SCHIP funding to maintain current programs

December 10, 2007

Throughout this year, the Congress has been considering possible extensions of the State Children's Health Insurance Program (SCHIP). CBO today released new estimates of the federal SCHIP funding necessary to maintain the current programs operated by states -- which some observers refer to as the SCHIP "shortfall" -- relative to the baseline funding level of $5.0 billion. If 2008 funding is maintained at the $5 billion level, CBO expects that about 21 states will have insufficient federal funds to continue their current SCHIP programs; the first states to exhaust their funding are projected to do so in March 2008. CBO estimates that an additional $1.4 billion in federal funds would be necessary to maintain current SCHIP programs in fiscal year 2008. Providing this additional funding, though, would reduce spending on Medicaid -- since some of the SCHIP money would cover beneficiaries who would otherwise shift onto Medicaid. The net increase in federal spending to maintain current SCHIP programs would therefore be approximately $0.8 billion in 2008 (once expected Medicaid savings are taken into account). CBO has released various analyses of issues associated with the existing SCHIP program and possible reauthorization of it. CBO's SCHIP analyses and cost estimates are posted on our website.