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States may lose funds for kids' health care

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Unless Congress acts and President Bush relents in the next week, states will have to return more than $1 billion in money intended to pay for health insurance for children from low-income families.

In past years, Congress and the president have agreed to allow states to carry over unspent federal dollars to the next year -- money many states say they need to care for children but which they have been unable to access because of federal matching requirements and their own tight budgets.

But the Bush administration opposes efforts to allow states to retain the money for spending on health care after Sept. 30.

Instead, the White House wants to use the money to fulfill Bush's campaign promise to spend a similar amount on a public outreach campaign -- including the use of faith-based organizations -- to promote the health care program and enroll children.

White House spokesman Trent Duffy said it is time for a different approach.

''Obviously if there's money left over and children don't have health care, something's not working,'' Duffy said. ''After five years of trying one way, it's time to try new ways.''

All 50 states operate the program, known as SCHIP for State Children's Health Insurance Program. Only seven have used all their 2004 allotment: Alabama, Arkansas, Minnesota, Mississippi, North Dakota, New Jersey and Rhode Island.

The program provides health care to 3.9 million children who lack private or public health insurance.

Lawmakers from both parties in the House and Senate have proposed legislation that would allow states to retain the $1 billion for health care. But no action has been scheduled on the bills.

Three senators -- Republican Lincoln Chafee of Rhode Island and Democrats Edward Kennedy of Massachusetts and Jay Rockefeller of West Virginia -- wrote Senate Majority Leader Bill Frist late Thursday urging action.

''If Congress does not act by Sept. 30 to preserve these funds, states will be forced to cut coverage for as many as 200,000 low-income children,'' the letter stated.

The health insurance program was created in 1997 with legislation that gave states block grant allocations totaling $40 billion to operate the program for 10 years. Backers say it was understood money would have to be carried over because enrollment would be lower at the start than in later years.

Advocates of the program say most states haven't used all the federal money available to them because their own poor economies meant they didn't have the money they needed to cover all eligible children and qualify for the matching federal dollars. Ron Pollack, executive director of Families USA, a health consumer group, accused Bush of ''an act of cynicism'' by promising more money for outreach while allowing states to lose money for the program itself.

''The president is playing a harmful shell game with funds for children's health coverage,'' he said.

But Health and Human Services spokesman Bill Pierce said despite the reversion of money, more children than ever are covered and the program is working. He said even without congressional action, HHS will have authority to redirect $660 million to states that can use it.

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© Copyright 2004 USA TODAY, a division of Gannett Co. Inc.


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