant women and infants. Thirteen
states expanded eligibility for children ages 1 through 5 above this same mandatory minimum
(133% FPL). Twenty-eight states moved beyond the federal mandate of 100% FPL and/or
age requirements for children ages 6 and older. See Henneberry, Joan. State Medicaid
Coverage of Pregnant Women and Children. NGA Center for Best Practices, Health Policy
Studies Division, September 30, 1997.
9The final rule for the SCHIP program (published in the Federal Register, v. 66, no. 8,
January 11, 2001) makes a change to the official start date of SCHIP. The date to which
income eligibility is keyed has changed from March 31, 1997 to June 1, 1997; however, the
final rule also states that children who became eligible for Medicaid as a result of an
expansion of Medicaid that was effective between March 31, 1997 and June 1, 1997 will be
considered targeted low-income children. The new start date will represent the lower bounds
for income eligibility in the SCHIP program. The final rule is subject to the Bush
Administration’s regulatory review. (See footnote 3.)
10Ibid.

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allows states to use the following characteristics in determining eligibility: geography,
age, income and resources, residency, disability status, access to other health
insurance, and duration of eligibility for SCHIP coverage.
In addition to the Medicaid eligibility thresholds in effect at the start of the
SCHIP program, Table 1 shows how the states, the District of Columbia, and the
territories11 will use SCHIP funds to expand eligibility thresholds beyond those
applicable under Medicaid. The table shows the type of SCHIP program implemented
as well as the targeted age groups affected. A majority of the states are expanding
eligibility to levels between 150% and 200% FPL. In one state, New Jersey, the
upper income eligibility limit for Medicaid expansions and separate state programs
under SCHIP has reached 350% of the federal poverty level.
While expansions in coverage have been achieved for all age groups of children
under SCHIP, the most significant increases in eligibility benefit older adolescents.
States are taking advantage of the opportunity to use enhanced matching funds under
SCHIP to cover a portion of the older teens ages 17-18 in families with incomes up
to 100% of the federal poverty level sooner than required under current Medicaid law.
In many cases, states are also expanding their programs to cover children of all ages
in families with income well above the 100% FPL requirement.
On January 18, 2001 HCFA approved the first three SCHIP §1115 waivers.
These waivers will allow the states of New Jersey, Rhode Island, and Wisconsin to
offer health insurance coverage to the parents of children eligible under either SCHIP
or Medicaid. Additionally, the demonstration projects in New Jersey and Rhode
Island will expand coverage to pregnant women.
At the start of the SCHIP program many states submitted Medicaid expansions
as place-holder plans to ensure their access to the enhanced matching funding
available through SCHIP. These early Medicaid expansions were used to create more
uniformity in income eligibility criteria (e.g., provide coverage to at least 100% FPL)
for all children under the age of 18. As the program has evolved, states have
submitted amendments to their original Medicaid expansions to define separate state
programs that further expand eligibility thresholds. Of the 43 state plan amendments
that expand eligibility in some way, 11 build on their original submission to create
combination programs that cover new groups of children not previously covered.
Twenty-three eligibility-related amendments increased thresholds beyond the limits
defined in the state’s original submission. Nine amendments have had the effect of
expanding eligibility under SCHIP by modifying methods of counting income through
the use of income disregards.12,13
11The five territories are American Samoa, the Commonwealth of the Northern Mariana
Islands, Guam, Puerto Rico, and the Virgin Islands.
12For determining income eligibility for SCHIP and Medicaid, some states may 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 increase
the effective income level above the stated standard. SCHIP state plans do not consistently
report the use of income disregards, nor whether the stated income standards include or
(continued...)

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Enrollment
Until recently, the 106th Congress and the Clinton Administration expressed
disappointment with implementation progress under SCHIP, citing low enrollment
rates early in the program. By FY2000, the pace of enrollment under SCHIP had
improved. Early enrollment estimates from HCFA14 indicated that nearly 1 million
children (982,000) were enrolled in SCHIP under 43 operational state programs as
of December 1998. More recently, HCFA reported that nearly 2 million children
(1,979,459) were enrolled in SCHIP by the end of FY1999 under 53 operational state
programs.15 Over 1.2 million of these children were served by separate state
programs and almost 700,000 were enrolled in Medicaid Expansions. On January 5,
2001, the Clinton Administration announced that enrollment in the SCHIP program
reached approximately 3.3 million children in FY2000, with 2.3 million children
enrolled in separate state programs, and a little more than 1 million enrolled in
Medicaid expansion programs.16 The Clinton Administration’s goal was to enroll 5
million children in SCHIP by FY2002.17 As of March 2000, an estimated 10.8 million
children under the age 19 were without health insurance in 1999, 6.3 million of those
children were from families with incomes less than 200% FPL.18
12(...continued)
exclude such disregards.
13CRS analysis of all amendments approved by HCFA as of January 30, 2001.
14Health Care Financing Administration. A Preliminary Estimate of the Children’s Health
Insurance Program Aggregate Enrollment Numbers Through December 31, 1998
(background only). April 20, 1999.
15Health Care Financing Administration. The State Children’s Health Insurance Program.
Annual Enrollment Report, October 1, 1998-September 30, 1999. (no date)
16Bureau of National Affairs. HCFA Releases Final SCHIP Rule, As Clinton Notes 70%
Participation Increase. Health Care Daily Report, v. 6, no. 5, January 8, 2001.
17At the time of enactment of BBA 97, CBO estimated that SCHIP would cover an
average of 2.3 million children per year after 1999. For more detail on the state by state
enrollment patterns in SCHIP, see CRS Report RL30556, Reaching Low-Income, Uninsured
Children: Are Medicaid and SCHIP Doing the Job? by Elicia Herz, and Evelyne
Baumrucker, and CRS Report RL30473, State Children’s Health Insurance Program: A
Brief Overview, by Elicia Herz and Evelyne Baumrucker.
18For more information on uninsured children, see CRS Report 97-310, Health Insurance:
Uninsured Children by State, 1997-1999, by Paulette Morgan and CRS Report 97-975,
Health Insurance Coverage of Children, 1999, by Madeline Smith.

