Issues Related to Unspent S-CHIP Money

According to new data released by the Bush Administration in early October, states began fiscal year 2002 (which started October 1, 2001) with $11.3 billion in unspent S-CHIP funds at their disposal. These new data have spurred discussion among researchers, policymakers, and others about whether states should be given more flexibility to use their unspent S-CHIP funds for new purposes other than covering children, such as providing health insurance coverage to workers who lose their jobs during the economic downturn. Indeed, the Bush Administration recently announced a new policy under which states can apply for waivers to use their unspent S-CHIP funds for new purposes. The objective of this issue brief is to provide more information on the amount of unspent S-CHIP money that is available, to explore the reasons for the accumulation of unspent funds, and to discuss the implications for children's health coverage of expanding the allowable uses of S-CHIP funds to encompass new objectives.