President Bush on Children's Health Care: Reporting Back

Published: November 28, 2005

by: Sunny Xiang and Jan Richter

Back when Connect for Kids asked President George W. Bush and Democratic candidate John Kerry to outline their stands on such key issues as health care, education and early childhood development, we were pleased to receive comprehensive and well-thought-out answers from both men.

We knew that whoever won the election, his answers would later provide a useful measuring stick of progress being made to meet promises and goals laid out by the candidate. Since then, a lot has happened, including a devastating hurricane that put the needs of poor families and children in high relief.

Below is President Bush's response to our questions on the federal role in protecting children's health, and an assessment of what has happened since.

Connect for Kids: How far should the federal government go to protect or sustain funding for children's health insurance programs like Medicaid and the State Children's Health Insurance Program (SCHIP)?

George Bush: I strongly support programs such as Medicaid and State Children's Health Insurance Program (SCHIP) that provide health care coverage for low-income families and children.

The Medicaid and SCHIP programs are the major public programs that help low-wage parents provide medical coverage for their children. SCHIP, begun in 1997, served about 4 million children in 2004. In 2003, Medicaid covered more than 25 million children.

In 2003, we expanded coverage under the SCHIP to about 5.8 million children who otherwise would not have eligible health coverage.

According to the Department of Health and Human Services, the number of SCHIP enrollees increased by 75 percent, from 3.3 million to 5.8 million, between 2000 and 2003, a time of economic recession.

An analysis by the Economic Policy Institute shows that during that recession, children suffered the greatest cutbacks in private, employer-provided health coverage, but increases in public insurance programs such as Medicaid and SCHIP offset and even outpaced the loss of employer-provided coverage.

States, however, are having trouble sustaining the rate of growth that SCHIP experienced in its first four years, a period that coincided with the economic downturn. In a letter to the HHS Centers for Medicare and Medicaid Services, the National Governors Association said that the number of states with insufficient SCHIP funding is projected to jump from seven to 17 between 2005 and 2006. In 2004, 36 states spent more than 100 percent of their annual allotments, according to the Urban Institute.

Leighton Ku, a health analyst for the Center for Budget and Policy Priorities, explains that these funding shortages, along with growing health care costs and a still-slow economy, has forced states to rein in rather than to expand SCHIP and Medicaid.

"Costs are growing, but states' revenues are not," and the result is "heavy pressure" for states to cut spending, he says.

President Bush cites SCHIP's "success at enrolling millions of low-income uninsured children" as the reason for reauthorizing the program a year early in 2006. His FY 2006 budget, however, recommends level funding for SCHIP over the next 10 years, which would fail to account for projected federal funding shortages in states as well as increasing health care costs and enrollment expansion, according to Georgetown's Health Policy Institute.

Bush: And to further ensure that states have the funds they need to continue expanding coverage, I signed the SCHIP redistribution law which preserved over $2 billion in unspent SCHIP funds so that states could continue to fully-fund their programs and cover children who are currently enrolled.

In SCHIP's early years, certain states, many with programs still in the formative stage, did not use all of their federal allotment. By signing the SCHIP redistribution law in August 2003, Bush allowed these unused SCHIP funds to be extended to states that had already exhausted their own SCHIP funds. The $2 billion, which would have otherwise been returned to the U.S. Treasury, have provided a crucial funding reserve for states.

In the coming years, the amount of unspent funds available for redistribution will likely continue to decrease, according to a CBPP analysis. The analysis shows that in 2004, 19 states qualified for nearly $1.75 billion in surplus SCHIP funds but that by 2007, the number of eligible states will jump to 42 while the funds available would decrease to $153 million.

In addition, the number of children enrolled in Medicaid increased from 22.7 million to 25.7 million from FY 2001 to FY 2004. In total, nearly 7 million additional low-income children and adults are being served in Medicaid and SCHIP.

The rise in the number of children enrolled in Medicaid during the years of recession indicates that the program can serve as a strong safety net that expands when the need is greatest.

President Bush's emphasis on outreach and expansion in his first term persisted into his 2004 reelection campaign. His FY 2006 budget proposes a $1 billion campaign called Cover the Kids to recruit more uninsured children. The allocation, however, has generally been overshadowed by his proposal to cut the federal government's Medicaid funding to states by a net total of $45 billion over the next 10 years.

In its current budget process, Congress is poised to cut federal funding for Medicaid by about $10 billion over five years.

In late 2005, the Bush administration was supporting cuts in Medicaid, the most important public health insurance program for low-income children. When this update was published, Congress was in the midst of a hard-fought budget battle over those cuts, with the Bush administration favoring deeper cuts passed by the House rather than more modest reductions passed by the Senate.

This report was prepared by Sunny Xiang, a Connect for Kids intern, and Jan Richter, Advocacy Director.