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Program Funding
Appropriations for FY1998 through FY2001
The original enacting statute provided appropriations for SCHIP for FY1998
through FY2007. The statute authorizes and appropriates these funds in advance of
any appropriations act so that the SCHIP program operates like a mandatory spending
program. The appropriation committees do, however, have the authority to increase,
defer, or rescind funding for the SCHIP program and on several occasions have
considered proposals to do so. On three occasions, Congress has increased
appropriations for SCHIP, and on two occasions considered proposals to reduce
funding for the program.19
The law20 sets forth methodologies and procedures to determine state-specific
allotments of federal funds for each federal fiscal year; these are described below.
DHHS issues final rules in the Federal Register that enumerate specific state
allotments.
A total of $4.295 billion in federal matching funds was available to the states and
territories for FY1998.21 Of this total appropriation, the amount available for
allotment to the 50 states and the District of Columbia was $4.224 billion. An
additional $10.738 million was set-aside for allotment to the territories, as was
another $60 million for Special Diabetes Grants.22,23
19For more information see CRS Report RS20628, State Children’s Health Insurance
Program (SCHIP): Funding Changes in the 106th Congress, by Evelyne Baumrucker.
20Federal Register, v. 65, no. 101, May 24, 2000.
21P.L. 105-100, §162(8)(a), struck out “$4,275,000,000" and substituted “$4,295,000,000,”
effective as if included in the enactment of P.L. 105-33, August 5, 1997.
22The original authorizing legislation for SCHIP requires that .25% of the program’s total
authorization be set-aside for the territories. In addition, the law requires that the amount
available to the 50 states and the District of Columbia be further reduced (after the set-aside
to the territories) by $60,000,000; $30,000,000 each for a special diabetes research program
for Type I diabetes and for special diabetes programs for Native Americans. The diabetes
programs are funded out of the SCHIP appropriation for FY1998 through FY2002 only. P.L.
106-554 extends for 1 year, to FY2003, the authority for grants to be made for both the
Special Diabetes Program for Type I Diabetes and for the Special Diabetes Program for
Indians. P.L. 106-554 also expands funding available to these programs. For each grant
program , total funding will be increased to $100 million for each of FY2001, FY2002, and
FY2003. For FY2001 and FY2002, $30 million of the $100 million for each program will
be transferred from SCHIP; the remaining $70 million would be drawn from the Treasury out
of funds not otherwise appropriated. In FY2003, the entire $100 million will be drawn from
the Treasury out of funds not otherwise appropriated. In addition, P.L. 106-554, extends the
due date on final evaluation reports for these two grant programs from January 1, 2002 to
January 1, 2003.
23 P.L 106-554 requires the redistribution of unspent FY1998 and FY1999 allotments and a
method to be used for redistribution. See discussion later in the text.

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For FY1999, $4.307 billion in federal matching funds was appropriated for the
states and territories. For this year, an additional $32 million was appropriated for
allotment to the territories under the FY1999 Omnibus Appropriations Act, (P.L.
105-277). These new funds brought the FY1999 federal funds available to the
territories for SCHIP to $42.690 million. The states and the District of Columbia will
share $4.204 billion, and $60 million is available for diabetes grants for FY1999.24
For each of FY2000 and FY2001, SCHIP appropriations total $4.309 billion.
The amount of federal funds available for distribution to the states and the District of
Columbia is $4.204 billion. The territories will receive $44.890 million, consisting of
their original FY2000 (or FY2001) allotment plus an additional sum of $34.200
million provided by P.L. 106-113, the Balanced Budget Refinement Act. Again, $60
million is set aside for diabetes grants.25

Allotments Among the States
For each fiscal year, the states and the District of Columbia are allotted a
“proportion” of the total amount of title XXI dollars available for that year. A state’s
proportion refers to the amount of the allotment for a state for a given fiscal year
divided by the total amount available nationally for all states for that fiscal year. The
state proportions are determined by a two-step process described below.
Under the first step, each state’s proportion is calculated as the product of two
components: the Number of Children Factor and the State Cost Factor. In general,
the Number of Children Factor is the combination of the number of low-income
children regardless of insurance status, and the number of low-income, uninsured
children residing in a state for a given fiscal year.26 The State Cost Factor is the sum
of .85 multiplied by the ratio of the annual average wages per employee in the health
services industry for the year to the national average wages per such employee for the
year, and .15. For each fiscal year and state, counts of children are 3-year averages
taken from recent March Supplements of the Current Population Survey. Employee
wages are 3-year averages as reported by the Bureau of Labor Statistics.
The definition of the Number of Children Factor in this formula varies across
fiscal years. For FY1998 and FY1999 only, this factor is defined as the 3-year
average of uninsured children in families with income below 200% FPL. For FY2000
24Ibid.
25The Balanced Budget Refinement Act provided additional funding for SCHIP-related issues.
For each of the FY2000 through FY2007, $10 million is provided to the Secretary of
Commerce to make appropriate adjustments to the annual Current Population Survey (CPS)
to improve the reliability of state-specific estimates of the number of low-income uninsured
children. In addition, for FY2000, $10 million is provided for a new federal evaluation of the
SCHIP program. For more details on changes made to the Medicaid and SCHIP programs
by P.L. 106-113, see CRS Report RL30400, Medicaid and the State Children’s Health
Insurance Program (SCHIP): Provisions in the Consolidated Appropriations Act for
FY2000 by Jean Hearne and Elicia Herz. (Hereafter cited as CRS Report RL30400,
Medicaid and the State Children’s Health Insurance Program)
26Low-income is defined as a family with income below 200% of the federal poverty level.

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only, for each state this factor is the sum of 75% of the number of low-income
uninsured children, and 25% of the number of low-income children. For FY2001
through FY2007, for each state this factor is the sum of 50% of the number of low-
income, uninsured children and 50% of the number of low-income children.
In the second step, floors, ceilings, and a reconciliation process are applied to the
“preadjusted” proportions determined in step one. The SCHIP statute specifies three
minimum proportions that must be applied when determining each state’s allotment:
(1) the program floor for every state is $2 million; (2) for each fiscal year, the floor
will not be less than 90% of a state’s allotment proportion for the preceding year; and
(3) the floor is set at 70% of the proportion for FY1999. The state’s proportion must
not go below any of these three floors. Comparably, each state’s proportion for a
fiscal year is also limited by a maximum ceiling. The ceiling is equal to145% of a
state’s allotment proportion for FY1999. Finally, the sum of the “preadjusted”
proportions for all states must be equal to one. If they are not, the allotment
proportions will be subject to a reconciliation process. Under the reconciliation
process, if the application of the floors and ceilings across states results in a surplus
for a given year, HCFA must apply a pro-rata increase for all states below the ceiling.
If the distribution creates a deficit in a given year, there will be a ceiling in the
maximum increase permitted in that year to ensure budget neutrality.
A state’s final annual allotment is then calculated by multiplying the state’s
“adjusted” proportion for that fiscal year by the national total appropriated in that
year. Final allotments are published in the Federal Register.
Payments to the States
To receive federal funds, states must submit a plan describing their program to
the Health Care Financing Administration (HCFA) for approval. In order to access
FY1998 allotments, states must have received such approval prior to October 1,
1999. All states had approved plans by the deadline. Funds not drawn down from
a state’s federal allotment by the end of each fiscal year will continue to be available
for 2 additional fiscal years, giving each state a total of 3 years to spend its allotment
of federal matching funds from a given fiscal year. A state must draw down its entire
allotment from a given fiscal year before it may access the next year’s funding. For
example, FY2001 money not spent by the of FY2003 (as of September 30, 2003) will
be distributed, by a method to be determined by the Secretary of HHS, to states that
have fully expended their existing FY2001 allotments, and are able to provide
matching funds. These states will have 1 year to spend the redistributed funds.
Redistributed funds not spent by the end of the fiscal year in which they are reallotted
will officially expire.
Public Law 106-554 makes a change to the redistribution process by creating a
special rule for the redistribution and availability of unused FY1998 and FY1999
SCHIP allotments. States that use all their SCHIP allotments (for each of FY1998
and FY1999) will receive an amount equal to spending estimates in excess of their
original exhausted allotments submitted to HCFA as of a specified date. Each
territory that spends its original allotment will receive an amount that bears the same
ratio to 1.05% of the total amount available for redistribution as the ratio of its
original allotment to the total allotment for all territories.

