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State to resume PeachCare enrollment
Four-month freeze due to be lifted Thursday

ATLANTA - Georgia's working poor will be able to sign up their children for subsidized health coverage this week for the first time in four months.

But both state health officials and child advocates warn that lifting the freeze on PeachCare for Kids will only offer temporary relief unless Congress acts to reauthorize the decade-old State Children's Health Insurance Program later this year.

The Georgia Board of Community Health is expected to approve ending the PeachCare freeze Thursday. But board members are being asked to cap the program at 295,000 kids, just 21,000 above the current enrollment.

Some 16,000 applications are in the pipeline now, said Pat Willis, executive director of Voices for Georgia's Children.

"When the freeze is lifted, we would expect to get pretty close to the cap almost immediately," she said.

The state Department of Community Health imposed the freeze in March as PeachCare was about to run out of federal funding, which accounts for 73 percent of its budget.

DCH officials began sounding alarms last summer about a looming federal shortfall of $131 million, the result of chronic underfunding of SCHIP in Georgia and 13 other states.

Since the program's inception in 1997, the states that have had the most success enrolling kids for health coverage have been on the short end of a funding formula that allocates money based on the number of uninsured children.

Money gap

The issue became a political football during this year's General Assembly session. State lawmakers complained about the flawed formula and called on Congress to plug the shortfall.

Members of Georgia's congressional delegation were sympathetic but said it was unrealistic to expect quick assistance from Congress. They urged Gov. Sonny Perdue and the legislature to pull the needed money out of state funds and seek reimbursement from the feds later.

The governor and General Assembly did just that in April, transferring $74 million in the midyear budget from Medicaid to cover PeachCare. But they decided to leave the enrollment freeze in place pending congressional action.

Congress finally stepped up in May with $650 million for states affected by the shortfall, folding the money into a supplemental spending bill primarily aimed at funding the war in Iraq.

With Georgia's share of $121 million secured, Perdue and Community Health Commissioner Rhonda Medows moved last month to lift the freeze.

Because any change in the program is subject to a 30-day public comment period, the Board of Community Health had to wait until this week's meeting to vote on it.

Child advocacy groups began calling for an end to the enrollment freeze from the moment the legislature approved the temporary state bailout.

Cap defended

But Mark Trail, director of PeachCare for the DCH, said the cap is still necessary because of continued uncertainty surrounding the reauthorization of SCHIP.

If Congress doesn't act by Sept. 30, the end of the current federal fiscal year, the program will expire.

"We are optimistic that they will reauthorize SCHIP," Trail said. "The hesitancy is we don't know what they will do with the funding formula."

Trail said timing is also a concern. At the pace Congress works, the end of September isn't far off.

"They're already starting to run out of time," Trail said. "They need to get moving."

Complicating a quick resolution to the issue is the wide gulf between the level of funding President Bush and congressional Republicans support for SCHIP and what the Democratic majorities in the House and Senate want to do.

The president is backing a GOP proposal to limit SCHIP eligibility to families with incomes at or below 200 percent of the federal poverty level, about $40,000 for a family of four.

Georgia House Speaker Glenn Richardson, R-Hiram, backed the same income limit in a bill he pushed unsuccessfully in the General Assembly this year. PeachCare currently offers coverage to families with incomes up to 235 percent of the poverty level.

Richardson argued that lowering the limit to 200 percent would ensure that PeachCare could serve the most needy and not be stretched too thin.

Congressional Republicans are using the same reasoning to back a call both to tighten up on income eligibility and stop some states from extending SCHIP coverage to adults.

"The main goal of SCHIP reauthorization ought to be increasing the number of low-income kids who are covered by health insurance," said U.S. Sen. Chuck Grassley, R-Iowa, ranking Republican on the Senate Finance Committee.

Program expansion

But Democrats see the reauthorization of S-CHIP as a means of expanding children's health coverage.

"In the last 10 years, SCHIP has provided health coverage to millions upon millions of low-income American children who might otherwise have gone without basic health care," said Sen. Max Baucus, D-Mont., chairman of the Finance Committee. "Congress has a solemn responsibility to renew the SCHIP program and to find ways for more children to benefit from this proven success."

The difference between the two positions can be seen most clearly in the funding each side is proposing. While Bush is calling for spending about $10 billion during the next five years on SCHIP, congressional Democrats favor about $50 billion.

But Willis said she believes the disagreements between Republicans and Democrats on SCHIP are overblown.

She returned from a recent trip to Washington convinced that Congress won't go along with any attempts to reduce eligibility and instead will earmark at least $35 billion for the program.