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F I S C A L I M P A C T R E P O R T

SPONSOR Cravens

ORIGINAL DATE

LAST UPDATED

02/07/07

02/10/07 HB

SHORT TITLE Children’s Health Insurance Program Funding

SM 16

ANALYST Hanika Ortiz

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

Senate Memorial 16 urges New Mexico’s congressional delegation to ensure the timely

reauthorization and adequate funding of the State Children’s Health Insurance Program (SCHIP).

FISCAL IMPLICATIONS

More than 4 million low-income children, most of whom would otherwise be uninsured, are

enrolled in SCHIP. Unlike Medicaid, an entitlement program whose federal funding increases

automatically to compensate for increases in health-care costs, SCHIP is a block grant with a

fixed annual funding level. As a result, the federal SCHIP funding that states receive is not

keeping pace with the rising cost of health care or population growth.

In FY07, the final year of SCHIP’s original ten-year authorization, many states are expected to

have inadequate SCHIP funds to cover the same number of beneficiaries as in 2006. Shortfalls

will become much more severe and widespread after 2007 if Congress freezes the annual SCHIP

block grant at its 2007 level of $5.04 billion when it reauthorizes SCHIP next year.

Senate Memorial 16 – Page

2

SIGNIFICANT ISSUES

The Memorial states the following;

•

The health of New Mexico's children is of paramount importance to families in the state;

and

•

The poor health of children is a threat to the educational achievement and social and

psychological well-being of the children of New Mexico; and

•

Protecting the health of children is essential to the well-being of the youngest citizens and

the quality of life in the state; and

•

The SCHIP is an integral part of the arrangements for health benefits for the children of

the state of New Mexico; and

•

The value of the SCHIP in preserving child wellness, preventing and treating childhood

disease, improving health outcomes and reducing overall health costs is well-recognized;

and

•

Federal funding available for the SCHIP is indispensable to providing health benefits for

children of modest means.

The Legislature urges through this Memorial for state government to work together with

educators, health care providers, social workers and parents to improve health benefits for

uninsured children. The Legislature further urges the Governor to provide meaningful assistance

to help identify and enroll children who qualify for Medicaid or the SCHIP.

PERFORMANCE IMPLICATIONS

Copies of this Memorial, if passed, will be transmitted to the New Mexico congressional

delegation and to the Governor.

OTHER SUBSTANTIVE ISSUES

Next spring Congress will decide the future of two critically important programs that currently

provide health insurance to 30 million children and hold the keys to covering the remaining 9

children nationally who still lack coverage. Congress is expected to debate reauthorization of the

SCHIP at the same time that it considers major changes to the Medicaid program. Medicaid

provides states matching funds to cover more than 25 million low-income children, while SCHIP

makes block grants that help states offer affordable coverage to an additional 4 million children

from families with slightly higher incomes. Yet, despite their remarkable success in expanding

coverage for children over the past decade, Medicaid and SCHIP now face an uncertain future.

The nation stands at a crossroads on children's health. Most health care experts see

strengthening Medicaid and SCHIP as the best path to covering the remaining 9 million

uninsured children in the United States. The goal of covering all children is within sight and

would be a historic accomplishment. Yet Medicaid has been the focus of budget cuts in

Congress and in state capitals and the SCHIP program is running out of money. Next year, 17

states will exhaust their SCHIP funds. Just to cover the existing number of children who depend

on SCHIP, Congress will have to add $12-18 billion over the next five years. Without any

additional funding, 1.8 million low-income children may lose their health insurance.

AHO/sb