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States that do not use all their SCHIP allotment will receive an amount equal to
the total amount of unspent funds, less amounts distributed to states that fully
exhausted their original allotments, multiplied by the ratio of a state’s unspent original
allotment to the total amount of unspent funds. States that did not use their full
FY1998 allotments may use up to 10% of the retained FY1998 funds under the new
redistribution formula specifically for outreach activities.
To calculate the amount available for redistribution in each formula described
above, the Secretary will use amounts reported by states not later than December 15,
2000 for the FY1998 redistribution, and November 30, 2001 for the FY1999
redistribution on the HCFA Form 64 or HCFA Form 21, as approved by the
Secretary.27 Redistributed funds will be available through the end of FY2002.
Federal law limits the funds available to pay for the administrative costs of
SCHIP to 10% of spending for benefits in any given year. Activities included in the
10% cap consist of (1) costs incurred through data collection, assessment of the state
plan, quality assurance activities, eligibility determination, performance measurements,
outreach and coordination initiatives, and public involvement, (2) health benefit
coverage of specialty and sub-speciality care, and (3) special initiatives for improving
the health of children.
Administrative costs tend to be higher during the initial start-up of a new
program, compared with the costs of running an existing program. During the first
2 years after SCHIP was enacted, many states in the start-up phase of their program
found the 10% cap to be particularly burdensome. Many states were concerned that
the 10% administrative cap would limit their ability to fund outreach initiatives
necessary to find and enroll eligible children. Because the 10% cap is applied to the
total benefit payments made to a state in any year (10% of the money a state actually
draws down, as opposed to its full allotment), states questioned whether there would
be sufficient funds available to pay the substantial start-up costs of their SCHIP
programs. In response to these concerns, HCFA published guidance that gives states
some flexibility on the 10% cap. As described above, P.L. 106-554 also makes a
special outreach accommodation for states that were not able to spend their entire
FY1998 SCHIP allotments.
States that chose Medicaid expansions can claim federal matching funds for
administrative and outreach expenditures either through the regular Medicaid program
at the applicable Medicaid federal matching rate or under SCHIP at the enhanced
matching rate. This allows states to spread out their administrative costs across two
programs. States also have the option to delay the submission of claims for
administrative expenditures to HCFA for up to 2 years from the date of the
expenditure. This process allows states with low benefit expenditures in the early
years of their program to maximize reimbursement for administrative expenditures at
the enhanced federal matching rate.
27Table 3 provides amounts of unexpended FY1998 SCHIP allotments available for
redistribution to states using all of their allotments and for continued availability to states
failing to use all of their allotments. FY1999 redistribution and continued availability totals
will not be available until after November 30, 2001.

CRS-10
Table 2 provides SCHIP program funding information for the states and
territories for FY2001. The second column of the table shows total allotments of
federal funds. Allotment amounts for FY2002 (and beyond) will be published in the
Federal Register.
Like Medicaid, SCHIP is a federal-state matching program. For each dollar of
state spending, the federal government will make a matching payment. The third and
fourth columns of Table 2, provide Federal Medical Assistance Percentages
(FMAP)28 and Enhanced Federal Medical Assistance Percentages (Enhanced FMAP).
Under Medicaid, a state’s share of program spending is equal to 100% minus the
FMAP for the state. Under SCHIP, the Enhanced FMAP is equal to the 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%.
For example, if a state has a Medicaid FMAP of 50%, under Medicaid the state must
spend 50 cents for every 50 cents that the federal government contributes. The
Enhanced FMAP would be equal to the Medicaid federal matching percentage
increased by 15 percentage points, (50% + (30% multiplied by 50%) = 65%). The
state share under SCHIP would be equal to 100% - 65% = 35%.
Compared with Medicaid FMAPs, which ranged from 50% to 76.82% in
FY2001, the Enhanced FMAP for the SCHIP programs ranged from 65% to 83.77%.
The Enhanced FMAP applies to all SCHIP assistance for targeted low-income
children, including child health coverage provided through a Medicaid expansion.
The FMAP and Enhanced FMAP are subject to ceilings of 83% and 85%,
respectively.
The totals in the fifth, sixth, and final columns of Table 2 are estimates of the
required state match necessary to claim the maximum federal SCHIP allotments;
estimates of the ratio of federal dollars spent to each state dollar; and estimates of
potential total program expenditures (state share + federal share), respectively.
Because states have 3 years to draw down a given year’s funding and the Enhanced
FMAPs are variable from year to year, it is not possible to report a precise dollar
amount in these columns. The Enhanced FMAP used to determine the required state
match is based on the date the state makes a payment to cover a SCHIP claim.29 The
state then submits claims for these payments to HCFA on a quarterly expenditure
report. Once state claims have been approved by HCFA, the federal portion is paid
to the state using the oldest open allotment and the Enhanced FMAP applicable to the
date the state made specific payments to providers. For example, assume a state
makes a payment to a provider in April of FY2001. If the state then submits its
corresponding claim to HCFA on its FY2001, third quarter expenditure report and
the state’s FY1999 allotted funds are still available, then the federal dollars paid to the
state for that claim will be paid out of the FY1999 allotment and the amount will be
based on the state’s FY2001 Enhanced FMAP.
28FMAP is a measure of the 3-year average per capita income in each state squared, compared
to that of the nation as a whole.
29Federal Register, v. 65, no. 101, May 24, 2000 and Federal Register, 45 CFR Parts 92 and
95, May 24, 2000.

