Expanding SCHIP - December 6 2007 Expanding SCHIP Not the...

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December 6, 2007 Expanding SCHIP: Not the Best Option for States by  Edmund F. Haislmaier  and Greg D'Angelo WebMemo #1725  While Washington has been deadlocked over reauthorization of the State Children's Health  Insurance Program (SCHIP), many governors and state policymakers have actively supported  Congress not only reauthorizing the program but expanding it further to include uninsured  children in families with incomes between 200 percent and 300 percent of the Federal Poverty  Level (FPL). State lawmakers tend to be supportive of increased SCHIP eligibility largely because  they see it as a way to "draw down" additional federal funding for their states. State lawmakers need to remember that while an expanded SCHIP program might bring their  states more federal dollars, those dollars are conditional on state governments spending  additional tax money to match. Indeed, to take up Congress's offer of federal funding for  expanding SCHIP, the states would collectively have to come up with as much as an additional  $1.5 billion in the first year alone; that level of spending would rise in future years. As the SCHIP  debate in Congress drags on, state lawmakers need to rethink whether asking Washington to  further expand the program up the income scale is the best policy, not only for ensuring health  care for children but for the health of state budgets as well. The Cost to States of Expanding SCHIP Eligibility Even though SCHIP is a joint federal-state program that, on average, requires states to pay a  little more than a third of the program's costs, the debate thus far has focused mainly on the  federal cost of expanding eligibility. [1]  What have been largely overlooked are the associated cost  implications for state budgets. Congress's proposal, which is set to meet another presidential  veto, [2]  expands the program's target eligibility level from children in families with incomes below  200 percent of the FPL  [3]  to those with incomes up to 300 percent of the FPL. [4]  Should  Congress override the President's expected veto, and states begin to draw down federal dollars  to expand the program as Congress envisions, states will quickly learn that the additional federal  "help" comes at the price of a corresponding increase in state taxing and spending.
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This note was uploaded on 04/28/2008 for the course POLI SCI 444 taught by Professor Yackee during the Fall '07 term at University of Wisconsin.

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Expanding SCHIP - December 6 2007 Expanding SCHIP Not the...

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