Iowa Faces $16.1 Million Shortfall in Kid’s Insurance Programs

Iowa is one of at least 14 states facing a federal shortfall for its state insurance program for children.

The state faces a shortfall of $16.1 million in federal money by the end of June for health care programs that serve low-income families, said Anita Smith, chief of the bureau of medical supports at the Iowa Department of Human Services.

For the last three years, Congress has provided supplemental funding so Iowa could curtail its shortfall. However, President Bush’s proposed budget cuts could leave states without a safety net.

This lack of federal funding may leave state officials scrambling for ways to keep programs afloat.

Democratic Sen. Jack Hatch, D-Des Moines, chairman of the Iowa Senate Health and Human Services Appropriations Subcommittee, said the state budget didn’t factor in federal cuts.

Lawmakers may be forced then to find state cash for the health care programs that cover 37,000 children in Iowa.

“We’ll have to divert state funds to recapture that or have to cut benefits” for programs like hawk-i or Medicaid, he said.

Hatch said federal lawmakers would likely not make a decision before the end of Iowa’s fiscal year this summer. And if Bush’s plans pass, he said a supplemental budget bill to revise state programs would not happen until the Legislature’s January 2008 session.

In the meantime, several state lawmakers are banking on the proposed tobacco tax to fund state health care services.

“Keeping most of our health care programs will require us to pass a $1-a-pack cigarette increase,” said Rep. Ro Foege, D-Mt. Vernon, chairman of the House Health and Human Services Appropriations Subcommittee.

Without the tax, Foege said the state would try to keep children’s health care running through cuts in services for the indigent in hospitals, cancer screenings and some wellness programs.

Making these cuts to sustain the federal program would prevent the state from starting new programs, especially in cancer research, he said.

But Smith anticipates Congress will come through in providing the needed money, she said after testifying at the Senate in Washington last week.

“There’s a lot of interest _ we’re hopeful action will be taken so that no state will have a shortfall,” she said. “At this point, we’re taking a wait-and-see approach.”

Topics Legislation Iowa