CRS-11
Spending
Spending projections in the first 2 years of the program are consistent with
HCFA’s enrollment figures and fall well below total federal appropriation levels.
Federal spending in FY1998 totaled less than $500 million. Federal spending in
FY1999 totaled approximately $1 billion. Program spending is expected to accelerate
over time. CBO estimates that federal SCHIP spending will total approximately $1.8
billion for FY2000 and $2.6 billion for FY2001.30 For each of these years, total
annual federal appropriation levels are approximately $4.3 billion. Based on actual
spending as reported and certified by the states and approved by HCFA as of
December 15, 2000, $2.0 billion remained unspent from the FY1998 allotments by the
end of FY2000 and thus was subject to the special redistribution rules of P.L. 106-
554 in FY2001.31 At that point in time, only 12 states and five territories had claimed
their full FY1998 allotments. Table 3 provides amounts of unexpended FY1998
SCHIP allotments that are available for redistribution to states using all of their
allotments, and amounts that continue to be available for states failing to use all of
their allotments. It is too early to determine whether states will ultimately claim their
full FY1999, FY2000, or FY2001 federal SCHIP funding.32
For more information about SCHIP, see CRS Report 97-92, The State
Children’s Health Insurance Program: Guidance on Frequently Asked Questions,
CRS Report RL30718, Medicaid, SCHIP, and Other Health Provisions in H.R.
5661: Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of
2000, CRS Report RL30473, State Children’s Health Insurance Program: A Brief
Overview, and CRS Report RL30556, Reaching Low- Income, Uninsured Children:
Are Medicaid and SCHIP Doing the Job?
30U.S. Congressional Budget Office. CBO January 2001 Baseline. January, 2001.
Washington, GPO, 2001.
31HCFA’s FY1998 SCHIP spending projections are based on state submitted actual
expenditures through FY1999 and state submitted expenditure estimates for FY2000 through
February of this year (HCFA, unpublished data, April 4, 2000) See footnote 26.
32For more information on SCHIP funding changes in the 106th Congress, see CRS Report
RS20628, State Children’s Health Insurance Program (SCHIP): Funding Changes in the
106th Congress, by Evelyne P. Baumrucker.

CRS-12
Table 1. Medicaid and SCHIP Income and Age Related Eligibility Criteria as a Percent of the Federal Poverty Level
SCHIP (in effect January 1, 2001)c
Medicaid standards in effect March 31,
1997 (lower income boundary for SCHIP)a/b
Medicaid expansion
Separate state plan
Children
Children
age 6 and
ages 6
over
and over
Preg.
Preg.
teens
Children
(Through
teens
Children
(Through
Age 0
Ages 1
Ages 6
Ages 15
All ages
and
below
upper
Children
All ages
and
below
upper
Children
States
to 1d
thru 5e
thru 14 a
thru 18f
0-18
infantsd
age 6e
age limit)
17-18
0-18
infantsd
age 6e
age limit)
17-18
Alabama
133
133
100
15
–
–
–
–
100
200
–
–
–
–
Alaska
133
133
100
100
200
–
–
–
–
–
–
–
–
–
American
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Samoag
Arizona
140
133
100
30
–
–
–
–
–
200
–
–
–
–
Arkansash
133
133
100
18
–
–
–
–
100
–
–
–
–
–
(born
after
9/30/82
and
before
10/1/83)
California
200
133
100
82
–
–
–
–
100
250
–
–
–
–
Colorado
133
133
100
37
–
–
–
–
–
185
–
–
–
–
Connecticut
185
185
185
100
–
–
–
–
185
300i
–
–
–
–
Delaware
133
133
100
100
–
–
–
–
–
200
–
–
–
–

CRS-13
SCHIP (in effect January 1, 2001)c
Medicaid standards in effect March 31,
1997 (lower income boundary for SCHIP)a/b
Medicaid expansion
Separate state plan
Children
Children
age 6 and
ages 6
over
and over
Preg.
Preg.
teens
Children
(Through
teens
Children
(Through
Age 0
Ages 1
Ages 6
Ages 15
All ages
and
below
upper
Children
All ages
and
below
upper
Children
States
to 1d
thru 5e
thru 14 a
thru 18f
0-18
infantsd
age 6e
age limit)
17-18
0-18
infantsd
age 6e
age limit)
17-18
District of
185
133
100
50
200
–
–
–
–
–
–
–
–
–
Columbia
Florida j
185
133
100
28
–
200
–
–
100
200
–
–
–
–
(infants
(1 -18)
only)
Georgia
185
133
100
100
–
–
–
–
–
200
–
–
–
–
Guam k
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Hawaii l
185
133
100
100
200
–
–
–
–
–
–
–
–
–
Idaho
133
133
100
100
150
–
–
–
–
–
–
–
–
–
Illinois
133
133
100
46
–
–
–
133
–
185
–
–
–
–
(6-18)
(1-18)
Indiana
150
133
100
100
150
–
–
–
–
200
–
–
–
–
(1-18)
Iowa
185
133
100
37
–
200
–
–
133
200 m
–
–
–
–
(6-18)
(1-18)
Kansas
150
133
100
100
–
–
–
–
–
200
–
–
–
–
Kentucky
185
133
100
33
150
–
–
–
–
200
–
–
–
–
(1-18)
Louisiana
133
133
100
10
150
–
–
–
–
–
–
–
–
–

CRS-14
SCHIP (in effect January 1, 2001)c
Medicaid standards in effect March 31,
1997 (lower income boundary for SCHIP)a/b
Medicaid expansion
Separate state plan
Children
Children
age 6 and
ages 6
over
and over
Preg.
Preg.
teens
Children
(Through
teens
Children
(Through
Age 0
Ages 1
Ages 6
Ages 15
All ages
and
below
upper
Children
All ages
and
below
upper
Children
States
to 1d
thru 5e
thru 14 a
thru 18f
0-18
infantsd
age 6e
age limit)
17-18
0-18
infantsd
age 6e
age limit)
17-18
Maine
185
133
125
125
150
–
–
–
–
185
–
–
–
–
(1-18)
(1-18)
Maryland
185
185
185
100
200 n
–
–
–
–
300 n
–
–
–
–
Massachusetts
185
133
114
86
150
200
–
–
–
200
–
–
–
–
(1-18)
(1 -18)
Michigan
185
133
100
100
–
–
–
–
150
200
–
–
–
–
Minnesota
275
275
275
275
–
280
–
–
–
–
–
–
–
–
(0-2)
Mississippi
185
133
100
34
–
–
–
–
100
200
–
–
–
–
Missourio
185
133
100
100
300
–
–
–
–
–
–
–
–
–
Montana
133
133
100
40.5
–
–
–
–
–
150
–
–
–
–
Nebraska
150
133
100
33
185
–
–
–
–
–
–
–
–
–
Nevada
133
133
100
31
–
–
–
–
–
200
–
–
–
–
New
185
185
185
185
300
–
–
–
300
–
–
–
–
Hampshire
(infants
(1-18)p
only)

CRS-15
SCHIP (in effect January 1, 2001)c
Medicaid standards in effect March 31,
1997 (lower income boundary for SCHIP)a/b
Medicaid expansion
Separate state plan
Children
Children
age 6 and
ages 6
over
and over
Preg.
Preg.
teens
Children
(Through
teens
Children
(Through
Age 0
Ages 1
Ages 6
Ages 15
All ages
and
below
upper
Children
All ages
and
below
upper
Children
States
to 1d
thru 5e
thru 14 a
thru 18f
0-18
infantsd
age 6e
age limit)
17-18
0-18
infantsd
age 6e
age limit)
17-18
New Jersey
185
133
100
41
–
–
–
133
–
350
–
–
(6-18)
200
(parents
and
pregnant
women)z
New Mexico
185
185
185
185
235
–
–
–
–
–
–
–
–
–
New Yorkj
185
133
100
51
–
–
–
–
100
192
–
–
–
–
North
185
133
100
100
–
–
–
–
–
200
–
–
–
–
Carolina
Northern
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Marianasq
North Dakota
133
133
100
100 (thru
–
–
–
–
100
140
–
–
–
–
age 17)
(18 only)
Ohio
133
133
100
33
200
–
–
–
–
–
–
–
–
–
Oklahoma
150
133
100
48
185
–
–
–
–
–
–
–
–
–
(0-17
and
preg.
teens)
Oregon
133
133
100
100
–
–
–
–
–
170
–
–
–
–
Pennsylvania j
185
133
100
41
–
–
–
–
–
200r
–
–
–
–

