Effort under way to let states keep unspent funds for uninsured children

NEW YORK (CNN) -- With 40 states having missed Sunday's deadline to spend all of their allotment of federal funds to provide low-income children with health insurance or face returning what remains to the government, senators have asked the White House to extend the deadline.

A letter written by U.S. Sen. Dianne Feinstein, D-California, and signed by 59 of her colleagues, asked President Bill Clinton to extend by two years the deadline for states to use their Children's Health Insurance Program funds.

The 40 states had to spend the money by Sunday, which marks the end of the federal government's fiscal year. But as of one week ago, the White House told CNN, only 10 states had used their full allotment, leaving 45 percent of the program's $4.2 billion unspent.

After the program's September 30 deadline, it had been expected that whatever was left over in the fund would be handed over to the 10 states that have spent all their money.

Created in 1997, the Children's Health Insurance Program was intended to provide coverage for an estimated 10 million to 11 million children of so-called "working poor" families -- those earning too much to qualify for Medicaid but too little to afford private health insurance.

In most states, the program has been slow to get off the ground. The only states to spend the money allotted to them were New York, Alaska, Indiana, Kentucky, Maine, Massachusetts, Missouri, North Carolina, South Carolina and Pennsylvania, a White House spokesman said.

About half the unspent money -- more than $1 billion -- represented funds that had been directed to California and Texas.

In an effort to attract more children into the program, 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.

In states that haven't spent all they were allotted, and thus may have to return the leftover funds, blame varies.

"The money that would (be returned) is the money that was available to this state in 1988 ... before I was governor," said California Gov. Gray Davis, a Democrat.

Other states say they could not spend their allocated funds because they simply couldn't find enough uninsured children.

According to recent U.S. Census information the number of uninsured children dropped in 1999 by 1.5 percent to 10 million.

Health care advocates say a robust economy accounts for most of that positive trend, as more employers offer health care coverage.

CNN's Jim Hill contributed to this report.

40 states to lose unspent child health insurance money
September 25, 2000
Candidate Clinton wants to expand health-care eligibility for children
July 19, 2000
Low-income families lose health insurance moving from welfare to work, report says
June 19, 2000
Clinton proposes extensive plan to extend health care coverage
January 19, 2000
Health care for the wired and uninsured
October 12, 1999
Who are the uninsured?
October 4, 1999
U.S. graded on well-being of its children
July 9, 1999

Covering Kids Home
State Children's Health Insurance Program
Medicaid Information

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.