" (National Conference of State Legislatures Forum for State Health Policy Leadership, 2007). However, regardless of state, the applicants have to meet certain qualifications. First, applicants have to be both uninsured and not eligible for Medicaid for other forms of state sponsored insurance. In addition, not all S-CHIP recipients have to be children; states can get waivers to use S-CHIP funds to cover adults. These other recipients are generally adults who are responsible for S-CHIP eligible children, and/or pregnant women. However, "at the end of 2005, four states had waivers to use SCHIP to cover childless adults, and nine states cover unborn children who will be eligible for SCHIP at birth as well as prenatal and childbirth services for the mother of the child." (National Conference of State Legislatures Forum for State Health Policy Leadership, 2007). The fact that states have chosen to do this reaffirms the concept that the public wants access to low-cost health insurance for low income families. However, the federal government's position on S-CHIP has not been consistent. The federal government developed the S-CHIP program and provided significant funding for the first years of the program, which led to it being successfully implemented in a large number of states. However, the overall healthcare crisis has caused many to call for a government-sponsored universal healthcare plan, and S-CHIP and Medicaid have been caught up in this political dispute. While many are supportive of such an idea, others are vocally opposed to it. Unfortunately, this debate over universal healthcare has threatened to impact the S-CHIP program. Proponents of S-CHIP claim that it has been very successful:

By every measure, the ten-year-old program- passed during the Clinton administration as a bipartisan, incremental effort to expand health coverage to millions of poor kids - has been a success. Thanks to S-CHIP, the number of low-income uninsured kids dropped by one-third over the decade, even as the number of uninsured adults went up. Three out of four eligible kids participate, and studies show they receive preventive care and have improved health outcomes and school performance. (Lieberman, 2007).

Despite its apparent success and the support of state officials, S-CHIP has not garnered the type of support from the federal government that one might anticipate from a successful program aimed at helping needy children. House and Senate bills aimed at increasing S-CHIP coverage have been defeated or critically altered, and proponents of S-CHIP suggest that insurance lobbyists are responsible for that defeat. In addition, Bush threatened to veto bills that would expand S-CHIP because of concerns about government-run medicine. In fact, Bush only wanted to add an additional $5 billion to S-CHIP, would not have been "enough to maintain the 6 million kids who are currently covered." (Lieberman, 2007). In fact, the Bush administration:

short-circuited the legislative process, issuing a 'guidance' that makes it impossible for states to expand coverage to kids in families whose incomes are above 250% of the poverty level unless the state can show that 95% of children in families under 200% are enrolled, a standard that's unachievable for a voluntary program (participation in Medicare Part B is about 93%, and enrollment is automatic). The number of uninsured children has started to climb again, as employers continue to drop coverage for their parents. Loss of employer coverage has declined for families at all income levels targeted by S-CHIP expansions. (Lieberman, 2007).

The new guidelines immediately impacted S-CHIP, and states that had planned to expand their programs were unable to do so.

While the federal government may not have a consistent view about S-CHIP, state officials do not have the same mixed emotions about the programs. State officials overwhelmingly support the S-CHIP, probably because they can tailor the program to fit the needs of individual states:

It's flexibility allows states to tailor their own programs or build on existing Medicaid arrangements to target children typically in families with incomes of up to 200% of the federal poverty level (about $41,300 for a family of four this year). Last year 91% of kids on S-CHIP lived in families with incomes at or below that amount. States have stepped in to fill a gap the federal government has refused to address: Nineteen states target or plan to target kids from families whose income is greater than 250% of the poverty rate, and some cover pregnant women and parents of eligible kids, a strategy that has proved successful in reaching more children. (Lieberman, 2007).

S-CHIP opponents believe that families in the upper-ranges of S-CHIP eligibility can find service in the private insurance...

They suggest that "public programs like S-CHIP... 'crowd out' insurance sold by WellPoint and United Healthcare, depriving them of profits they earn selling coverage to S-CHIP families." (Lieberman, 2007). However, the reality is that, if forced to resort to private insurance, many of these families would simply be unable to afford medical coverage. "The price for family coverage now averages $12,000, or about 20% of income for a family of four with income at 300% of the poverty level." (Lieberman, 2007). While bare-bones policies are available at a reduced cost, they offer greatly reduced benefits as well. For example, a policy sold by Anthem Blue Cross and Blue Shield in Ohio offered deductibles ranging from $4,000 to $40,000, covers only two doctor visits per year, and requires a 30% copay of any doctor bill. (Lieberman, 2007). In addition, many of these reduced-cost policies specifically exclude the very children who need health insurance the most; children with pre-existing chronic health conditions.
In fact, failure to fund S-CHIP has a potential to have a tremendously negative impact on children. Failure to reauthorize S-CHIP and fully fund it can result in states enacting cost-saving measures like waiting lists, enrollment caps, or removing people from the lists. It could also result in delaying outreach to eligible, unenrolled children. Perhaps the worst potential problem is that it could erode the public's confidence in the program, which would make it more difficult to later reenroll people who are disenrolled because of the cuts. (McInerney, 2007).

The most likely result of drops in S-CHIP funding is that "states may need to stop enrollment, erect enrollment barriers or even disenroll children from the program." (McInerney, 2007). The fact is that, without continued support, states will run out of funds to support their programs. As a result, states will have to curtail their programs in some significant ways. That means that either states will have to help fewer children, or the children will receive reduced benefits. In California alone, approximately 66,000 children per month were facing disenrollment if the budget shortfall was not addressed. (McInerney, 2007).

Furthermore, though S-CHIP has been tremendously successful at enrolling kids in need, the fact is that there are eligible children who have not been enrolled. Fearing a lack of future funding, some states have become very hesitant about expanding their outreach efforts. "Without the assurance of a continued SCHIP funding stream, states worry that bringing more children into the program could jeopardize states' ability to cover already enrolled children. States are also wary about offering coverage to children they may have to disenroll if funds run out." (McInerney, 2007).

In fact, understanding the potential impact on an individual state's S-CHIP programs is perhaps best explained by looking at what happened to Louisiana's program when it faced a decline in funds. Louisiana:

has been extraordinarily successful at enrolling children in SCHIP and Medicaid over the past decade. Between 1999 and 2005, the percentage of all uninsured children in the state fell from 23.8% to 8.4%, largely as a result of increased enrollment in SCHIP and Medicaid. The percentage of uninsured low-income children below 200% of the federal poverty fell even more dramatically, from 31.6% in 1997-1999 to 10.9% in 2006, as Louisiana went from the fifth highest percentage of uninsured low-income children to the tenth lowest. The state simplified enrollment procedures through facilitated enrollment, as well as other outreach strategies such as sending applications home with students, provider education, and producing public service announcements to advertise the program. (McInerney, 2007).

Finally, when funding is threatened and states respond by making program changes, they can find those changes very difficult to undo. For example, if a family has previously been declined S-CHIP enrollment, or disenrolled, it may be difficult to get them to re-apply for benefits:

For example, Texas responded to a fiscal crisis in 2003 by approving administrative rules designed to lower enrollment. These rules included reducing continuous eligibility from twelve to six months (making families renew coverage twice in one year), implementing a $5,000 asset limit, and eliminating all deductions from income, such as child care costs. The changes reduced coverage significantly, as enrollment declined by over 200,000 children over the next four years. In 2007, Texas rolled back many of these enrollment barriers by returning to a 12-month continuous eligibility and increasing the asset limit to $10,000. Even with these new policies, the state is finding that it is challenging to gain back the lost…