CRS-16
SCHIP (in effect January 1, 2001)c
Medicaid standards in effect March 31,
1997 (lower income boundary for SCHIP)a/b
Medicaid expansion
Separate state plan
Children
Children
age 6 and
ages 6
over
and over
Preg.
Preg.
teens
Children
(Through
teens
Children
(Through
Age 0
Ages 1
Ages 6
Ages 15
All ages
and
below
upper
Children
All ages
and
below
upper
Children
States
to 1d
thru 5e
thru 14 a
thru 18f
0-18
infantsd
age 6e
age limit)
17-18
0-18
infantsd
age 6e
age limit)
17-18
Puerto Ricos
–
–
–
–
200
–
–
–
–
–
–
–
–
–
(0-18)s
Rhode Island
250
250 (thru
100
100
–
–
–
185
–
–
–
–
–
–
age 7)
(ages 8
(parents)z
thru 14)
250
(8-18
and
pregnant
women)t
u
u
u
South
185
150
–
–
–
–
–
–
–
–
–
Carolina
(1-18)u
South Dakota
133
133
100
100
140
–
–
–
–
200
–
–
–
–
Tennesseev
–
–
–
16
–
–
–
–
100
–
–
–
–
–
(17-18)v
Texas
185
133
100
17
–
–
–
–
100
200
–
–
–
–
Utah
133
133
100
100 (thru
–
–
–
–
–
200
–
–
–
–
age 17)
Vermont
225
225
225
225
–
–
–
–
–
300
–
–
–
–
(0-17)w
Virginia
133
133
100
100
–
–
–
–
–
200
–
–
–
–

CRS-17
SCHIP (in effect January 1, 2001)c
Medicaid standards in effect March 31,
1997 (lower income boundary for SCHIP)a/b
Medicaid expansion
Separate state plan
Children
Children
age 6 and
ages 6
over
and over
Preg.
Preg.
teens
Children
(Through
teens
Children
(Through
Age 0
Ages 1
Ages 6
Ages 15
All ages
and
below
upper
Children
All ages
and
below
upper
Children
States
to 1d
thru 5e
thru 14 a
thru 18f
0-18
infantsd
age 6e
age limit)
17-18
0-18
infantsd
age 6e
age limit)
17-18
Virgin
–
–
–
–
Family
–
–
–
–
–
–
–
–
–
Islandsx
of four
<$8,500
annually
Washington
200
200
200
200
–
–
–
–
–
250
–
–
–
–
West Virginia
150
133
100
100
–
–
–
–
–
200
–
–
–
–
Wisconsin
185
185
100
45
–
–
185
–
–
–
–
–
–
–
(6-18 and
parents)y,z
Wyoming
133
133
100
55
–
–
–
–
–
–
–
–
133
–
Source: CRS analysis of submitted state plans and amendments.
a Title XXI contains a provision that a child’s family income must exceed the applicable Medicaid income level that was in effect on March 31, 1997 in order for that child to be eligible for SCHIP-
funded coverage. The SCHIP final rule (published in the Federal Register, v. 66, no. 8, Thursday January 11, 2001) changes the start date of SCHIP from March 31, 1997 to June 1, 1997 and further
stipulates that children who became eligible for Medicaid as a result of an expansion of Medicaid that was effective between March 31 and June 1, 1997 are to be considered targeted low-income children.
These percentages represent the lower income boundary for the SCHIP program. Information for the Medicaid eligibility portion of this table comes from the Health Care Financing Administration,
The State Children’s Health Insurance Program; Annual Enrollment Report; October 1, 1998 through September 30, 1999; January 2000. Medicaid expansion and separate state expansion program
eligibility limits were updated to reflect amendments approved as of December 11, 2000.
b In 34 states, children may also qualify for Medicaid through medically needy programs (data not shown). In most cases, income criteria for medically needy programs are above AFDC-related standards
but less than 133% of the federal poverty level.
c The 2000 federal poverty guideline for a family of three is $14,150 per year; for Alaska $17,690; and for Hawaii $16,270.
d To be eligible as an infant, a child is under age 1 and has not yet reached his or her first birthday.
e To be eligible in this category, the child is age 1 or older, but has not yet reached his or her 6th birthday.
f Federal law requires states to provide Medicaid to children in families with incomes that meet the state’s former Aid to Families with Dependent Children (AFDC) income eligibility standards in effect
on July 16, 1996. In addition, since July 1, 1991, states (under OBRA 1990) have been required to cover all children under age 19, who were born after September 30, 1983, and whose family income
is below 100% of the federal poverty level. The 1983 start date means that the mandatory coverage is extended to children by one age cohort each year until reaching those under age 19 in FY2002.

