Health and Human Services Committee Home

June 7, 2007

Dear Chairman Baucus and Senator Grassley:

A timely and full reauthorization of the State Children's Health Insurance Program (SCHIP) is the Governors' highest health care priority this year. We know that you share this goal, appreciate the efforts you have already made to work with us in a bipartisan manner and look forward to continuing to work together as the Senate Finance Committee takes up legislation reauthorizing this critical federal-state partnership.

As you know, Governors appreciate the combination of increased funding and the general philosophy that options and incentives for states are preferable to mandates. This principle is reflected in the bill recently introduced by Senators Rockefeller and Snowe. We are hopeful that the legislation the Senate Finance Committee marks up will take this into account as well.

It is vital that reauthorization allow states to continue their commitment to providing health insurance coverage to the millions of currently enrolled individuals, and that no eligible person be denied health coverage because of a lack of federal resources. In addition, reauthorization should not diminish states' flexibility to cover certain populations under current law or through federally-approved waivers. It is important that the program allow Governors room within which to establish coverage policies that work best in their state.

We are hopeful that the funding formula you develop will acknowledge many of our key concerns. For example, with the expectation that states will rely less on redistributed funds, it is necessary to ensure that the initial allotments are as accurate as possible. This includes allowing funding to be based on factors such as expenditures, population growth, and medical inflation, as well as providing room for states that choose to expand coverage beyond their current level. We also support additional attention to the unique funding issues in the commonwealths and territories, and encourage you to address the inequity faced by states that expanded Medicaid coverage of children prior to the creation of SCHIP.

Governors would appreciate your willingness to provide states with options and incentives to expand or improve their programs. The ability for states with separate SCHIP programs to cover children of state employees and legal immigrant women and children has been long-standing NGA policy and could greatly improve access to coverage in these states. Governors also support providing options and incentives for states to improve outreach and rewards states for reaching enrollment benchmarks.

We remained concerned, however, that there is a desire to place new unfunded mandates on states. While governors are strongly committed to improving the health care for the populations currently covered in the program, they are also committed to increasing access to health insurance for the 45 million Americans without any health coverage at all. Additional mandates may divert resources that would otherwise be used to fund coverage expansions.

We look forward to working with you on the reauthorization of this vital program. Swift congressional action will be important as the window for state legislative and budget action is rapidly closing.

Sincerely,