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F I S C A L I M P A C T R E P O R T
SPONSOR Park
ORIGINAL DATE
LAST UPDATED
01/24/07
HB HM 1
SHORT TITLE Children’s Health Insurance Program Funding
SB
ANALYST Hanika Ortiz
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
$.1 see narrative
Recurring
General Fund
$.1
Recurring
Federal Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
SUMMARY
Synopsis of Bill
House Memorial 1 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.
pg_0002
House Memorial 1 – 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/csd