CRS-18
If a state has expanded eligibility to older children beyond the OBRA 1990 mandate, the former AFDC standard as it applies to Medicaid eligibility is not applicable. The data in this column reflect
the federal minimum requirements of states for children ages 15 and older on June 1, 1997 (see footnote “a”). The eligibility levels recorded in this column were in effect at the start of the SCHIP
program and thus represent the lower income boundary for SCHIP.
g In American Samoa, Medicaid and SCHIP eligibility determinations are based on a system they call “presumptive eligibility.” Presumptive eligibility under Medicaid and SCHIP normally means
a period of time for which a person is “presumed eligible” for Medicaid or SCHIP benefits. During this time, services may be rendered and billed to the Medicaid or SCHIP program with the
understanding that an official eligibility determination will be made and the beneficiary will be properly enrolled shortly after receiving services. American Samoa uses the term “presumptive eligibility”
to refer to its process for setting its income eligibility limits for coverage under its Medicaid Program. American Samoa does not use a system of individual eligibility determinations.
h Arkansas increased Medicaid eligibility to 200% FPL effective September 1997 through a §1115 demonstration authority.
i State-sponsored health insurance will be available to all uninsured children in Connecticut. If the family’s income is above 300% federal poverty level, the family will be expected to pay premiums
and cost-sharing to access services. For children with family incomes greater than 300% federal poverty level, only state dollars will be used for funding.
j These states had state-funded programs that existed prior to SCHIP. Title XXI permitted children in these state-funded programs to be covered under SCHIP and required these states to maintain their
previous levels of state spending.
k In Guam, Medicaid and SCHIP eligibility determinations are made by the Department of Public Health and Social Services. The Medicaid program claims federal financial participation (FFP) only
for covered services to the categorically needy.
l Hawaii’s coverage of pregnant women and children is through Hawaii QUEST, a §1115 waiver managed care program.
m On January 3, 2000, the state submitted an amendment to its approved Title XXI plan which allows for a 20% deduction to earned income in determining eligibility for the Hawk-I program and includes
an additional managed health care plan, Unity Choice, from Wellmark Health Plan of Iowa.
n Maryland submitted an amendment January 3, 2000 that amends its §1115 demonstration waiver to implement state legislation enacted in the 1999 legislative session. It imposes a premium on children
whose families have incomes above 185% FPL enrolled in the Maryland Children’s Health Program by July 1, 2000. Maryland’s expansion to 300% FPL was approved by HCFA but will not be
implemented until July 1, 2001.
o Missouri will use Title XXI funds to expand its Medicaid program to children up to age 18 with family incomes up to 185% federal poverty level; Missouri will cover children with family incomes
between 186-300% of the federal poverty level with their §1115 Medicaid Waiver. The §1115 waiver allows the state to charge cost sharing payments to eligible families between 186-300% of the
federal poverty level for children between the ages 0-18. The §1115 Medicaid Waiver will be financed with Title XXI enhanced matching funds.
p New Hampshire will apply an income disregard to determine eligibility for SCHIP.
q The Northern Mariana Islands do not have an AFDC or TANF program. However, it is the only U.S. Territory that does have Supplemental Security Income (SSI), and its entire Medicaid program
is based on SSI requirements. All individuals receiving SSI cash payments are eligible for Medicaid. All other individuals who meet the income and resource standards for SSI, with the standard
exemptions and deductions, are also eligible. In addition, although the Northern Mariana Islands do not have a medically needy program, anyone can spend down to become eligible for any month in
which medical costs reduce income to the appropriate level.
r Pennsylvania uses state funds to extend coverage up to 235% of the federal poverty level for all children up to their 19th birthday.
s Puerto Rico’s Medicaid program extends covered services to both the categorically needy (TANF) and the medically needy. There is no SSI, rather the former mainland classifications of Old Age
Assistance, Aid to the Blind, Aid to the Permanently and Totally Disabled, exist. Although mandated on the mainland, the Commonwealth has not opted to cover poverty level groups, and is exempt
from requirements linking the “medically needy” income levels to “categorically needy” (formerly AFDC) income levels. The FY2000 medically needy income level for a family of four is 8,220 with
a resource level of $900. The FY2000 categorically needy standard for a family of four is $1,536.
t Rhode Island expanded Medicaid eligibility up to 250% federal poverty level through a §1115 waiver. Benefits for children age 8 thru age 18 under this waiver will be financed by Title XXI funds
and are considered the state’s Medicaid Expansion under SCHIP. HCFA approved eligibility up to 300% FPL as submitted in the state’s original plan submission, but the Rhode Island state legislature
has not approved this expansion.
u In August of 1997, the South Carolina state legislature approved an expansion of the state’s Medicaid program to cover all children in families with incomes less than 150% federal poverty level up
to age 19. Because Title XXI was created just months later (October of 1997) HCFA approved the use of Title XXI funds for this expansion. Cells were left blank in the Medicaid columns to underscore
that the expansion to Medicaid in the state is funded by Title XXI.
v TennCare offers health insurance for uninsured families at any income level. Premiums are charged on a sliding fee scale based on family size and income. Uninsured enrollees from families with
incomes above 400% federal poverty level are charged a monthly premium based on a higher sliding fee scale than for those below 400% federal poverty level. Through SCHIP, the state will extend
eligibility to uninsured children born before October 1, 1983, who are under age 19 in families with incomes at or below 100% of the federal poverty level and who could not have been enrolled under
the operating rules for the state’s Medicaid demonstration program before April 1, 1997. TennCare’s eligibility for this population was officially closed on March 31, 1997 because they had exhausted
state and federal dollars at the regular Medicaid FMAP. The state can cover this population with Title XXI enhanced matching funds since this group was not covered by Medicaid at the date specified
in the SCHIP legislation, and therefore would be eligible for SCHIP.

CRS-19
w In Vermont Title XXI funds are used to cover children through their 17th birthday up to 300% FPL. Vermont also covers under-insured children through age 17 up to 300% FPL using a §1115 Medicaid
waiver with §1902(r)(2) cost-sharing requirements.
x The Virgin Islands cover the medically needy, and persons in families with an annual income less than $8,500. There is an income disregard of $1,800 for specified resources. HCFA approved a state
plan amendment on February 4, 2000 that permits the use of SCHIP monies to pay any medical expenses incurred after the Virgin Islands runs out of Medicaid federal dollars. Previously, SCHIP
payments were restricted for payments to hospitals and clinics. The amendment allows the Virgin Islands to pay inpatient pediatric medical bills incurred by an approved medical provider for children
less than age 19 in the territory’s hospitals.
y Once a family is enrolled, eligibility is maintained until income exceeds 200% federal poverty level. Wisconsin may receive enhanced Title XXI FMAP to cover both parents and children if the cost-
effectiveness of family coverage is demonstrated. Also, Wisconsin may cover families through employer-sponsored insurance when it is demonstrated to be cost-effective.
z On January 18, 2001 HCFA approved the first round of SCHIP §1115 waivers. These waivers will allow the states of New Jersey, Rhode Island, and Wisconsin to offer health insurance coverage
to the parents of children eligible under either SCHIP or Medicaid. Additionally, the demonstration projects in New Jersey and Rhode Island will expand coverage to pregnant women.
Table 2. Financial Program Information for States and Territories FY2001a
Federal
Required state match
dollars for
Total federal
for maximum federal
each state
Potential total program
allotments in dollars
FMAP %
Enhanced FMAP
allocation in dollars
dollar
expenditures in dollars (federal
State (or other territory)
FY2001b
FY2001c
% FY2001c
FY2001d
FY2001d
share +state share FY2001)d
Alabama
69,331,033
69.99
78.99
18,879,738
3.67
88,210,771
Alaska
8,987,100
56.04
69.23
3,652,997
2.46
12,640,097
American Samoa
538,650
50.00
65.00
290,042
1.86
828,692
Arizona
124,519,004
65.77
76.04
39,546,738
3.15
164,065,742
Arkansas
53,957,231
73.02
81.11
12,592,903
4.28
66,550,134
California
704,930,926
51.25
65.88
362,844,683
1.94
1,067,775,609
Colorado
44,648,559
50.00
65.00
23,753,033
1.88
68,401,592
Connecticut
39,398,021
50.00
65.00
21,214,319
1.86
60,612,340
Delaware
10,505,758
50.00
65.00
5,656,947
1.86
16,162,705
District of Columbia
11,751,544
70.00
79.00
3,123,828
3.76
14,875,372

