40 states to lose unspent child health insurance money

In this story: Program created in 1997 Money can be used on outreach efforts RELATED STORIES, SITES

From Sandra Young
CNN Medical Producer

NEW YORK (CNN) -- Forty states stand to lose hundreds of millions of dollars allocated to them to pay for health insurance for children in low-income families, the White House said Sunday.

Only 55 percent of the $4.2 billion in the program has been spent, and only 10 states have used their full allotment of the funds, said a White House spokesman. The story was first reported in Sunday editions of The New York Times.

The 40 states have until September 30 to spend the money. After that, whatever is left over is expected to be handed over to the 10 states that have spent all their money, though the spokesman said several of the states are seeking to figure out a way to keep the excess.

Program created in 1997

The Children's Health Insurance Program was created in 1997 to provide coverage for the estimated 10-11 million children whose families are too well off to qualify for Medicaid, but too poor to buy health insurance on the private market.

But the program has been slow to get off the ground in most states. Only New York, Alaska, Indiana, Kentucky, Maine, Massachusetts, Missouri, North Carolina, South Carolina and Pennsylvania have spent all they were given, the spokesman said.

Money can be used on outreach efforts

About half the unspent money -- more than $1 billion -- represented funds that had been directed to California and Texas, where Gov. George W. Bush has made children's issues a campaign issue in his quest for the presidency.

In an effort to attract more children into the efforts, the federal government last summer released new regulations allowing the money to be used on outreach efforts and on policies for parents.

But that effort was not enough to use up the money, which came from funds allocated for 1998. Under the program, all 50 states will still get money during the coming two years for which the program has been funded.

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