Impact on States of Revised Redistribution of Unspent FY2002 SCHIP Allotments

Publication Date: October 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

Type:

Abstract:

In January 2005, the Secretary of Health and Human Services (HHS) proposed a procedure for redistributing states' unspent FY2002 original allotments from the State Children's Health Insurance Program (SCHIP). The intent was first to target the funds to states projected to exhaust all available federal SCHIP balances in FY2005, based on the states' spending estimates provided in November 2004. After covering the projected shortfalls, the remaining unspent FY2002 allotments were to be redistributed among all states that had exhausted their FY2002 original allotments. However, once the schema was announced, Rhode Island officials determined that they had submitted an inaccurate expenditure estimate and, unless the methodology was altered, the state would face a shortfall in FY2005 of more than $20 million. On September 29, 2005, the final notice was released announcing the revised amounts these states would receive in the redistribution of unspent FY2002 original allotments. The only change in the methodology was to use states' SCHIP spending estimates from August 2005 rather than from November 2004. This report summarizes the impact of this change across states. Under the final notice, four states receive more money and 24 states receive less than they would have under the proposed notice. The other 22 states were not affected because they did not spend all of their FY2002 original allotments and therefore did not qualify for redistributed funds in the first place. This report will not be updated.