CRS-20
Federal
Required state match
dollars for
Total federal
for maximum federal
each state
Potential total program
allotments in dollars
FMAP %
Enhanced FMAP
allocation in dollars
dollar
expenditures in dollars (federal
State (or other territory)
FY2001b
FY2001c
% FY2001c
FY2001d
FY2001d
share +state share FY2001)d
Florida
220,217,905
56.62
69.63
97,821,913
2.25
318,039,818
Georgia
135,053,332
59.67
71.77
52,068,074
2.59
187,121,406
Guam
1,571,063
50.00
65.00
845,957
1.86
2,417,020
Hawaii
11,669,166
53.85
67.70
6,032,804
1.93
17,701,970
Idaho
20,715,109
70.76
79.53
5,498,503
3.77
26,213,612
Illinois
159,838,759
50.00
65.00
86,067,024
1.86
245,905,783
Indiana
63,023,791
62.04
73.43
23,422,569
2.69
86,446,360
Iowa
32,940,215
62.67
73.87
11,451,262
2.88
44,391,477
Kansas
29,337,719
59.85
71.90
11,412,740
2.57
40,750,459
Kentucky
55,939,972
70.39
79.27
14,558,365
3.84
70,498,337
Louisiana
82,017,657
70.53
79.37
21,431,853
3.83
103,449,510
Maine
13,444,691
66.12
76.28
4,145,505
3.24
17,590,196
Maryland
51,422,315
50.00
65.00
27,688,939
1.86
79,111,254
Massachusetts
55,879,946
50.00
65.00
30,089,202
1.86
85,969,148
Michigan
119,473,472
56.18
69.33
57,022,605
2.10
176,496,077
Minnesota
37,042,610
51.11
65.78
19,118,221
1.94
56,160,831
Mississippi
55,987,988
76.82
83.77
10,860,747
5.16
66,848,735
Missouri
65,460,375
61.03
72.72
25,051,736
2.61
90,512,111
Montana
15,169,315
73.04
81.13
3,700,243
4.10
18,869,558

CRS-21
Federal
Required state match
dollars for
Total federal
for maximum federal
each state
Potential total program
allotments in dollars
FMAP %
Enhanced FMAP
allocation in dollars
dollar
expenditures in dollars (federal
State (or other territory)
FY2001b
FY2001c
% FY2001c
FY2001d
FY2001d
share +state share FY2001)d
Nebraska
19,084,374
60.38
72.27
7,124,622
2.68
26,208,996
Nevada
31,344,200
50.36
65.25
16,812,981
1.86
48,157,181
New Hampshire
11,932,994
50.00
65.00
6,425,458
1.86
18,358,452
New Jersey
98,823,044
50.00
65.00
53,212,408
1.86
152,035,452
New Mexico
50,766,995
73.80
81.66
11,756,109
4.32
62,523,104
New York
322,025,819
50.00
65.00
173,398,518
1.86
495,424,337
North Carolina
103,718,942
62.47
73.73
36,364,230
2.85
140,083,172
North Dakota
6,575,656
69.99
78.99
1,751,510
3.75
8,327,166
Northern Marianas
493,763
50.00
65.00
265,872
1.86
759,635
Ohio
142,214,540
59.03
71.32
58,265,688
2.44
200,480,228
Oklahoma
69,088,406
71.24
79.87
17,654,869
3.91
86,743,275
Oregon
50,134,100
60.00
72.00
19,231,998
2.61
69,366,098
Pennsylvania
138,968,854
53.62
67.53
66,593,101
2.09
205,561,955
Puerto Rico
41,116,950
50.00
65.00
22,139,896
1.86
63,256,846
Rhode Island
9,300,803
53.79
67.65
4,422,865
2.10
13,723,668
South Carolina
64,591,234
70.44
79.31
17,192,295
3.76
81,783,529
South Dakota
8,177,039
68.31
77.82
2,342,151
3.49
10,519,190
Tennessee
86,296,823
63.79
74.65
29,871,533
2.89
116,168,356
Texas
452,531,213
60.57
72.40
164,261,330
2.75
616,792,543

CRS-22
Federal
Required state match
dollars for
Total federal
for maximum federal
each state
Potential total program
allotments in dollars
FMAP %
Enhanced FMAP
allocation in dollars
dollar
expenditures in dollars (federal
State (or other territory)
FY2001b
FY2001c
% FY2001c
FY2001d
FY2001d
share +state share FY2001)d
Utah
30,184,401
71.44
80.01
7,450,843
4.05
37,635,244
Vermont
4,611,995
62.40
73.68
1,666,277
2.77
6,278,272
Virginia
75,491,290
51.85
66.30
38,576,846
1.96
114,068,136
Virgin Islands
1,167,075
50.00
65.00
628,425
1.86
1,795,500
Washington
60,869,643
50.70
65.49
30,904,193
1.97
91,773,836
West Virginia
21,144,989
75.34
82.74
4,566,847
4.63
25,711,836
Wisconsin
49,597,970
59.29
71.50
19,977,924
2.48
69,575,894
Wyoming
7,193,664
64.60
75.22
2,404,264
2.99
9,597,928
Source: CRS analysis of submitted state plans, and Federal Register, v. 66, no. 14, January 22, 2001 and Federal Register, v. 65, no. 36, February 23, 2000.
a Financial information for FY2001 is published in the Federal Register, v. 66, no. 14, January 22, 2001. FMAP and Enhanced FMAP figures for FY2001 can be found in the Federal
Register, v. 65, no. 36, February 23, 2000.
b The amount of federal funding available for allotment to the states and the District of Columbia for FY2001 is $4,204,312,500, determined by reducing the FY2001 appropriation
($4,275,000,000) by the total amount available for allotment to the Commonwealths and Territories ($10,687,500) and amounts for the Special Diabetes Grants ($60,000,000) under
sections 4921 and 4922 of BBA 97. The diabetes programs are funded from FY1998 through FY2002 only. P.L. 106-113 increased amounts available to the territories by
$34,200,000 for FY2001. The total amount of federal funds available to the Commonwealths and territories in FY2001 is therefore $44,887,500. Total appropriations available to
states and territories is $4.309 billion. Allotments for FY2001 come from Federal Register, v. 66, no. 14, January 22, 2001.
c These numbers represent the Federal Medical Assistance Percentage (FMAP) and the Enhanced FMAP. They are effective from October 1, 2000 to September 30, 2001 and are
presented in the Federal Register, v. 65, no. 36, February 23, 2000.
d The totals in these columns are: (1) estimates of the required state match necessary to claim maximum federal SCHIP allotments; (2) estimates of the ratio of federal dollars spent
to each state dollar; and (3) estimates of potential total program expenditures (state share + federal share). Because state have 3 years to draw down a given year’s funding and the
Enhanced FMAP rates are variable from year to year – it is not possible to report a precise dollar amount in these columns.

