Friday, January 19, 2007

SCHIP Reauthorization--Will Medicare HMOs Pay for Some of It????

In the post below, I reviewed the need to reauthorize the very successful State Children's Health Insurance Program (S-CHIP).

The Congress will have a real challenge coming up with the needed money--$13 billion to $15 billion. Finding the money will be hard because of the House Democrat's pledge to fully fund any spending--their "pay-as-you-go" policy.

Where will the money come from?

First, the Congress will be looking for President Bush to make the first move in his upcoming budget message.

It is possible a final deal will rework the existing state formula. The current formula leaves a lot of money in state accounts that is unused. That money could be freed up and reallocated to the states that need it. But, that won't come close to paying the whole bill.

Then there is the $3 billion still sitting in the Medicare Advantage stabilization fund. You will recall that the last Congress took $7 billion out in December to fund the Medicare physician fees and avoiding the automatic cut they were facing.

That last $3 billion is there for the plucking and I will bet you it's going to get plucked!!!
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