CRS-23
Table 3. Redistribution and Continued Availability of Unexpended FY1998 SCHIP Allotments
FY1998-FY2000
expenditures as reported
and certified by states,
and approved by HCFA,
through December 15,
Unexpended FY1998
Continued allotment
State (or other territory)
2000
FY1998 allotment
allotment amounts
Redistributed amounts
availabilitya
Alabama
$57,311,038
$85,975,213
$28,664,175
NA
$18,512,188
Alaska
$21,894,847
$6,889,296
NA
$15,005,551
NA
Arizona
$38,242,389
$116,797,799
$78,555,410
NA
$50,733,452
Arkansas
$2,202,763
$47,907,958
$45,705,195
NA
$29,517,793
California
$257,011,950
$854,644,807
$597,632,857
NA
$385,969,313
Colorado
$23,942,735
$41,790,546
$17,847,811
NA
$11,526,654
Connecticut
$25,062,575
$34,959,075
$9,896,500
NA
$6,391,458
Delaware
$2,289,855
$8,053,463
$5,763,608
NA
$3,722,312
District of Columbia
$6,262,215
$12,076,002
$5,813,787
NA
$3,754,719
Florida
$183,046,365
$270,214,724
$87,168,359
NA
$56,295,954
Georgia
$56,178,012
$124,660,136
$68,482,124
NA
$44,227,820
Hawaii
$420,296
$8,945,304
$8,525,008
NA
$5,505,707
Idaho
$12,775,632
$15,879,707
$3,104,075
NA
$2,004,705
Illinois
$53,472,202
$122,528,573
$69,056,371
NA
$44,598,686
Indiana
$115,420,868
$70,512,432
NA
$44,908,436
NA
Iowa
$26,332,129
$32,460,463
$6,128,334
NA
$3,957,863

CRS-24
FY1998-FY2000
expenditures as reported
and certified by states,
and approved by HCFA,
through December 15,
Unexpended FY1998
Continued allotment
State (or other territory)
2000
FY1998 allotment
allotment amounts
Redistributed amounts
availabilitya
Kansas
$21,561,892
$30,656,520
$9,094,628
NA
$5,873,585
Kentucky
$77,851,894
$49,932,527
NA
$27,919,367
NA
Louisiana
$35,655,148
$101,736,840
$66,081,692
NA
$42,677,548
Maine
$17,018,705
$12,486,977
NA
$4,531,728
NA
Maryland
$106,284,158
$61,627,358
NA
$44,656,800
NA
Massachusetts
$79,551,043
$42,836,231
NA
$36,714,812
NA
Michigan
$51,726,748
$91,585,508
$39,858,760
NA
$25,741,989
Minnesota
$15,221
$28,395,980
$28,380,759
NA
$18,329,150
Mississippi
$29,178,423
$56,017,103
$26,838,680
NA
$17,333,228
Missouri
$60,909,264
$51,673,123
NA
$9,236,141
NA
Montana
$4,887,358
$11,740,395
$6,853,037
NA
$4,425,898
Nebraska
$9,881,246
$14,862,926
$4,981,680
NA
$3,217,319
Nevada
$13,063,864
$30,407,067
$17,343,203
NA
$11,200,763
New Hampshire
$2,539,250
$11,458,404
$8,919,154
NA
$5,760,258
New Jersey
$70,008,328
$88,417,899
$18,409,571
NA
$11,889,456
New Mexico
$4,210,228
$62,972,705
$58,762,477
NA
$37,950,579
New York
$690,516,665
$255,626,409
NA
$434,890,256
NA
North Carolina
$100,410,653
$79,508,462
NA
$20,902,191
NA

CRS-25
FY1998-FY2000
expenditures as reported
and certified by states,
and approved by HCFA,
through December 15,
Unexpended FY1998
Continued allotment
State (or other territory)
2000
FY1998 allotment
allotment amounts
Redistributed amounts
availabilitya
North Dakota
$1,859,325
$5,040,741
$3,181,416
NA
$2,054,654
Ohio
$97,579,565
$115,734,364
$18,154,799
NA
$11,724,916
Oklahoma
$51,257,243
$85,699,060
$34,441,817
NA
$22,243,563
Oregon
$20,147,896
$39,121,663
$18,973,767
NA
$12,253,831
Pennsylvania
$123,046,184
$117,456,520
NA
$5,589,664
NA
Rhode Island
$12,671,272
$10,684,422
NA
$1,986,850
NA
South Carolina
$116,071,531
$63,557,819
NA
$52,513,712
NA
South Dakota
$4,655,275
$8,541,224
$3,885,949
NA
$2,509,663
Tennessee
$41,705,133
$66,153,082
$24,447,949
NA
$15,789,222
Texas
$81,261,672
$561,331,521
$480,069,849
NA
$310,043,579
Utah
$20,835,906
$24,241,159
$3,405,253
NA
$2,199,215
Vermont
$1,955,112
$3,535,445
$1,580,333
NA
$1,020,627
Virginia
$23,549,911
$68,314,914
$44,765,003
NA
$28,910,588
Washington
$604,279
$46,661,213
$46,056,934
NA
$29,744,956
West Virginia
$10,771,106
$23,606,744
$12,835,638
NA
$8,289,642
Wisconsin
$23,461,361
$40,633,039
$17,171,678
NA
$11,089,987
Wyoming
$1,040,982
$7,711,638
$6,670,656
NA
$4,308,111
Total states only
$2,889,609,712
$4,224,262,500
$2,033,508,296
$698,855,508
$1,313,300,951

CRS-26
FY1998-FY2000
expenditures as reported
and certified by states,
and approved by HCFA,
through December 15,
Unexpended FY1998
Continued allotment
State (or other territory)
2000
FY1998 allotment
allotment amounts
Redistributed amounts
availabilitya
Commonwealths and territories
Puerto Rico
$75,076,505
$9,835,550
NA
$19,558,283
NA
Guam
$1,536,662
$375,812
NA
$747,314
NA
Virgin Islands
$898,004
$279,175
NA
$555,148
NA
Northern Marianas
$2,795,386
$118,113
NA
$234,870
NA
Total
$82,807,173
$10,737,500
$0
$21,351,837
$0
National Total
$2,972,416,885
$4,235,000,000
$2,033,508,296
$720,207,345
$1,313,300,951
Total FY1998
redistribution and retained
Total FY1998
Total FY1998 retained
amounts
redistributed amounts
amounts
Source: Health Care Financing Administration.
a The following example illustrates how amounts of redistributed funds are calculated for individual states failing to spend their full FY1998 allotments. According to P.L.106-554,
states that do not use all their SCHIP allotment will receive an amount equal to the total amount of unspent funds, less amounts distributed to states that fully exhausted their original
allotments, multiplied by the ratio of a state’s unspent original allotment to the total amount of unspent funds. For Alabama, this amount equals: ($2,033,508,296 - $698,855,508)
multiplied by ($28,664,175 / $2,033,508,296). This amount is a preadjusted amount. The sum of the “preadjusted” proportions for all states must be equal to one. If they are not,
the allotment proportions are subject to a reconciliation process to ensure budget neutrality.